Business Banking/Health Savings
High-Deductible Insurance Health Savings Account
Here’s a cost-effective solution to skyrocketing health insurance costs for you and your employees. Our Health Savings Account (HSA) supports a high-deductible health savings plan* that typically costs you less than HMOs or PPOs.
- Work with experienced Peoples Bankers who understand HSAs
- Convenient Peoples Bank debit card
- Electronic e-Statements including images
- In most circumstances, employees pay less in taxes as contributions are made with pre-tax dollars (similar to an IRA or 401k)
- As an employer, you pay less in premiums and save tax dollars
- This account supports a high-deductible health insurance plan and must be used in conjunction with a high-deductible health insurance plan.
- The deductible and the contribution amount change annually and are tied to the inflation rate.
- Like an IRA, Health Savings Account contributions can be made until April 15 of the following year.
- HSAs can have only one owner but multiple beneficiaries.
- Monthly service charge: $3
- Other fees on disclosure: $25 set-up fee, $25 account closure, $20 excess contribution refund fee.
- Interest earned is tied to the FHLB rate adjusted on the first day of each month.
- If you have a co-pay, the insurance does not qualify as a high-deductible health plan.
Common Questions for Businesses:
WHAT IS THE TAX TREATMENT FOR EMPLOYEE CONTRIBUTIONS?
Contributions to their HSA can be made on an after-tax basis and taken as an above-the-line deduction on their tax return, or employees can make pre-tax contributions through a Section 125 plan (commonly known as cafeteria plan).
WHAT IF I MAKE CONTRIBUTIONS AS AN EMPLOYER?
Employer contributions are excluded from any employee’s income. Employers must make comparable contributions to all employees’ HSAs unless made through a Section 125 plan.
DOES MY BUSINESS STRUCTURE AFFECT CONTRIBUTIONS?
Yes. In general, self-employed, partners and S-Corporation shareholders are not considered employees and cannot receive pretax employer contributions. Self-employed can only take an above-the-line deduction for their premium and HSA contributions. S-Corporation and LLCs cannot make pre-tax contributions to owners, shareholders or partners.
HOW CAN I MAKE HDHP MORE ACCEPTED BY MY EMPLOYERS?
Make it easy to understand. Emphasizing employer contributions and/or employee savings instead of higher deductibles helps. Show
HSAs are affordable by providing examples of how much can be saved for future use.* Your insurance provider should have these examples or check reliable sources on the internet.
* In general, HDHPs have a lower annual premium that can be shared savings for employers and employees. Employees who make contributions will experience a reduction in their Federal income tax and can save HSA funds for future use depending on their average out-of-pocket expense for medical expenses not covered by their HDHP deductible.
*For further information please refer to IRS Publication 502 for information on Eligible HSA Expenses and IRS Publication 969 for General HSA Information, or consult your tax advisor.