How do HSA and Group Insurance Plans work together?
A health saving account helps the members of insurance plan to prepare the future health care expenditure in a tax advantaged way. In this account, a member has to contribute the amount of high deductible to this account year to year. A HSA account is like a form of back up 401kwhich is saving for retirement. You have to save the money in HSA for expenses before retirement; otherwise you have to pay the penalty. But you can withdraw the same amount without paying for the penalty after retirement. HSAs are taken under Employee Retirement Income Security Act and are considered as a retirement plan by the Government. Employees have to be with high deductible insurance plan to open HSA. But if you want to provide your employees with group health insurance plan that is HSA compatible, you will be able to give better health coverage to your employees. And they will be able to keep HSA and be able to grow unlike a 401k account, after they live the company.
