Understanding Health Spending Accounts (HSAs)

Wiegers Financial & Benefits is one of Saskatchewan’s premier locally-owned family businesses specializing in financial planning and employee benefits consulting. Within our Financial Planning Division, we offer expert investment and insurance planning services to business owners, individuals, and families, helping them achieve long-term financial goals. Additionally, our Group Benefits Consulting Division assists clients in becoming and remaining employers of choice by providing attractive employee benefits, including Health Spending Accounts (HSAs).

What is a Health Spending Account (HSA)?

An HSA is designed to cover traditional healthcare expenses. Employers can offer it in addition to or in place of conventional health benefits, allowing employees to use pre-allocated funds for approved medical expenses for themselves or their dependents. This flexible system empowers employees to prioritize spending based on their unique healthcare needs. For instance, an employee who doesn’t need vision care can use the funds for additional dental work or other necessary treatments.

Common Expenses Covered by HSAs:

• Glasses and vision care
• Dental work
• Prescription drugs
• Massage therapy, physical therapy, chiropractic care

Why HSA’s are a Great Option

One of the most significant advantages of HSAs is the customization they offer. Employees can tailor their healthcare spending to their personal needs, increasing their overall satisfaction and well-being. HSAs are a great way for employers to offer flexible healthcare options that cover a variety of medical expenses, ensuring employees feel supported in managing their health. Another benefit to HSA’s is the employer has several options for unused funds;

• Employers can choose whether to allow unused funds or expenses to roll over into the next plan year.
• If rollovers are not permitted, any unused funds will be forfeited and returned to the employer.
• If rollovers are allowed, employers can set a maximum rollover amount, with the stipulation that any unused funds must be forfeited and returned to the employer by the end of the second year—funds cannot be carried over indefinitely.

Tax Benefits of HSAs

An added benefit of an HSA is that it is tax-free. The Canadian Revenue Agency (CRA) governs which medical expenses qualify, ensuring that employees receive maximum value from their healthcare spending. An HSA offers health benefits that are fully tax-deductible for employers and completely tax-free for employees. It’s easy to set up, has no monthly premiums, and can deliver substantial savings compared to traditional health insurance plans.

How Wiegers Financial & Benefits Can Help

At Wiegers Financial & Benefits, we understand that selecting the right benefits for your workforce is crucial to attracting and retaining talent. We can help guide you through the complexities of setting up an HSA program that suits your company’s needs, ensuring you maximize the value of your health benefits package.

Contact us today for personalized advice on how to implement an HSA plan for your employees.