For a business owner, one downside of most tax-advantaged health plans is that you have to pay for employees if you want the health care for yourself. Often, that’s too expensive to warrant the benefit.
If you operate your business as a sole proprietor, S corporation, or single-member LLC, you can establish a health savings account (HSA) for yourself without having to contribute on behalf of your employees.
Your employees can contribute to their own individual high-deductible health plans and HSAs and then deduct the contributions on their personal tax returns.
Want to Contribute for Employees?
If you wish, you can make contributions to your employees’ HSAs. You deduct your contributions as a business expense, and your employees receive the benefit of your contributions tax free.
Triggers Nondiscrimination Rules
If you contribute on behalf of employees, you must follow nondiscrimination guidelines called HSA comparability rules. These complex rules are designed to ... Log in to view full article.