Best Health Savings Account (HSA) Software

JL

Researched and written by Jeffrey Lin

Health savings account (HSA) providers assist businesses in providing an accessible pre-tax-funded personal health savings account to their employees, helping alleviate healthcare costs. This program allows employees to set aside a percentage of their paycheck or a set dollar amount, before taxes are taken out, into a special HSA account every month. Only qualified medical expenses, as determined by the Internal Revenue Service (IRS), are eligible for purchase using HSA funds. Products that qualify are ones medically related to personal health. For example, hand sanitizer, prescription drugs, and medical care are all eligible for HSA funds.

An HSA provider complements an organization’s existing health benefits plan and is managed by the HR benefits department. Employees access their funds through their HSA portal, which allows them to track their usage, submit reimbursement claims, and provide evidence for claims. Users can also use the account as an investment fund that further benefits employees by acting as a financial wellness tool. Businesses that provide HSA benefits can improve their employees’ personal wellness, financial wellness, and retention rates and also gain employer tax benefits.

Health savings accounts are similar to lifestyle spending accounts as both offer employees a substantial amount of personal freedom and flexibility in prioritizing their health goals. However, they are different in the way they are funded. HSA accounts are funded by pre-tax amounts determined by employees from their paychecks with a yearly limit established by federal law. On the other hand, LSA accounts are funded by a stipend established by the company itself. These solutions often integrate with other HR platforms like benefits administration and benefits support to help HR departments manage their entire employee benefits package.

To qualify for inclusion in the Health Savings Account (HSA) category, a product must: