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What Small Businesses Need to Know About HSAs

March 31, 2023

As healthcare costs continue to steadily rise, many small business owners are looking for practical healthcare options for themselves and their employees. A popular option is a Health Savings Account (HSA) due to its tax benefits and flexibility.

What is an HSA?

An (HSA) is a type of savings account used to set aside money, either pre-tax or tax-deductible, to help pay for qualified medical expenses. To be eligible for an HSA, you need to be enrolled in a high-deductible health plan (HDHP). What qualifies as HDHP, is defined by the IRS each year.

Cost Savings

HSAs are cost-efficient for both employers and employees. By using an HSA account your taxable income for the year can be reduced while still paying for your health expenses. Because the money rolls over from year to year, it is easier to save for emergency medical expenses.

This money will gain interest while in the account and is not subject to taxes either. Small businesses are also able to reduce their taxable income, as any employer contributions to an HSA are tax-deductible too.

Attract and Retain Employees

Offering an HSA as one part of a benefits package can help small businesses attract and retain top talent. The flexibility and tax benefits are appreciated by employees and they help small businesses compete with larger companies. Our Centier HSA also includes investment2 options and triple tax savings.

Tax Benefits

Additionally, HSAs offer several tax benefits, such as tax-deductible contributions, tax-free earnings, and tax-free withdrawals for qualified medical expenses. Contributions1 to an HSA are not subject to federal income tax or payroll taxes, so employees save money on their taxes.


Employees own their HSA accounts, so they have more flexibility and control over their healthcare spending. Typically, HSAs are used to pay for co-pays, deductibles, coinsurance, or prescription medicines. However, funds can also be used to pay for medical expenses you find important, like alternative therapies or preventive care.


HSAs are portable, in other words, employees can take their HSA account with them if they change jobs or retire. This allows continuity for employees when saving for their health care.

From cost savings and flexibility to tax benefits and control, HSAs are a lifesaver for managing healthcare expenses. Learn more about how a Centier Bank Health Savings Account, powered by Lively, can be a great option for you and your employees.




FDIC insured through Centier Bank, for so long as funds remain uninvested and on deposit with Centier Bank. Centier Bank Health Savings Accounts, powered by Lively are provided by Lively Inc. and are subject to their approval. Lively Inc. is not affiliated with Centier Bank.


1Contributions to and earnings on HSAs are not subject to federal taxes but may be subject to state taxes depending on where you reside. Centier Bank does not provide tax or legal advice. Seek the advice of your own tax and legal professionals to ensure your compliance with applicable HSA and other laws. Investment options are provided by Charles Schwab and Devenir; fees may apply. ²Investments are: NOT FDIC INSURED – NOT BANK GUARANTEED – NOT A DEPOSIT – MAY LOSE VALUE.