subject: Health Savings Accounts Reduce Business Costs [print this page] Health Savings Accounts Reduce Business Costs
If you're a business owner, you may want to consider a health savings account because it can save you money. Whether you provide health insurance benefits to your employees or you are the only employee, when you combine the health insurance benefit with the benefit of a health savings account, you and the business come out winners. The first benefit is that you can typically get lower rates on a group plan than you can on an individual plan. Couple this with the fact that group plans tend to have better coverage, and you're already a couple steps ahead. Add in the health savings account to the mix, and now you have an opportunity for each employee to reduce their annual income tax obligation too. Easy To Insure ME
Health Savings Account Benefits the Business
Businesses, too, benefit from the use of these types of special savings accounts that coordinate with the group health plan. The primary benefit is it gives employers or business owners the opportunity to put health care control in the hands of the employees. In essence, this lifts the burden from the shoulders of the business owners or managers. This equates to less paperwork for the business to manage, adds privacy for the employees, and decreases overhead expenses to the business.
Health Savings Account and the Employee
In order to reap the benefits of a health savings account, employees do have to take the step to start up the health savings account. The high deductible health insurance provider typically recommends an institution, such as a bank, but the employee can choose their own institution that offers health savings accounts. The money employees deposit into this account is tax deductible so it reduces the tax obligations of the employee at the end of the year.
Health Savings Accounts Maximize Tax Benefits
The bottom line is that to maximize the tax benefits of health savings accounts, employees have to contribute as much to the account as possible. The maximize amount of contributions allowed depends on the age of the employee and whether the coverage is for a family or an individual. Investing in a health savings account allows employees and self-employed individuals to kill three birds with one stone; it provides health care coverage at an affordable rate, allows them to put away money tax free to cover medical and health expenses not covered by the policy, and reduces tax liabilities. In the end, this is a cost saving account for the individual employees and for the businesses that have handed over control to the employees themselves.
