All About Employer HSA Contributions

Yes, employers can make contributions to their employees Health Savings Accounts. In fact, this is a benefit we at HSAeducator.com highly encourage. Why? Because it benefits the health of your plan, the budget of your company, and the health and wallet of your employees.

First, consider this: any funds you contribute to your employee’s HSAs are made pre-tax, which can add up to a sizeable tax benefit for your company.

Secondly, it’s the best way to offer your employees a comparable benefit to what they’re currently using and still implement control that helps you keep your budget in check as years go by. It’s a concept many call “defined contribution.” Let’s look at an example.

Let’s say you currently pay $400 in premiums per employee per month as a part of your benefits package. By switching to the right High Deductible Health Plan, that amount drops to $300 per employee per month (or even lower!).

In order to encourage employees to adopt the new benefit concept of an HSA, you can offer the difference ($100) as a monthly HSA contribution. This amount helps employees fund their account faster and accrue a pile of tax-free funds to use for routine medical expenses. And even better, it helps soften the adjustment to your new plan design. Offering employees a regular contribution such as this gives them an incentive to learn how to best use their new plan. In fact, studies have shown that employer contributions often help boost adoption rates to over 90%!

HSAs: Keeping Your Budget Static

And as insurance premiums change from year to year, you can use the HSA contribution portion of your benefit as a means to keep your budget static. Many employers choose to have their total healthcare budget increase in pace with inflation at around 4%. In the event that premiums increase at a rate higher than this, you can easily adjust the monthly per-employee HSA contribution amount in order to keep the total budget at 4%.

Additionally, HSA contributions can be used as incentives in certain health and wellness or education incentive programs. Check out Fontis Health, an online HSA education, wellness, and incentive platform that offers a unique HSA incentive program that rewards employees for completing healthcare education with additional HSA dollars!

Take a look at our Employer Savings Calculator to see how HSA Contributions will benefit your employees and your company.