Your little business n 't offer health insurance, but you want to help employees cover they have purchased their own. In this FAQ article we'll answer a common question for small businesses, "Can we use Health Savings Account (HSA) reimburse employees for health insurance ? " 
Can we use an HSA to reimburse employees for health insurance?
the simple answer is no. In most cases, an HSA can not be used for health insurance premiums. (There are some exceptions. We will talk of the following.)
so if your company wants to pay employees for purchase individual health insurance, an HSA is generally not the appropriate vehicle.
To understand this further, let's summarize how an HSA works.
How does an HSA
HSA is type of medical reimbursement scheme . In other words, an HSA is a financial account maintained by an individual to pay for qualified medical expenses.
HSA must be linked to an insurance plan high-deductible health skilled, and everyone can contribute to the account (employer, employee, or a third party).
employees can spend HSA money tax-free for eligible expenses out of pocket medical, as determined by the IRS (see IRS publication 502 and IRS publication 969 ). Eligible expenses include deductibles, co-payments for medical care, prescription drugs, or bills not covered by insurance such as vision and dental care.
Regarding the health insurance premiums, an HSA can not be used on premiums, except for :.
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insurance long term care
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coverage continuation of health care (such as coverage under COBRA).
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coverage of health care while receiving unemployment benefit under federal law or state.
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Medicare and other health care coverage if you were 65 or more (other than premiums for a Medicare supplemental policy, such as Medigap) .
Other ways to help employees with health insurance
If an HSA is not the solution for help employees with their purchase individual health insurance, what is? The most frequent medical reimbursement plan is Health Repayment Plan, or HRP .
A HRP is an employer-funded benefit favored tax to reimburse employees for health insurance premiums. HRP is a type of section 105 Self insured medical reimbursement plan.
Conclusion
Are HSAs commonly used by employers to help employees with pay for purchased individual health insurance? No, but a popular vehicle used to pay health insurance premiums is a planar article 105 Health Reimbursement or HRP.
What questions do you have about how to help employees with the cost of individual health insurance? Leave a comment and we'll help you answer.
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