This calculator helps estimate the value of creating a High Deductible Health Plan
(HDHP) with Heath Savings Accounts (HSA) for your employees. Providing such a plan
not only gives your employees a valuable benefit, it can be a cost saving measure
for your business. Use this calculator to estimate your net cost of setting up your
HDHP and HSA plans.
Definitions
Number of single coverage employees
This is the number of single coverage employees you have that would participate
in the High Deductible Health Plan (HDHP) and Health Savings Accounts (HSA).
Number of married coverage employees
This is the number of married employees you have that would participate in the High
Deductible Health Plan (HDHP) and Health Savings Accounts (HSA).
HDHP Deductible amount
Enter your deductible for your High Deductible Health Plan (HDHP) single person
coverage and for married couple coverage. In 2014, for a HDHP, the minimum deductible amount is $1,250 for self-only coverage and $2,500 for family coverage.
HDHP Premium amount
This is the monthly premium you pay, per employee, for your High Deductible Health
Plan (HDHP). Enter for both single person coverage and for married couple coverage.
Average employer contribution
Enter the percent of the employee's deductible that the employer will be contributing
to their Health Savings Account (HSA).
Average employee contribution
Enter the percent of the employee's deductible that the employee will be contributing
to their Health Savings Account (HSA).
FUTA & State unemployment tax rate
Enter your state unemployment tax rate. State unemployment taxes (SUTA) are generally
not collected on health insurance premiums or HSA contributions, provided those
premiums or contributions are either paid directly by an employer to an eligible
accident and health plan, or paid by an employee on a pre-income tax basis under
a "salary reduction" plan (also known as a "Section 125 plan" or "cafeteria plan").
However, since rules may vary by state you should verify the SUTA treatment of HSA
contributions in the state(s) you operate in. State unemployment tax will apply
to HSA contributions made by an employee through a cafeteria plan on an after-income
tax basis. Note that if your employees will earn more than the state's unemployment
tax wage base the SUTA tax benefit will not affect the calculation.
This calculator assumes that all employees earn enough that the FUTA tax benefit
does not impact our calculation. This would assume that all employees earn more
the $7,000 plus the cost of the HDHP premium plus the total contribution to the
HSA made by the employee.
FICA and Medicare tax payments
FICA and Medicare are not collected on any health insurance premiums paid by the
employer or contributions to an HSA as long as those contributions are paid on a
pre-income tax basis from an employee's paycheck. To allow your employees to make
pre-income tax contributions you will need a "salary reduction" plan (also known
as a "Section 125 plan" or "cafeteria plan"). This calculator assumes that all employees
are under the maximum FICA tax payment limits. For 2012, FICA OASDI would not be
collected on income over $110,100 earned by an individual employee. If their income
exceeded $110,100 the FICA tax savings would be limited or zero. Since Medicare
tax payments have no income limit, this assumption would not affect tax savings
for Medicare.
Income tax rate for business expenses
Enter your marginal income tax rate for your business. You are able to deduct the
cost of any health insurance premiums and employer contributions from your business
income taxes. We use your marginal income tax rate to calculate the total income
tax savings produced by these deductions to your taxable income.
Information and interactive calculators are made available to you as self-help tools
for your independent use and are not intended to provide investment advice. We cannot
and do not guarantee their applicability or accuracy in regards to your individual
circumstances. All examples are hypothetical and are for illustrative purposes.
We encourage you to seek personalized advice from qualified professionals regarding
all personal finance issues.