Health Savings Account (HSA)*

Enhance your employee benefits package by starting a Health Savings Account (HSA). An HSA is a pretax savings tool designed to be combined with a qualified high-deductible health insurance plan (QHDHP)Enrollment in a QHDHP is required in order to make deposits into an HSA. For a high-deductible health insurance policy to qualify, the deductible and annual out-of-pocket expenses must meet specific IRS guidelines..

With a QHDHP, an HSA can give you and your employees greater control over healthcare spending by allowing you to reserve tax-free funds for current and future qualified medical expenses. An HSA can be used for non-qualified medical expenses as well, with the payment of an additional tax and fee.

Triple-Tax Advantage

Include a Premium Only Plan (POP), and an HSA becomes integrated with your payroll processing. This integration enables contributions to be made before taxes are taken out — making an HSA an exceptional tax savings tool for participants.

  • Tax-free interest and potential earnings on HSA funds.
  • Tax-free payment of qualified medical expenses.
  • Tax-free employer contributions that can help your employees start saving.

Rollover Contributions

Each year, participants may contribute an amount up to the annual IRS limit2010
$3,050 for single coverage
$6,150 for family coverage with some conditions. Any unused balances can be rolled over from year to year, and can grow through additional contributions and potential earnings.

Compare Healthcare Accounts

For a direct comparison between an HSA, Flexible Spending Account (FSA) and a Health Reimbursement Account (HRA) see the chart below, or call a licensed Paychex Insurance Agency Representative at 877-393-8868.

Direct Comparison Between an HSA, HRA, and FSA
  HSA HRA FSA
Can be funded by anyone

Can be funded by employer, employee, or both.

Employer funded only

Can be funded by employer or employee
Can be used with any type of health plan

A qualifying high-deductible health plan For more about high-deductable health plans, speak with a licensed Paychex Insurance Agency Representative at 877-393-8868. is required in order to contribute to an HSA.

checkmark

checkmark
Qualified expenses

Any otherwise un-reimbursed expenses are qualified as defined under section 213(d) of the Internal Revenue Code. Exceptions apply.

For general information about qualified expenses, call us at 877-393-8868.

Employers may configure account to reimburse all or some un-reimbursed expenses as defined under section 213(d) of the Internal Revenue Code. Exceptions apply.

For general information about qualified expenses, call us at 877-393-8868.

Medical, dental and dependent care expenses: including co-payments, deductibles, and some over-the-counter medications.

For general information about qualified expenses, call us at 877-393-8868.
Unused amount carries over to the following year

checkmark

Employer may configure the HRA to allow unused funds to be carried over.

Does not carry over, but employer can add a 2.5 month grace period to the end of the plan year.
Account is portable between employers

checkmark

    
Tax savings tool

checkmark

Employer and employee salary reductions are tax free in conjunction with a section 125 plan. If contributions are made outside of a section 125 plan, the individual generally can take a deduction on their personal taxes at the end of the year.

checkmark

Employer contributions are tax free. There are no employee contributions.

checkmark

Employer and employee contributions are tax free.
Can have unlimited contribution amounts

Contributions are restricted by IRS guidelines2010
$3,050 for single coverage
$6,150 for family coverage .

checkmark

Any restrictions are determined by the employer.

checkmark

Any restrictions are determined by the employer. Dependent Care Assistance Expenses are restricted by IRS guidelines.
Catch-up contributions allowed for older workers

checkmark

    
Can be integrated with other accounts

An HSA can be integrated with an HRA or FSA within certain limitations.

Call us at 877-393-8868 for details.

An HRA can be integrated with an FSA, and within certain limitations, an HSA.

Call us at 877-393-8868 for details.

A healthcare FSA can be integrated with an HRA, and within certain limitations, an HSA.

Call us at 877-393-8868 for details.
 

* HSAs are administered by JPMorgan Chase Bank, N.A. Member FDIC. Mutual funds are introduced by, and HSA investment accounts are offered by J.P. Morgan Institutional Investments Inc., member NASD and SIPC, and an affiliate of JPMorgan Chase Bank, N.A.

HSAs are offered by The Bank of New York Mellon Corporation for clients of Paychex Business Solutions, Inc.

back to top