Harnessing the Power of HSAs: What Individuals and Businesses Need to Know

A Health Savings Account (HSA) is more than just a medical expense tool – it’s a financial partner for individuals, families and businesses. With an HSA, you can save pre-tax dollars to pay for qualified healthcare expenses, from doctor visits and prescriptions to future medical needs in retirement. Whether you're managing a high-deductible health plan or simply looking for smarter ways to stretch your healthcare dollars, an HSA helps you stay prepared and in control of your health and finances.

HSA Benefits for Individuals

• Triple tax advantage: Contributions are tax-deductible, balances grow tax-free and withdrawals for eligible expenses are also tax-free.
• Control and flexibility: Funds roll over year to year which means you never lose what you don’t spend – and you decide how and when to use your HSA.
• Investment potential: Some HSAs let you invest part of your balance for even greater long-term growth.
• Versatile spending: 62% of HSA spending goes to medical services and procedures, but funds are also usable for dental, vision, prescriptions and more.¹

HSA Benefits for Businesses

• Lower insurance premiums: HSAs pair with high-deductible health plans (HDHPs), which carry lower monthly premiums than many traditional plans.
• Payroll tax savings: Employer and employee contributions via payroll aren’t considered wages, saving both parties on FICA taxes.
• Happy, engaged employees: Financial wellness programs, including HSAs, increase retention (64%) and productivity (56%), according to recent studies.⁴
• Simple plan management: Employers can offer HSAs with limited effort, yet reap tax and health plan cost reductions.

Debunking HSA Myths

Myth: You must use your HSAs by year’s end.
Fact: HSA funds roll over every year - there’s no expiration.

Myth: Only the employer owns your HSA.
Fact: HSAs are employee-owned and portable, even if you change jobs or retire.

Myth: HSAs are only for the wealthy or chronically ill.
Fact: Anyone enrolled in a qualifying HDHP, regardless of income or health status, can use and benefit from an HSA.

Myth: You can only open an HSA through work.
Fact: Anyone with an eligible plan can open an individual HSA at a bank.

Myth: HSAs can’t help with retirement savings.
Fact: HSAs are effective retirement tools for covering future health costs and maximizing tax efficiency.

Maximizing Your HSA – Tips for Individuals and Employers

• Contribute regularly (even modest amounts add up).
• Track your expenses and receipts for future reimbursements.
• Consider investing HSA funds for long-term growth.
• Educate employees to overcome common myths and maximize benefit usage.
• Leverage payroll contributions to boost tax efficiency for your business.

HSA by the Numbers

• 37% of Americans report having an HSA or FSA, with account holders skewing toward millennial professionals with families.¹
• By the end of 2023, there were 37 million HSAs nationwide. That number is expected to reach 44 million by 2026.²
• Average yearly household HSA contribution: $3,030 ($2420 for individuals. $610 from employers).¹
• Average HSA account balance at the end of March 2024: $4,868.²

HSAs aren’t just another account – they’re a smart, flexible solution for healthcare spending and financial growth for individuals and businesses alike. Don’t let myths or confusion keep you from reaping the rewards!

Learn more about Atlantic Union Bank’s HSA options.

This material is provided solely for informational purposes and is not intended to constitute tax, legal or accounting advice, or a recommendation for any investment strategy or transaction. You should consult your own legal, accounting, tax advisers, and/or portfolio manager.

¹Understanding HSA & FSA Trends in Consumer Spending, Numerator.

²Health Savings Accounts: By the Numbers, 401kSpecialist.com.

³2025 Health & Wealth Index, HSA Bank.

⁴How Employees Benefit From Offering an HSA, First Dollar.