HEALTH SAVINGS ACCOUNTS, YOUR BUSINESS and YOUR EMPLOYEES

It doesn’t happen everyday, but every so often a bit of good news makes its way out of the world of employer sponsored health plans. Traditional group health insurance premiums continue to rise, but the premiums for one kind of employer sponsored insurance plan have been falling. I am of course referring to the much talked about albeit somewhat misunderstood Health Savings Account. HSA’s can offer your employees a real choice, facilitating a wide range of applications to suit a variety of needs and budgets. The Health Savings Account, as we know it today, was born back on December 8, 2003 as a kind of 2nd generation Medical Savings Account plan (also known as the Archer MSA). Of course, even though certain aspects of the new program are the same as the old, there are a few important differences that have made HSA’s more popular than MSA’s ever hoped to be. For instance, HSA accounts allow employees to save money tax-free, and employers to contribute to those savings accounts tax-free, when they are paired up with a qualified high deductible health insurance plan. Nevertheless, none of that means that every business that can take advantage of HSA’s should. Health savings accounts can be quite demanding. By design, they encourage participants to try out a new way of tackling an old problem—funding health care. There are no co-insurance rates or co-pays and the system of “high deductibles” is definitely a change of pace from most traditional health plans. Employees happy with their HSA Accounts have a few things in common. Employees Who Prefer Health Savings Accounts Tend To:· Have the discipline to make independent contributions to their HSA Accounts?· Not mind the risks of having a high deductible health plan? · Prefer lower health insurance premiums?· Like to reduce their federal income taxes?· Be able to live without co-pays for smaller medical bills? · Be interested in saving additional tax-advantaged money for their retirement?· Prefer a bit of additional responsibility to the over-inflated price tag attached to traditional health insurance plans?But Are HSA Accounts the Right Health Care Solution for My Small Business?Health Savings Accounts are pretty well situated to the needs of smaller firms (IT start ups, Bio-tech start ups, tech start ups, Marketing and Design Firms, etc.) who lack the means to offer a traditional health plan to their employees. The cost of providing the benefits a prospective workforce looks for has been rising for years. Small businesses all over are being squeezed by those costs. To find new ways to reduce their health care burden, small business owners have to keep looking over their options, and HSA Accounts may just be the best of the viable alternatives. The HSA may be the most flexible, customer-friendly health plans yet and they may be about to revolutionize the way small business owners provide their employees with healthcare. HSAs are tax-free savings accounts that work like IRAs, except that the money is targeted to pay for qualifying medical expenses. In fact, most of the rules and procedures that apply to an IRA also apply to an HSA Account. Just take a look at these numbers …Your staff’s health care premiums have outpaced both a 2.2 percent wage growth rate and a 2.3 percent inflation growth rate by five times. Employees paid 28% of their family premium, up from 27%. And the costs of those premiums rose 10.3% at the same time. Even your single employee’s out-of-pocket premium costs have risen 9.8%. But, can HSA’s fix any of that? Take a look at the benefits an HSA Plan will offer your workforce:· HSA’s were designed to help your employees become better healthcare consumers. · Their out-of-pocket costs for qualified medical expenses will be tax-free. · Your employees’ will own their HSA Accounts and can take the accounts with them from employer to employer. · Unused cash in their HSA’s can be rolled over at the end of each year to create a retirement-sized nest egg. · Their HSA’s dividends and built up interest will be tax-free. · Your contributions to the HSA will be exempt from payroll taxes. · Their contributions to their savings accounts won’t be included as gross income – they’ll be tax-free. Ok … HSA’s Are Right for My Business and My Workforce, How Do I Shop for One?Since the accounts were specifically designed to correct a flaw in our tax laws (that has helped distort the entire health care system) offering one to your employees will be easier than you might think. You see, before the HSA, our tax code actually subsidized third-party insurance plans while penalizing individual ones. This new law, part of the Medicare prescription drug act enacted in 2003, gives deposits to an HSA the same tax benefits third-party health insurance premiums once enjoyed. That means they aren’t simple. If you or your employees are struggling to figure out how to deal with high deductible health insurance plans and HSA Accounts . . . here are a few tips you may want to keep in mind: · Start by providing an affordably priced qualifying health deductible plan. Be especially sure to find one that provides 100% coverage above its higher than average deductible. · The premium you on your high deductible health plan should save you and your employees around 30 to 35 percent over a traditional plan. Don’t settle for a savings number lower than that. · Shop around for a plan that provides what’s known as a hospitalization rider. They’re a particularly valuable benefit to employees who’re just starting to fund their HSA’s. The rider will help protect them financially if they land in a hospital before they’ve had time to build up the balance in their Health Savings Account.· Be careful to shop for a reputable brokerage, mutual fund company or bank willing to set up and manage your Health Savings Account Program free of charge. Over time, the high fees certain firms charge will eat away at the interest your employees earn on their accounts. Remember whether your company is large, small, well established or just starting up … an effective, successful and attractive employee health plan is essential. The right health plan can do more than provide for valued employees, it can make it just that much easier for you to engage and recruit the highly skilled (and therefore highly sought after) workforce you’ll need to compete or remain competitive in an increasingly, competitive, global marketplace. That’s why we’re here.Now and then the outside expertise of human resource professionals can be just what the doctor ordered. Whether you’re managing a large workforce or a loosely knit band of talented specialists, taking advantage of our personnel management expertise will allow you to properly assess your current workforce management processes for compliance, navigate a variety of delicate labor issues and t successfully traverse the virtual minefield hiring, compensation and benefits has become. That’s right, we’ll empower you by helping you to effectively manage your workforce, reduce costs, increase productivity, improve workforce satisfaction, expand your recruiting options and your retention rates.
Article Source: http://www.articleszoom.com