HSA Administration

As a broker, you can provide your clients with a powerful healthcare solution by combining High Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs). This strategic pairing offers a dual advantage: significant payroll tax savings for employers and greater financial control for employees over their healthcare expenses.

HDHP and HSA integration is a flexible option suitable for businesses of all sizes and structures—including C-Corps, S-Corps, LLCs, and more—making it a versatile recommendation for your diverse client base. Employers benefit from lower healthcare costs, enhanced employee satisfaction, and a competitive edge in attracting and retaining top talent. Meanwhile, employees enjoy tax-free contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses, creating long-term financial stability and peace of mind.

By guiding your clients to implement HDHPs with HSAs, you can help them not only reduce costs but also promote smarter, more engaged healthcare spending within their workforce. This integrated solution is a practical and forward-thinking choice that positions you as a trusted advisor in a competitive benefits landscape.

Frequently asked questions

  • 01 / Why offer an HSA?

    Why Employers Should Offer a Health Savings Account (HSA)  


    **1️⃣ Cost Savings** – HSAs are paired with high-deductible health plans (HDHPs), which have lower premiums than traditional plans, reducing employer healthcare costs.  


    **2️⃣ Triple Tax Advantage** – Contributions are tax-free, funds grow tax-free, and withdrawals for qualified medical expenses are tax-free. After 65, non-medical withdrawals are taxed as regular income with no penalty.  


    **3️⃣ Employee Satisfaction** – HSAs empower employees with control over their healthcare spending while offering valuable tax benefits, making them a strong tool for attracting and retaining talent.  


    **4️⃣ Flexibility** – Employees can use HSA funds for a wide range of healthcare expenses, from deductibles and co-pays to prescriptions and more.  


    **5️⃣ Portability** – Unlike traditional employer-sponsored benefits, HSAs belong to the employee and move with them if they change jobs or retire.  


    **6️⃣ Long-Term Savings** – HSAs allow employees to build a medical savings nest egg for retirement while continuing contributions as long as they maintain an HDHP.  


    By offering an HSA, employers can provide a cost-effective, tax-efficient, and employee-friendly benefit that supports both short-term healthcare needs and long-term financial wellness.

  • 02 / How does an HSA work?

    Pre-tax funds are deducted from payroll and deposited into the employee's designated HSA custodial account. When a qualified expense arises, the employee can access their HSA funds for reimbursement.  


    Reimbursements can be processed in various ways, depending on the account setup—typically through options like debit cards and other convenient payment methods.

  • 03 / Eligible HSA expenses

    HSA funds can be used for qualified medical expenses as defined by Section 213(d) of the Internal Revenue Code, as long as they are not covered by insurance or other means.  


    While most health insurance premiums are not eligible, exceptions include:  

    ✔️ **Qualified long-term care insurance**  

    ✔️ **COBRA continuation coverage**  

    ✔️ **Health coverage during periods of unemployment**  


    Expenses must be incurred after the HSA is established to qualify. 

  • 04 / Who can contribute to a Health Savings Account?

    Anyone enrolled in a High-Deductible Health Plan (HDHP) can contribute to an HSA, whether they’re self-employed, work for a small business, or have coverage through a larger employer. Contributions can come from the individual, their employer, or both, up to the IRS annual limit.