Healthcare Savings Accounts
Reading Electric was introduced to Healthcare Savings Accounts (HSAs) four years ago by the Conestoga Group from Blue Bell, PA. The Conestoga Group has been advising the company on health care and other benefit areas for over 15 years. Since HSAs have been growing in popularity throughout Pennsylvania, we decided to take a bold step in an attempt to add value to the healthcare benefit.
The greatest appeal is for the younger person who has very few medical bills. For our company, the large insurance premium was reduced. This allowed a reduction in the monthly co-share of the premium to each employee. Now employees contribute to their own HSA with pre-tax dollars rather than to the insurance company. For example, a 28-year-old employee with 2 children can contribute a maximum of $2,500 per year into their HSA for future health care expenses.
The following article from PA Manufacturer magazine (Volume 4, Number 2, 2006) gives a comprehensive overview of how an HSA works in Pennsylvania (which is similar in other states). It is reprinted with permission. (Richard Bashore, Reading Electric)