Health Savings Accounts (HSAs) have multiple benefits that are not often discussed. You probably already know that funds in your HSA account go with you if you leave your employer. The money in the account belongs to you! And you probably already know that the funds roll over from year to year. This is not like an FSA which is a use it or lose it type of account. The money in an HSA is yours to keep.
You might not be aware of the triple tax saving opportunities available with an HSA. That’s right TRIPLE!
- You do not pay payroll or income taxes when HSA contributions are deducted from your paycheck.
- Account funds can be invested and grow tax-free. Once your account has reached a minimum threshold, funds over the threshold can be invested in mutual funds, exchange-traded funds, stocks, or bonds.
- No taxes are owed on withdrawn funds if used for qualified medical expenses. Once you reach age 65 the funds can be used for non-medical expenses without paying a penalty (they will be taxed like any normal distribution from a retirement account).
Do you have questions about HSAs and how they would be beneficial for your employees? Reach out to Silberman Group, we would love to talk to you about it.
Jennifer Webster SHRM-CP