Financial pressures of rising premiums are requiring many employer groups to raise deductibles and copays in order to reduce their monthly premium costs. Health saving accounts (HSAs) are becoming more popular than ever because they allow employees to save for these increased out of pocket expenses on a pre-tax basis. Together, employers and employees can contribute up to $3,350 for individuals and $6,570 for families in 2016.
Unlike Health Reimbursement Accounts (HRAs) and Flexible Spending Accounts (FSAs), HSAs are never lost or forfeited if an employee changes jobs. Also, their money is not lost at year-end if it is not used, funds simply roll over to the next year.
Implementing an HSA lowers payroll taxes. All HSA contributions are excluded from payroll taxes which generate savings for both employers and employees.