Calculate the Employer's Benefit of Setting HSAs

Health care plans are an important but expensive part of an employee benefits package. Thus, businesses are looking for cost saving alternatives to the regular managed plans, and Health Savings Accounts (HSA) are one of the options.

This calculator will help you estimate the net cost of setting up a High Deductible Health Plan (HDHP) with HSA for your employees.

Explanation of the fields that need to be filled:

If you are looking for the right options for providing health insurance to your employees, you might be interested in reading: Health Insurance for Small Businesses.

Number of single coverage employees

Fill in the number of your single coverage employees who would participate in the HDHP and HSA.

HDHP deductible

Fill in the deductible amount for your HDHP for the corresponding section (single participants or married and family participants).

Note that in 2013, the minimum deductible amount for an HDHP is $2,500 for family coverage and $1,250 for self-only coverage.

Monthly HDHP premium

Fill in the monthly HDHP premium you will pay per employee of this section.

Monthly normal premium

Fill in the monthly premium amount you will pay per employee (of the corresponding section) for traditional health insurance.

Number of family coverage employees

Fill in the number of your married employees who would participate in the HDHP and HSA.

Average employer contribution

Fill in your percentage of the employee's deductible that you as an employer will be contributing to the employee's HSA.

Average employee contribution

Fill in the percentage of the employee's deductible that your employee will be contributing to their HSA.

Income tax rate for business expenses

Fill in your business's marginal income tax rate.

Since health insurance premiums and employer contributions are deductible from your business income taxes, for the purposes of the calculations the tax rate is used to calculate the total income tax savings that the deductions will produce.

FUTA & State unemployment tax rate

Fill in your state unemployment tax rate.

Typically, state unemployment taxes (SUTA) will not apply on HSA contributions if they are paid by the employer directly to an eligible accident and health plan, or if they are paid by the employee on a pre-income tax basis under a "Section 125 plan" (also known as "salary reduction" or "cafeteria plan"). Nevertheless, check the SUTA treatment of HSA contributions in your state(s). SUTA will be collected if the employee makes HSA contributions on an after-income tax basis under a cafeteria plan.

You should note that the SUTA tax benefit does not affect the calculations when employees earn more than the state's unemployment tax wage base.

Our calculator assumes that your employees earn enough (more than $7,000 + the HDHP premium cost + the total employee's contribution to the HSA) so that the FUTA tax benefit will not impact our calculation.

FICA and Medicare tax payments

When contributions are made by the employer on a pre-income tax basis under a "Section 125 plan" FICA and Medicare are not collected. Our calculator assumes that all your employees are under the maximum FICA tax payment limits. Medicare tax payments do not have income limits, and therefore this assumption does not affect tax savings for Medicare.

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