Small-group health plans suffered a big blow in 2010 when the Affordable Care Act added provisions to limit deductibles. Individual deductibles were limited to $2,000 while family deductibles were limited to $4,000 – causing premium rates to increase in exchange for lower deductibles. As an add-on to the “Protecting Access to Medicare Act,” deductible limits have been repealed. How does this affect you?
If you’re a small business owner, you have the potential to save tens of thousands of dollars per year in health plan premiums. By increasing deductibles, premiums go down, and you can offset these deductibles for your employees by contributing to a health savings account, or HSA. Even with an HSA contribution, you’ll still save in the long run.
As an added benefit, employees with HSA-qualified plans linked to health savings accounts tend to take a more active role in their health care and make extra efforts to stay healthy when the money is coming directly out of their health savings account. HSAs encourage participants to be better consumers as they are more cautious about how much they spend for health care – encouraging price transparency and consumer-driven health care.
As an employee, you also benefit by lower health plan premiums and by having a built-in savings account. Your HSA can be used to pay your deductible, or you can use the funds to cover non-covered medical expenses such as acupuncture, holistic treatment, chiropractic care, braces, etc. To make the deal even sweeter, any contributions you make to your HSA can be deducted on page one of your federal tax return—directly lowering your tax bill!
Although HSAs are used to pay for health care costs, any unused money remaining in your account rolls over from year to year and can eventually be used as a retirement fund. The healthier you remain – the more money you’ll have come retirement!