One of the primary goal of business owners’ use of healthcare plans is to increase revenue, without taking on more work to do so. This includes administrating HRAs, COBRA and other benefits provided by employers. If you’re one of these employers, you undoubtedly know that group health care insurance premium rates increased dramatically in the past few years.
One way to reduce the cost of providing healthcare benefits is to utilise HSA software. Because health savings accounts (HSA) can be used in combination with high-deductible health plans (HDHP), employees are equipped to become more knowledgeable healthcare consumers within your company. Especially if your company does not offer medical plans or premium healthcare insurance packages. Regardless, offering employees HSA accounts can be a logistics and HR nightmare.
With your permission, I’d like to share a few ways using this software makes running your business easier, lowering tax costs, and simultaneously providing employees with the support they need to continue being efficient workers.
Since you’re using software, everything HSA-related is available in real time – usually on the cloud. (Depending on the particular software you’re using.) This automation process makes keeping and updating records, expenses, and reimbursements in an easily-organised system. This is crucial, as interest could accumulate within each employees’ account, which may make them eligible for receiving dividends.
2. Three-Tier Tax Savings
One of the primary reasons business owners love HSA accounts is for the triple tax advantage. The first advantage is this: any money you put into the account is completely tax-deductible. As stated in line 25 of the 2006 IRS form 1040. The second advantage is any money growth that happens within the account is also tax-deferred, similar to an IRA. The third advantage is that all withdrawals are tax-free if those withdrawal amounts are used to cover eligible medical expenses.
As an employer, contributing money to your employees’ HSA accounts – as well as keeping track of those accounts, contributing to those accounts as well as keeping track of their growth, can be a daunting task. HSA administration software is great for reducing these headaches, as it helps you organise purchases, receipts and any reimbursements that occur in real time. This alone makes it easier during tax time and any business audits that may/will happen; least of all because these contributions are tax-deductible on business tax returns.
3. Employees’ Peace Of Mind
Employees who are enrolled in an HDHP are eligible to have their money, deposited by you, in their individual HSA. This makes it convenient for your employees to know how many funds they have in their account, and which amounts are covered. This process alleviates a lot of stress and worries in the times of health crises. Your employees will also have a peace of mind in their health knowing that their HSA cannot be touched by you or the business, as every single penny in their account belongs to them.
These benefits are few, and there are undoubtedly many more to cover. What you’ve learned about are the basic benefits of using HSA software to take the load off your already-swamped workday. In the end, every employee needs a health savings account and similar insurance should unexpected tragedy strike. Since the software is automated, allocating necessary funds in time of emergency could never be easier.