Having options never hurt anybody. If you offer a high-deductible health plan, the employees who participate in that plan may be eligible to contribute to a Health Savings Account—a flexible, tax-free way to save for their medical expenses.
A flexible, tax-free way for your employees to save for their medical expenses, a Business Health Savings Account brings with it a host of benefits for the sponsoring business and contributing employees. Benefits include:
Unlike Archer Medical Savings Accounts, HSAs are available to everyone, not just the employees of small businesses and the self-employed.
HSAs allow you and your employees to make contributions and earn interest tax free. Plus, the distributions (the assets withdrawn) are also tax free as long as they're used for qualified medical expenses.
The assets in an HSA can be used to pay for—or reimburse—qualified medical expenses, such as health insurance deductibles, co-payments, certain over-the-counter medications and out-of-pocket expenses.
You've heard the phrase, "use it or lose it." Well, an HSA isn't like that at all. HSA balances carry forward year after year, allowing you and your employees to budget for health expenses and build up savings to cover qualified medical expenses when the need arises.
An HSA is owned by each individual. So, it's his or her responsibility to maintain.
As an added benefit to your employees, you can choose to make contributions to their HSAs. The annual contribution limit is based on the type of HDHP coverage. For 2014, the limit increases to $3,300 for self-only coverage and $6,550 for family coverage. These limits are subject to annual cost-of-living adjustments (COLAs). Individuals who are age 55 or older by the end of the taxable year and not enrolled in Medicare may make additional contributions up to $1,000 per year.
When it comes to choosing the best options for your business, our business banking experts can help you select the business checking account and additional services best suited for your needs - allowing you to focus on running your business and controlling your finances.
You must maintain a minimum daily balance of $2,500.00 to waive the $2.50 monthly maintenance fee on the Business Health Savings account.
This page is intended to provide general information on federal tax laws governing HSAs. It is not intended to provide legal advice or to be a detailed explanation of the rules or how such rules may apply to your individual circumstances or under your state tax laws.
For specific information, you are encouraged to consult your tax or legal professional. IRS Publication 969, Health Savings Accounts and Other Tax- Favored Health Plans, the instructions to IRS Form 8889 and the IRS's web site, www.irs.gov, may also provide helpful information.
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