BASE^® Blog

Being able to offer employees a custom health benefits package is a great way to attract and retain employees, but if the health benefits are found favoring one group of employees over the other, the health benefits will be found not in compliance with the IRS and will open the business up to severe IRS penalties and employees left to pay taxes on the pre-tax dollars they elected.  To continue to provide the custom health benefits package, a test must be completed each year to determine if a plan complies.  One way to ensure compliance is with Non-Discrimination Testing and BASE® can help! 

Non-Discrimination Testing (NDT) is a set of tests that is required by the IRS to determine if a company’s benefits are fair for all eligible employees. 

The BASE® NDT is for businesses who offer health and welfare benefits to their employees who want technical assistance to comply with all the regulations to maintain their tax-favored status.    

Why does Non-Discrimination Testing matter?

NDT matters because even though it is confusing and challenging, it is NOT a choice.  The IRS requires any business who offers health and welfare benefits to assess compliance on their Premium Only Plans (POP), Section 125 Cafeteria Plans, and Self-Funded Arrangements. 

NDT prevents health benefit plans from discriminating in favor of employees who are considered highly compensated employees or key employees to the business. 

Non-Discrimination Testing may seem like an unnecessary test, but failing to comply puts employers and their employees at risk of having to pay taxes on the benefits provided and IRS penalties. 

NDT should be completed once a year, ensuring that employee benefits continue to be in compliance and that employees can continue to receive the tax-free benefits. 

For more information on the BASE® Non-Discrimination Testing (NDT), contact BASE® at 888.386.9680 or visit www.BASEonline.com. 

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Every year, very few HSA accountholders take advantage of the ability to invest their HSA funds - as high as 12%!  Even though every year, for the past five years, the share of accountholders investing has increased, many are still not utilizing this option to reach their financial goals.  Check out this week’s blog to learn about the other 2 ways to reaching financial goals with the HSA!

The Health Savings Account (HSA) is a personal savings account designed to help individuals save and pay for qualified health care expenses.   Employees use the HSA funds to pay for thousands of eligible items such as copays, over-the-counter medications, dental, vision, and more with tax-free dollars making it an excellent tax benefit to help make the most of every health care dollar. 

The BASE® HSA not only allows employees to pay for their health care expenses; but allows for the opportunity to save for the future, invest funds to build wealth, and create a powerful tool for a retirement portfolio. 

How are financial goals met with a Health Savings Account (HSA) in place?  Check out these 3 ways below:

1).  Max Out HSA Contributions.

With health care costs and costs of living on the rise, saving for retirement is more important than ever.  Each year, if individuals can max out HSA contributions within the IRS limits, it will easily allow funds to grow over time with triple tax advantages. Because funds carry over from year to year, there is no risk of losing those funds at the end of the plan year.  BASE offers clients the My HSA Planner tool to help participants determine the right amount to contribute funds based on income and goals.  This educational tool presents personalized calculations such as future savings balance, potential retirement balance, and projections based on participants contribution levels, just by entering in basic information. 

2).  Set and Monitor Savings Goals.

It is vital that goals set are achievable and realistic.  But also important is monitoring those goals.  HSA contribution amounts are flexible and can be changed at any time during the plan year while post-tax contributions can be made at any time.  It is best for individuals to check in on HSA status each quarter to see if you are working towards that goal. 

3).  Invest HSA Funds.

Investing HSA funds can make money grow faster, tax-free, and help supplement the long-term goals while saving for retirement.  Most people with active HSAs do not take advantage of this opportunity, stating that in 2020, only 6% were investing their HSA balances. 

This year marks the 20^th anniversary of HSAs, with National HSA Awareness Day on October 15^th, which is a significant milestone in the life of these accounts.  Tens of millions of Americans can save, through their employer, for current and future health care needs and be more educated on making health care decisions.  Each year, the HSA can be a powerful tool to help pay for eligible out-of-pocket health care expenses while also being a powerful tool to achieve financial success in the future. 

For more information on the BASE® Health Savings Account (HSA), contact BASE® at 888.386.9680 or visit www.BASEonline.com. 

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