A Simple Guide for Employers on HSA Plan Design, Part IV

Employers considering introducing HSAs need to select a high enough deductible, to create a big enough drop in the plan premium, to free up enough cash to fund the account. The reason a high deductible plan is required by law is so that money which was going to the insurance company in the form of monthly premiums, can instead go in the employee’s pocket (HSA).

Congress did not expect employers or employees to pay for a traditional insurance plan, and then come up with several thousand dollars to deposit into the HSA – that would have been unrealistic and unworkable.

The high deductible plan mandate is there for this very specific reason, and employers should use the HSA tool the way it was designed. Employers should not select the minimum allowable deductible – but should shop at the upper end of the HSA allowable deductibles.

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