Reid Hutchins already had a Health Savings Account (HSA) with a large corporate bank when he learned that Olympia Federal Savings (OlyFed) had begun providing the service. As the owner of Hutchins Advertising, he was familiar with the benefits HSAs provide to small business owners. “As soon as OlyFed started offering them, I signed up immediately,” says Hutchins. “HSAs are a great way to save money when you have a high deductible insurance plan.”
HSAs have been around since 2003 and have become increasingly popular with small businesses in the past few years. They function as medical savings account and are available to those enrolled in high-deductible health plans. “You put money in pre-tax, and it sits there and earns interest,” explains Justin Jacobs, OlyFed’s Health Savings Professional. “If you ever need it for a medical expense, it’s also tax-free once it comes out.”
The plan benefits both business owners and their employees. For employers, HSAs are affordable and help to save on payroll taxes. “High deductible health insurance plans can provide catastrophic coverage for employees at a relatively affordable cost,” says OlyFed’s VP Marketing & Public Relations Manager, Ryan Betz. “Thanks to the affordability of these plans, often employers help setup HSAs for their employees and they make a monthly contribution to the accounts as part of their benefits package to help cover expenses like office visits, physical exams, dental checkups and prescription medications that aren’t often covered by their high deductible insurance plan.”
Employees can also contribute monthly to their Health Savings Account. “The combined power of the HSA and high deductible health insurance is that you have the money set aside from both the employer and employee to deal with routine checkups, but then if something serious happens, you’re not going to go bankrupt trying to deal with hospital bills,” says Betz.
Hutchins agrees. He uses his HSA for himself and his family and says it provides extra peace of mind. “It gives you some savings against medical expenses that you can use at your discretion,” he notes. “It’s a really nice thing for small businesses or sole proprietors like me to have because the only type of insurance we can get has a high deductible.”
Another advantage of HSAs is that you can use them as part of a retirement strategy. Unlike “Use It or Lose It” flexible spending accounts that require people to utilize their funds by the end of a given benefit year, with HSAs your money can remain in the account until you need it. This means the longer money stays in an HSA account, the more tax-free interest it accrues and the more savings a person is able to put away for future medical events or needs. “Those who don’t need it to cover health care costs now can save it for future needs during retirement,” says Jacobs. “It’s a great tax-free way of saving for your long-term health-care needs.”
When Hutchins switched to OlyFed from his corporate bank, he did so for two reasons. The first was the absence of fees. Most financial institutions offer HSAs covered in fees and invest those funds in stocks or bonds, making it more complicated for users to withdraw their money. At OlyFed, the free account comes with checks and a debit card and customers can access their funds at any time.
The second reason was that Hutchins knew that by switching to OlyFed, he would get the advantage of an HSA account with the bonus of a local company with real people to speak with if he had any questions. “I can call someone and get an answer in just a few minutes,” he says. “When I was with this large national company, I’d be on hold for half an hour, and they might call you back in three days. There is no comparison in the level of customer service.”
Hutchins isn’t the only one who appreciates the additional benefits. Customer feedback has been overwhelmingly positive, according to Jacobs. “We have it set up for businesses to do automatic contributions to their employees’ health savings accounts making it easy to meet the needs and goals of both parties,” he explains. “If employees have questions, it’s simple for the business to tell their staff to come to us because we can explain things to them and provide any needed customer support. When you call OlyFed, you don’t get a robot, you get a real, professional, knowledgeable and caring banker that’s ready to help you manage not only your HSA, but also your overall finances.”
Hutchins hopes that more small business owners become aware of the HSA option. “They’re missing out on a great way to save money,” he says. “It can help pay medical expenses, now and into the future.”
Learn more about OlyFed’s HSA program.
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