Have you talked about HSAs?
As we celebrate HSA day, do you know what they are and how they work?
HSA stands for Health Savings Account. These are powerful savings tools that are often unappreciated. If your benefits provide the opportunity for you and your staff to utilize an HSA, I’d suggest you look into them with your employees to make sure you’re getting the full benefit of the program.
To be eligible for an HSA you must have a high-deductible health benefit plan. These are often available and popular at companies, requiring lower monthly premiums, and the deductible eligibility amount is set by the IRS each year. Once you confirm you have an eligible plan, there are multiple companies offering this savings as an option. HSA Bank, Optum Bank, Fidelity, Bank of America are a few examples (and there are others).
If planned and used correctly, HSAs deductions, fund growth, and distributions are all tax free, based on eligible medical expenses. You can reimburse yourself anytime tax free for qualified expenses, so saving receipts and explanation of benefits (EOBs) can allow you to hold onto the money for years, even into retirement.
Basically, you would pay for eligible expenses as out of pocket today, save the receipts and EOBs, invest the HSA funds, and then reimburse yourself in the future tax free.
These savings can add up over time and when used in conjunction with other retirement savings, can help build retirement income.
Examples of eligible expenses are prescriptions, doctor/specialist visits, dental care, mental health care, vision care, first aid supplies, and many other items. A list of eligible items and other important information can be found at Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans | Internal Revenue Service.
Do yourself and your staff a favor and learn more about health savings accounts!
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