Health Savings Account (HSA)

Key Features of an HSA

A health savings account is funded by your employee (employer contributions are optional), allowing them to save pre-tax money for qualified medical expenses. Funds in an HSA grow tax-free and can be used for qualified medical expenses like deductibles, copayments, vision and dental care, and prescription drugs.

For 2025, the maximum HSA contribution is $4,300 for self-only coverage and $8,550 for family coverage. These are the limits for the total contributions from both the employee and their employer.

Employers can – but aren’t required to – make contributions to their employee’s FSA.

To open an HSA, an employee must be enrolled in an eligible High-Deductible Health Plan (HDHP).

Benefits of Offering an HSA

Unlike other plans, the employee owns their HSA, and the money in the account rolls over year to year, even if they change employers or health plans.

An HSA can even be used to pay for medical costs in retirement.

Contributions to an HSA are pre-tax, lowering an employee’s taxable income. Qualified withdrawals are also tax-free.

Funds in an HSA grow tax-free.

Through our affiliate GTM Insurance Agency, setting up an HSA is easy and straightforward.

Looking for some other employee benefit ideas? Check out these options or  download our Employee Benefits Overview (PDF).

Health Insurance & Benefits Options Comparison

The information below will help you compare the various plans and select one that will best meet the needs of your nanny. These are contribution rates for 2025.

HRA

✔ Employer funded

✔ Employer tax savings

✘ Employee funded

✘ Employee tax savings

✔ Covers out-of-pocket expenses

✔ Covers insurance premiums

✘ Used to purchase health insurance

Contribution limit: No limit

Pairing: Group plan

Coverage restrictions: Must cover at least two employees

QSEHRA

✔ Employer funded

✔ Employer tax savings

✘ Employee funded

✘ Employee tax savings

✔ Covers out-of-pocket expenses

✔ Covers insurance premiums

✔ Used to purchase health insurance

Contribution limit: $6,350 single / $12,800 family

Pairing: Individual plans

Coverage restrictions: None

ICHRA

✔ Employer funded

✔ Employer tax savings

✘ Employee funded

✘ Employee tax savings

✔ Covers out-of-pocket expenses

✔ Covers insurance premiums

✔ Used to purchase health insurance

Contribution limit: No limit

Pairing: N/A

Coverage restrictions: None

FSA

✔ Employer funded

✔ Employer tax savings

✔ Employee funded

✔ Employee tax savings

✔ Covers out-of-pocket expenses

✘ Covers insurance premiums

✘ Used to purchase health insurance

Contribution limit: $3,300

Pairing: N/A

Coverage restrictions: None

HSA

✔ Employer funded

✔ Employer tax savings

✔ Employee funded

✔ Employee tax savings

✔ Covers out-of-pocket expenses

✔ Covers insurance premiums

✘ Used to purchase health insurance

Contribution limit: $4,300 single / $8,550 family

Pairing: High-deductible plan

Coverage restrictions: None