Medicare and Social Security are two subjects complicated enough to give anyone a mental workout. However, it’s important for employers and employees alike to understand how Medicare and Social Security affect contributions to a health savings account (HSA). While the rules are actually quite straightforward, the penalties for making improper contributions are steep. Employees and employers should be informed to ensure they don’t inadvertently break the rules.
Health savings accounts (HSAs) have been around since 2003; however, many people remain unfamiliar with them. Similar to a personal savings account, an HSA allows an individual to use untaxed savings to pay their own individual health insurance costs—and to receive employer contributions up to a certain amount.
With pensions being quickly phased out and the future of social security increasingly uncertain, concerns about retirement savings are rising. Many Americans start saving too late, and do they do not know how much they should save. According to the National Institute on Retirement Security (NIRS), “the average working household has virtually no retirement savings.” With the rising popularity of high-deductible health plans (HDHPs), health savings accounts (HSAs) have also become more prevalent. Most people don’t think of HSAs as a way to save for retirement, but they are actually IRAs (individual retirement accounts) but better—and they can help you live more comfortably in your golden years.
Helping employees plan for retirement is one way that businesses can remain competitive in the retention and recruitment of employees. Offering an individual retirement account (IRA), with contributions from either the company or the company and the employee, can be a great way to do this. There are three primary types of vehicles that companies can use to encourage workers to save for retirement: A payroll deduction IRA, a Simplified Employee Pension (SEP), and a Savings Incentive Match Plan for Employees Individual Retirement Account, or SIMPLE IRA.
More U.S. employees are satisfied with their company-sponsored retirement benefits now compared with five years ago, but satisfaction with health care benefits, especially the cost of medical benefits, has declined. This is according to a new survey by Towers Watson.
Disclaimer: The information provided on this website is general in nature and does not apply to any specific U.S. state except where noted. Health insurance regulations differ in each state. See a licensed agent for detailed information on your state. Zane Benefits, Inc. does not sell health insurance.