Employees Not Interested in an HSA, but You Are? Simply ‘Opt Out’

As we’ve discussed, Health Savings Accounts represent the future of health insurance, combining the comfort of control with the practicality to use only what you need when you need it. Most importantly, you’re creating a tax-free nest egg by saving some of the money you’re now sending your insurance provider.

But not everyone feels comfortable with this added control, flexibility and responsibility. While HSA plans are very popular with owners and managers, they don't always hold the same appeal for rank and file employees who prefer the comfort of co-payments (especially when their employers are paying half their premium costs).

But now if you’re a small business owner, you may be able to save group health insurance premium dollars by opting out of your company plan in favor of an individual HSA for yourself and your family. The benefit? You keep everyone happy, with the health care options they desire and save money.

Owners are often more willing to self-insure for a portion of their medical expenses in exchange for tax advantages and potential premium savings offered by HSA plans, so “opting out” makes sense...and dollars. Here’s how it works: you offer traditional HMO (or PPO) group coverage to your employees, and purchase a personal HSA plan for yourself. Since your HSA premiums will be lower than those required by traditional group health insurance plans, you save money while you’re keeping everyone happy with the insurance coverage they prefer.

For Example: the owner of a small business employing six full time employees was paying several thousand dollars each month for his health insurance plan. By dropping out of his group plan and establishing a personal HSA plan for himself and family, he saved $600 each month in overall health insurance premiums or $7,200 in just the first year.

Results vary, but opting out could be worth exploring for you and your business.
Questions? I’m just a click away... ksmith@kensmithinsurance.com