Why Companies Rely on PBS for Benefits Management
What is a Health Savings Account?
A Health Savings Account (HSA) is an individual savings account owned by the employee that helps pay for qualified medical expenses not covered by a high deductible health plan (HDHP). This type of plan empowers individuals to manage their health care costs through a tax-advantaged savings structure.
Contributions to an HSA are made on a pre-tax basis, lowering your federal income tax liability. Since the contributions reduce your taxable income, employees can realize substantial tax savings over time. An HSA is similar to an individual retirement arrangement (IRA): account holders own the funds, direct the investment options, and unused balances roll over year to year, continuing to grow.
Employees can contribute to their HSA through payroll deductions or direct deposits. When paired with an HSA-eligible HDHP, the health plan helps cover significant medical events, while the HSA provides coverage for qualified medical expenses until the deductible is met.
How Can I Use HSA Funds?
HSA dollars can be used during the plan year to pay for eligible health care items and services. PBS makes this process easier with our Prepaid Benefits Card, a special-purpose MasterCard™ that lets you access your HSA funds with a simple swipe. You can check your card balance 24/7 via the PBS online portal or our mobile app, PBS Benny.
The PBS Benefits Card is valid for five years, and replacements are only issued upon request or if the card is lost. After enrollment, employees must log into their PBS portal to review and accept the HSA terms and conditions to access their funds.
Qualified HSA Expenses
According to the IRS, HSA funds can be used for a wide range of qualified medical expenses incurred by you or your dependents (IRS Publication 969). These expenses are for the diagnosis, treatment, prevention, or mitigation of medical conditions. HSAs cannot reimburse any expenses that are already covered by another source.
Examples of eligible health care expenses include:
- Prescriptions, including birth control
- Copayments, deductibles, and coinsurance under your health plan
- Amount owned on medical and dental bills
- Orthodontic care and dental services
- Vision care, including LASIK and corrective lenses
- Medical supplies such as bandages, thermometers, and blood pressure monitors
- Over-the-counter medications, allergy relief, and pain relievers
- Menstrual care products and other IRS-qualified items
- Remote care services such as telehealth consultations
- Hospital care, including inpatient and outpatient treatments
- Long-term care insurance premiums (if qualified)
For a comprehensive list of covered items, please refer to the PBS Complete FSA Eligibility List. HSA coverage often mirrors that of Flexible Spending Accounts (FSAs).
Annual HSA Contribution Limits
The IRS sets limits on the amount you can contribute to an HSA each year. These limits vary by coverage type and year:
2023 Contribution Limits
- Self-only coverage: $3,850
- Family coverage: $7,750
2024 Contribution Limits
- Self-only coverage: $4,150
- Family coverage: $8,300
If you’re 55 or older, you may make an additional contribution of $1,000 annually.
Your HSA balance carries over from year to year, making it an essential tool for long-term benefits management. The funds remain with you even if you retire or change jobs. Contact PBS or your Human Resources department if you need to initiate an account transfer.
Post-65 Usage Rules
According to IRS Publication 969, after age 65. Unused HSA funds can be withdrawn for non-medical expenses without penalty. However, standard income tax will apply. If used for qualified health care expenses, the distributions remain tax-free, making HSAs a valuable retirement planning resource.
Benefits of Partnering with PBS
The PBS benefits administration software platform offers a seamless solution that consolidates multiple HR and benefits-related tasks into a centralized system. With PBS, organizations gain a benefits administration system that’s intuitive, secure, and compliant with IRS rules.
Our system supports:
- Integration with benefits management tools and payroll providers
- Compliance monitoring for IRS and benefits regulations
- Coordination with employer contributions
- Compatibility with Health Reimbursement Arrangements (HRAs) and cafeteria plans
Additional Advantages
PBS offers access to trusted banking partners. We also simplify deduction amounts, provide visibility into plan performance, and help ensure benefits compliance.
We also:
- Eliminate paper-based processes for enrollment and account access
- Support long-term care expenses and vision care benefits
- Offer real-time account visibility through a self-service portal
- Help reduce legal, claim, and premium costs for employers
- Work with Consumer Driven Health Plans (CDHPs) and Catastrophic plans
- Guide on excess contributions and how to report them on your federal income tax returns
- Assist with health care continuation coverage during employment transitions
Ready to Simplify Your Benefits Administration?
PBS empowers businesses and their HR teams to manage employee benefits with confidence. By combining a flexible HSA solution with powerful benefits administration software, we reduce administrative complexity while increasing employee engagement.
Whether you’re navigating high-deductible health plans, setting contribution requirements, or selecting investment firms, PBS delivers the guidance, tools, and automation needed to support every stage of the benefits administration process.
Partner with PBS and provide your workforce with smarter, more strategic ways to manage their health care coverage, prepare for the future, and stay compliant with federal income tax and FICA tax regulations.
Contact us today to learn about our plans!