How Can I Set Up a Health Care Savings Account for My Employees?

Objective: Obtain individual health care savings accounts for business owners and their employees so that they can prepare for the medical expenses that they will face in retirement. 

Entity Types:

• LLC
• Corporation
• Non-Profit

Additional Information: Small business owners and their employees can set up an individual health care savings account (HSA) through Lively, Inc. Traditionally, HSAs were only available to companies that already offered health plans with high deductibles.

Answers:

A health savings account is a tax-advantaged personal savings account that’s set up with an eligible high deductible health plan. This provides health coverage while creating opportunities for investments.

In order to open an HSA, an individual:

• Must be covered by a qualifying high deductible health plan.
• Cannot also be enrolled in another non-HSA qualified health insurance plan.
• Cannot have or use a general-purpose Flexible Spending Account (FSA). It’s okay to have or use a limited-purpose FSA for things like dental, vision, and dependent care if your HDHP does not.
• Cannot be claimed as a dependent on another person’s tax returns.
• Cannot be enrolled in Medicare or Medicaid.

For a high deductible health plan to qualify, it must:

• Have a current annual minimum deductible of $1,350.00 for individuals, or $2,700 for families.
• For in-network services, the current annual out-of-pocket maximum cannot surpass $6,750.00 for individuals and $13,500 for families.
• The minimum deductible and maximum out-of-pocket expenses are updated each year for inflation and are subject to change.
• Require the policyholder to pay for healthcare costs up to the deductible before any insurance payments kick in. Preventative care is excluded from this requirement.

Sign up is done online and should only take you a few minutes. You’ll need to provide the company’s name as well as your first and last name, job title, phone number, and email to register.

Lively makes managing health care savings accounts easier by automating simple tasks and by streamlining administrative procedures. Your admin dashboard is available online and will let you view your employees’ enrollment status, add or remove employees, and even update contributions all from the same, centralized location. Lively also has automatic notifications that will help you keep track of your workflow. It will even let you cross off your completed tasks, too.

Onboarding has been simplified as well and is now entirely paperless. This means that it’s easier than ever to set up your employees with their own HSA. You just need to provide your employees’ names, email addresses, and the effective dates of their health plans. If you have more than twenty (20) employees, don’t worry, you won’t be spending all night entering them individually. Lively’s sales team is available to help you enroll them in bulk.

Your dashboard also lets you go over any number of reports and other important data sets. This includes contribution summaries, employee eligibility status reports, and monthly summaries of account activity and invoice statements.

Company contributions and employee deductions have also been streamlined for your convenience. Lively even has payroll syncing capabilities that do away with the need to have a bunch of separate, cumbersome pieces of software. This synching also works for changing the amount or frequency (e.g. one-time or recurring) of your employer-sponsored HSA contributions.

With Lively, your employees have access to a TD Ameritrade Self-Directed Brokerage platform. This gives them an easy way to invest and better prepare for the healthcare expenses they’ll face in retirement.  Adding investments to employee accounts requires no extra fee and can be done entirely online with single sign-on capabilities. From there, they have a variety of investment options from which to pull from. Lively will also provide them with important expense tracking tools.

As we’ve already mentioned, Lively’s team is available by phone, email, or chat to answer your employee’s questions, address their concerns, and guide them through the whole process. This means that you won’t need to waste time finding answers to questions outside of your wheelhouse. Their website has several tools and other educational resources available here, such as a FAQ and some helpful walkthroughs.