July 24, 2019 –

High deductible health plans (HDHPs) can be great to save money for employers and employees, alike. However, due diligence is required.

HDHPs are combined with a health savings account (HSA) or health reimbursement arrangement (HRA) – conventional health coverage and a tax-advantage approach.

This will help save money toward future medical costs and concurrently offering litheness and acumen in managing your health-insurance affairs.

In effect, HSAs are tax-advantaged accounts. Your employees can use them to pay for medical expenses, deductibles, coinsurance and copays, but not for premiums.

With HSAs, employees make pre-tax contributions, which you can match.

Your employees might love this feature: If they don’t use insurance during a year, the unused funds can be rolled into the following year (this differs from health flexible spending accounts).

HSAs can be attractive for employees who might resign because they’re portable.

Funds can grow faster in some HSAs if they offer the potential for investing in exchange-traded funds or mutual funds.

Even if employees opt-out of an HDHP, they can still keep and spend the funds they had contributed to their HSAs.

Understand your employees

For you as an employer, it’s best to know the needs and wants of your employees, and fully explain options.

Before opting for an HDHP, consideration should be given to how much can be saved in insurance premiums, the amount of dollars contributed to an HSA for medical costs, the deductible for a equivalent preferred provider organization (PPO) plan, and the spending cap for each policy.

If you offer the option of an HDHP vis-à-vis a no out-of-pocket maximum plan, the HDHP might be the best way to go.

The HSA isn’t always a good investment tool for employees – in particular, those with children or those with lots of health conditions – so a conventional PPO might be best.

In shopping for an HSA provider, look for accessibility such as a plan allowing employees to pay for their relevant items online or a linked debit card.

2020 IRS limits

The 2020 cost-of-living adjusted limits:

  • HSA contribution limit (employer and employee) – self only, $3,550; family $7,100
  • HSA catch-up contributions (age 55 or older) – $1,000
  • HDHP minimum deductibles = self only, $1,400; family $2,800
  • HDHP maximum out-of-pocket amounts (deductibles, copays, and other amounts, but not premiums = self only $6,900; family $13,800

Many employees are apprehensive about high-deductible plans. So, HSAs might be a solution, but only if employees understand how to take advantage of them.

Therefore, if you want to offer an HDHP-HSA plan, take great care in explaining it.

From the Coach’s Corner, editor’s picks:

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Employees – Overtime Pay Issues and FLSA Exempt Status – Many employers continue to violate wage and hour rules. To avoid costly and time-consuming legal hassles, you might want to review your overtime pay policy and all your exempt-employees’ status to comply with the Fair Labor Standards Act (FLSA).

HR Tips to Manage Suspicious FMLA Leave – One most-challenging issues facing employers is the fishy use of leave by employees under protection of the Family and Medical Leave Act. The FMLA has been costly to businesses. It has led to productivity issues and disruptions in scheduling and expenses. Here’s what you can do.

Tips to Avoid Legal Stress from Nonexempt Pay Errors – If your pay program for nonexempt employees isn’t kosher, you’ll likely be confronted with legal hassles. Such hassles will result in having to pay back wages, overtime, liquidated or double damages.

Employee Records: Which Ones to Save and for How Long – You don’t want to keep unnecessary employee records. Nor do you want to make a rash decision on whether to destroy records. Here are the laws you need to know.

Best Practices with HR Records to Guard against Legal Risks – If you aren’t able to supply relevant documentation, you’ll pay a heavy price. In some cases, you’ll even be forced to give the job back to a nonperforming or toxic employee.


“The only way to keep your health is to eat what you don’t want, drink what you don’t like, and do what you’d rather not.”

-Mark Twain


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.