As health insurance costs continue to soar, employers are seeking less expensive coverage alternatives, and many are turning to a consumer-driven approach that includes a high deductible health plan (HDHP). When a qualifying HDHP is paired with a CONEXIS health savings account (HSA) program, the employer and its employees both save money — now and in the future.
An HSA program can help ease the transition from traditional health insurance coverage to a qualifying HDHP, while dramatically reducing premium costs. Employers can contribute tax-deductible HSA funds, and employees can also contribute on a pre-tax basis.* Since pre-tax funds are used to pay for eligible medical expenses, each employee lowers their gross income, which reduces your payroll taxes.
Unlike a health flexible spending account (FSA) and health reimbursement arrangement (HRA), an HSA is an individually owned and portable account. Each employee has HSA ownership, and it’s their responsibility — not the employer’s — to meet IRS substantiation requirements. The employee is responsible for wrongful distributions if HSA funds are used incorrectly and the employee is audited by the IRS.
When leaving your organization, each employee takes the HSA with them, and there isn’t COBRA liability associated with an HSA since it’s not a group health plan. No other program is easier on your HR staff than an HSA.
For employees who meet the eligibility requirements (including enrollment in a qualifying HDHP), health savings accounts are popular employee benefits with many advantages, such as:
HSAs allow individuals to use pre-tax dollars to meet the out-of-pocket obligations of their HDHPs. While eligible dental and vision expenses can be paid through an HSA, many individuals prefer to limit the use of their HSA funds to cover the health plan deductible and other out-of-pocket medical costs.
Employees can’t make contributions to an HSA while they are covered by a general-purpose health FSA. While employees can’t participate in a general-purpose health FSA, they can have a limited-purpose FSA. By offering a CONEXIS limited-purpose FSA to your employees, you give them the power to use pre-tax dollars for eligible dental and vision expenses while saving HSA funds — dollars that can gain in value over time and are not subject to the use-it-or-lose-it rule that applies to FSAs.
CONEXIS partners with UMB Bank, n.a., nationally recognized as a leader in delivering financial products and services to the health care marketplace. Ranked as one of America’s Best Banks by Forbes and SNL Financial, UMB offers strong performance and healthy financial services, and like CONEXIS, UMB has gained national prominence with their commitment to quality and outstanding service – making them the perfect partner for our HSAs.
Individuals that elect to participate in their employer’s HSA plan offering will be required to enter into an Accountholder Agreement as well as other agreements including, but not necessarily limited to, an HSA Adoption Agreement, Custodial Account Agreement, Disclosure Statement, and HSA Deposit Account Terms, Conditions and Disclosures, directly with the third party custodian bank. The custodian bank has the right to charge fees and other amounts to each individual HSA accountholder and, with appropriate notice to such individual HSA accountholder, to make changes to the custodian bank’s accountholder fee schedule and any other terms and conditions contained in any of their documents if and when the custodian bank deems it appropriate.
For clarification, HSA custodian banks are not subcontractors of CONEXIS and the Accountholder Agreement between a custodian bank and each individual HSA accountholder controls the terms under which the HSA is maintained by the custodian bank, including the rights of the custodian bank to charge fees or other amounts to individual HSA accountholders for managing the HSAs.