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0 pointsdctoedt12y ago0 comments

> cash costs the employer more vs something you can expense like health insurance

I don't think that's how it would work. The company would include the extra cash payment in the employee-compensation category of its profit-and-loss statements. The extra cash payment would likewise be tax-deductible for the company (that is unless your salary is over $1 million).

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xiaosun12y ago· 1 in thread

Cash costs both the employer and employee more than premiums or HSA contribution. Since cash is considered to be income for employees:

- Employers have to pay payroll taxes on the cash (~10-12% in taxes) - Employees have to pay income taxes on the cash (~25%+ in taxes)

So an employer would effectively need to give $1.50 in cash to equal the same spending power as $1.00 in HSA contributions.

dctoedtOP12y ago

Ah -- good point; I forgot about the employer's payroll tax liability (Social Security and Medicare), and also about the fact that the employer's liability is effectively the employee's liability (because otherwise the employee would get all the cash including the employer's tax payment). Thanks for the correction.

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