BASE^® Blog

Financial creep occurs when employees' standard of living rises with their income, turning luxuries into necessities. Employers can help mitigate this by introducing Lifestyle Spending Accounts (LSAs) to support employees' financial well-being.

What is Financial Creep? Financial creep happens when employees spend more as they earn more, often without realizing it. This can lead to financial instability despite higher incomes.

The Role of Employers While salary increases attract and retain talent, it's up to employees to manage their spending. Employers can assist by offering LSAs, which provide reimbursements for services that promote financial stability.

What are LSAs? LSAs are employer-sponsored accounts that reimburse employees for activities and merchandise that enhance physical, financial, and emotional well-being. Unlike traditional benefits accounts, LSAs are flexible and not tax-advantaged.

Growing Interest in LSAs According to a WTW survey, 7% of employers currently offer LSAs, with 38% planning or considering them by 2025. LSAs can cover financial planning services, seminars, home purchase expenses, and more.

Benefits of LSAs LSAs help employees manage their finances better, reducing financial stress. They also offer physical and emotional benefits, making them a versatile tool for employee well-being.

Implementing LSAs Employers should evaluate their current benefits and consider replacing underutilized ones with LSAs. Questions to ask include:

• Are current benefits providing value?
• Can LSAs replace less effective benefits?

LSAs offer a broad spectrum of benefits, supporting employees' financial, physical, and emotional well-being. For more information, contact BASE at 1-888-386-9680 or visit BASEonline.com.

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Retirement can be a daunting prospect for many American workers. According to Bankrate, nearly 45% of workers doubt they'll save enough to retire comfortably, and over 65% feel they're behind on their retirement savings. But there's hope! No matter your age or current savings, starting now is better than not starting at all. One effective way to boost your savings is through a Health Savings Account (HSA).

What is an HSA?

The BASE® Health Savings Account (HSA) is designed to help you save and pay for qualified health care expenses on a pre-tax basis. This means you get excellent tax benefits, making every health care dollar stretch further. But that's not all – the HSA also offers long-term benefits that many participants overlook.

Short-Term and Long-Term Benefits

In the short term, an HSA helps you manage health care costs. In the long term, it provides an opportunity to save for the future. You can use it to pay for future health care expenses or invest the funds to build wealth and diversify your retirement portfolio.

Triple Tax Advantage

The HSA offers a triple tax advantage:

1. Contributions are made on a pre-tax basis.
2. Investment growth is tax-free.
3. Withdrawals for qualified health care expenses are tax-free.

An individual can truly maximize the potential of an HSA by tapping into its investment capabilities. The BASE® HSA allows you to invest in an interest-bearing account or a standard mutual fund lineup.

A Versatile Savings Tool

The BASE® HSA is not just for health care costs. With over 5,000 mutual funds and investment options through a self-directed brokerage account, it can also serve as a retirement savings tool. Withdrawals for qualified medical expenses are tax-free at any age. Once you reach 65, you can use your HSA money for any reason, though non-medical withdrawals will be taxed. This flexibility makes an HSA a powerful tool for achieving your retirement goals.

Learn More

Interested in maximizing your savings with an HSA? Contact BASE® at 1-888-386-9680 to learn more or visit BASEonline.com for more information.

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According to the Kaiser Family Foundation, despite over 90% of the U.S. population having some form of health insurance, an estimated 41% of adults carry health care debt. On top of that, the average cost your clients pay for their employees' health care jumped 6.5% in 2023, amounting to more than $13,800 per employee.

BASE^® has shown clients, like yours, just how much they could be saving with the Integrated HRA. On average, BASE^® has saved businesses $30,000-70,000+ in premium costs. But, how?

With the Integrated HRA.

The BASE^® Integrated Health Reimbursement Arrangement is a type of HRA that allows your clients with a group health plan in place to help reduce the overall cost of the insurance coverage. Also known as a Medical Expense Reimbursement Plan (MERP), it is an employer-reimbursement program that offers savings for your clients and more options for employees.

Savings and options start with your client funding part of the employee's deductible after the employee's portion has been met through the HRA. Your client selects and maintains a group health plan with lower premiums (with a higher deductible) for its employees and partially insures coverage of a portion of the employee's costs.

The Integrated HRA has been proven to reduce employer's health insurance premium increases by 10-50%. And BASE^® can provide employers with a quick snapshot of how much they could be saving before making an investment in the Integrated HRA. Simply contact BASE^®, and with some basic data, you can obtain an Integrated HRA Analysis outlining the savings to be gained by enrolling in an Integrated HRA.

The Integrated HRA Analysis will show employers their current health insurance plan, the insured deductible, monthly premium, and annual premiums. BASE^® will provide 2 scenarios, at different percentage exposures, and show the total annual savings each year.

In a one-page document, in black and white, BASE^® will provide a snapshot of the potential savings by coupling the business' group health plan and the BASE^® Integrated HRA. Not only will the employer save money, but the plan will work with any group health plan, the HRA funds are only paid to the employees once a qualifying expense has been adjudicated, with no prefunding required, and all reimbursements are 100% deductible as a business expense. The employees will be reimbursed for their eligible expenses and all reimbursements are considered non-taxable income.

To see how much could be saved with the Integrated HRA, call 1.888.386.9680 for a free BASE^® Integrated HRA Analysis - a valuable tool when looking for cost saving options when it comes to health care.

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