Health Savings Account (HSA): Overview

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A Health Savings Account (HSA) holds tax-exempt money that an employee can use for out-of-pocket medical expenses. An employee is eligible to set up an HSA if they satisfy all federal requirements, such as participating in a High Deductible Health Plan (HDHP).

• You and your employee can both contribute to their HSA.
• The maximum total annual contribution from you and your employee is their HSA plan deductible or the current IRS limit (whichever is lower).
• If your employee has an employee-deducted and company-contributed HSA, Box 12 on their Form W-2 will show the total of the two amounts.
• Contributions from you and your employee might be subject to taxes in some state and local jurisdictions.

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