Compatible Plans with HSAs

An HSA may be offered under your existing Section 125 Plan if you offer a qualified High Deductible Health Plan (HDHP). An HSA is a great fit for your total employee benefit package.

Tax Savings Through Section 125

By placing an HSA under your Section 125 Plan, you are allowing your employees to make a pre-tax contribution through payroll deduction. This automatic deduction is typically preferred to depositing amounts directly into the HSA because it is more convenient.  The deductions are exempt from payroll taxes and the employees will not have to claim a deduction on their annual income tax returns.

What Qualifies as an HDHP?

To be a qualified HDHP, the health plan must meet certain requirements for minimum deductibles and maximum out-of-pocket expenses. Below are the 2017 requirements.

Individual coverage

$1,300 minimum deductible

$6,550 maximum out-of-pocket

Family coverage

$2,600 minimum deductible

$13,100 maximum out-of-pocket

Pairing an HSA

You have the option to pair your HSA with a limited purpose Health Flexible Spending Account to pay for qualifying dental and vision expenses for you, your spouse, and your eligible dependents. Participating in both plans allows you to maximize tax savings.