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Healthcare Savings Accounts (HSA)

Employees participating in a qualified HDHP can open an HSA account. Contributions to an HSA are not subject to federal or state income tax, they rollover year-to-year, and can have interest bearing accounts. HSA funds can be withdrawn tax-free to pay for eligible medical expenses and can be funded by the employee, by the employer, or both the employee and employer.

Benefits for Employers

  • Employers reduce FICA taxes
  • Employer contributions to employee HSAs are tax-deductible

Benefits for Employees

Employees not only have access to funds to pay for current and future healthcare expenses, but also qualify for 3 tax advantages:

  • Contributions are pre-tax
  • Withdrawals for qualified medical expenses are tax-free
  • Interest earned on investment fund options are tax-free