As a reminder, Health Savings Accounts (HSAs) are a medical savings account that are available to taxpayers that are enrolled in a high-deductible health plan (HDHP).
These funds may be used towards medical expenses of any kind and are special in the way that they are taxed.
While there are certainly a number of benefits to offering these to employees – from tax breaks to flexibility in the funds – there are also disadvantages.
So, if you are considering adding this to your benefits plan in order to attract top talent and keep your employees happy, there are some things you should know before weighing if it is “worth it”.
The Disadvantages of HSAs
Before this insurance coverage will fully kick in, high deductibles will need to be met in most cases.
Especially if your workplace is filled with many younger employees who may not have the savings to pay off the deductible in the event of an emergency, this kind of health care plan may not be a particularly attractive one to your employees.
It could make employees less likely to go to the doctor
Because people may be eager and anxious about saving the money they have contributed to their HSAs, it could discourage them from going to the doctor at times when they actually should make the visit.
This could be “harmful” to the health of your employees and to the overall morale and wellness of your office.
It requires recordkeeping
This healthcare plan requires quite a bit of recordkeeping, as whenever money is spent out of an HSA, receipts must be kept and filed in order to prove the charges were for qualified health care purchases.
This could get tricky and that level of organization may discourage employees from picking this option.
There are savings limits and restrictions
You cannot put an unlimited amount of money into your HSA each year. There are limits of a few thousand dollars, revolving around how many dependents your account supports.
This is something to note and undoubtedly is a factor when it comes to your employees choosing or not choosing this plan.
It can be confusing
Because this is a newer concept and varies from the traditional health care plans, it can be confusing to explain the ins and outs of HSAs to employees.
If you do not have staff on hand that can clearly do so and adequately answer all questions, it could make for a frustrating and confusing experience for employees, which is suboptimal.
How a PEO Can Help
A PEO can be of assistance when it comes to analyzing and deciding what the best healthcare options are to offer in your office. Our organization aims to match your company with a PEO that is best suited to fit the needs of your business, so rely on us to help find the right fit.