For those new to the Health Savings Account (HSA) world, knowing what is considered a “qualified medical expense” can be somewhat confusing. Many of the Web sites about HSAs refer to IRS Publication 502, which explains the itemized deductions for medical expenses, but this list is not entirely correct for HSAs. For example, most insurance premiums (with a few exceptions) are not considered qualified medical expenses for the purpose of an HSA, but they can be claimed as an itemized deduction according to IRS Publication 502.

In an attempt to clear up the muddy waters that inevitably come from the IRS, I will break down some of the most commonly asked questions about qualified medical expenses. Of course doctor’s fees, payments toward your deductible, and prescription medications can be paid for with HSA funds. Also, over-the-counter medications such as pain relievers, allergy medications, antacids, sleep aids and cold medicines are considered qualified medical expenses. Over-the-counter weight loss drugs, vitamins, and dietary supplements are not qualified medical expenses.

Some other qualified medical expenses that you may not know about include:

· Braces
· Chiropractic Care
· Vision Correction Surgery
· Contact Lenses and Eyeglasses
· Acupuncture
· Alcoholism and Drug Treatment
· Dental Treatments
· Hearing Aids
· Dentures
· Psychologists
· Therapy Equipment
· Vaccines

It is important to note that you are responsible for making sure that your HSA money is being spent on qualified medical expenses. If you are audited, you will have to prove that you spent your HSA money correctly. If you are unable to prove that the money was spent appropriately you may face tax penalties.

Samantha Bushard is an HR employee for the Idaho office of A Plus Benefits, Inc.

Keeping good employees tends to be less of a problem for large companies according to a recent article on the Forbes Web site. The article states that this trend is the result of larger firms are able to offer higher salaries, weeks of paid vacation and other perks that draw employees in and keep them there.

That is not to say that small business owners are unable to retain good employees. There are several strategies small business owners can adopt in order to compete with the big guys. For instance, a survey by Office of Advocacy of the U.S. Small Business Administration found that employee retention increases for small companies by 26.2% for a given year when benefits are offered.

Many small business owners don’t consider offering a benefits package to their employees because of the associated costs. However, there are options for small businesses including working with a PEO. Sometimes it just takes some shopping around to find a solution that will work best for your company.

There are also some other inexpensive retention strategies suggested in the article including company picnics, participation in community sports leagues, and offering discounted gym memberships or other company discounts.

These perks play up the main benefit employees see in working for a small company: a close-knit, community working environment. Many employees find value in knowing the people they work with on a more personal level and feeling like they are an important part of the company. That sense of pride and belonging can help your employees stay put rather than looking for new opportunities.Samantha Bushard is an HR employee for A Plus Benefits, Inc.

In previous blogs I have discussed some of the benefits of owning an HSA, but what are the benefits to employers for offering HSA qualifying health plans?

One benefit is lowering your healthcare costs as an employer. Most group health plans require the employer to make some contribution to employee premium amounts. The High Deductible Health Plans that qualify for HSAs generally have lower premiums. This gives the employer the opportunity to pay a part (or all) of the premium and contribute some money to the employee’s HSA for a lower overall cost than the premium on a traditional health plan.

HSAs can offer greater flexibility to your employees when it comes to controlling health care costs and can be a less expensive alternative for you as an employer. Offering flexible benefits options helps keep employees content and may assist in attracting and retaining quality employees.

It may be time to consider HSAs for you and your employees.

Samantha Bushard is an HR employee for the Idaho office of A Plus Benefits, Inc.

One of the best things about HSAs is their flexibility. As you may have read in previous blogs, HSAs are available to individuals on High Deductible Health Plans (HDHPs). This means that you can only contribute to your HSA pre-tax while you are on a HDHP.

But say for example you decide after a few years that you need a traditional health plan due to pregnancy, illness, etc. Once you change to a traditional plan you can no longer contribute to the HSA, but you can use the money in the HSA free of tax penalties as long as you continue to spend it on qualified medical expenses.

Additionally, the HSA is created in your name, so the account moves with you from employer to employer and as long as you are still on an HDHP you can continue to contribute pre-tax. HSAs offer you the freedom to change employers and health plans without losing any of your savings.

Samantha Bushard is an HR employee for the Idaho office of A Plus Benefits, Inc.

In a previous blog I discussed what HSAs are and who qualifies to participate in them. Now I would like to discuss some of the benefits for HSAs in a series of blogs.The first benefit of HSAs is the tax savings associated with the program. Contributions to your HSA are made with pre-tax money which decreases your overall taxable income and any earnings made on money in your HSA are not considered a part of your gross income.Additionally, all distributions from your HSA used for qualified medical expenses for you, your spouse or your eligible dependents are also tax free. Consider the money you could save in taxes by using an HSA.

Samantha Bushard is an HR employee for the Idaho office of A Plus Benefits, Inc.