Chris sat at his desk one evening after finishing another long day of service calls in Lubbock. His crew had put in the hours, climbing in and out of hot attics to keep customers cool. Business was steady. But as he looked over the renewal notice for his company’s health insurance plan, he felt his stomach tighten.
The health insurance premiums were going up again. He wanted to take care of his 15 employees, but at this rate, the cost of health benefits was starting to chip away at the money he needed to keep the doors open and trucks on the road. Something had to give.
Chris had recently come across the idea of a high deductible health plan paired with a health savings account in an online article he read. At first glance, it sounded like a fantastic idea to reduce his costs for health coverage. Lower premiums? That could save his business thousands of dollars each year.
But Chris had questions. Would his employees see it as a downgrade to their benefits package? Could they handle the higher deductibles which makes things like prescription drugs higher? Would this actually give them value for medical care, or was it just another way for insurance companies to shift healthcare costs around?
If you’ve ever felt that same tension between wanting to protect your people and needing to protect your budget, you’ll understand exactly where Chris was coming from. Here are three things he learned about high deductible health plans with HSAs that every Texas small business owner should know.
Three Things A Small Business Owner Needs To Know About High Deductible Health Plans
If you're in a pinch, here are the three big ideas Chris learned while searching for answers about High Deductible Health Plans.
If you want to dig a little deeper, there are FAQs at the bottom of the page. Otherwise, back to Chris' story.
Lower Premiums vs. Higher Out-of-Pocket Costs
The first thing that caught Chris’s attention in the article he read are the lower health insurance premiums for these types of plans. Compared to his old group health insurance plan, the monthly bill for a high-deductible plan was a lot easier to swallow. For a business where every dollar mattered, that kind of savings felt like a real relief.
But the details on the individual deductibles told a different story. Employees would have to pay more out of pocket before their insurance coverage actually started to help. Paying full price for a doctor's visit before the deductible was met could be a tough pill to swallow for his employees.
After realizing that his employees would have all of their medical expenses covered inside the provider network could save a lot of money for the employee after the out-of-pocket maximum was met, he could see a path forward. This was a result of a drastically lower out of pocket maximum amount that is traditionally found on these plans.
That’s when he realized the trade-off: the business spends less each month, but employees carry more financial responsibility upfront. For Chris, the answer wasn’t just to pocket the savings. He needed to think about how to share those savings back with his team.
As Chris contemplated how to pass the savings back to the team, he learned of Health Savings Accounts that are tied to these types of health plans. Contributing to their HSAs could give them money to cover those higher deductibles and make the plan less intimidating.
The lower premiums got him interested. Understanding the real impact on his employees kept him honest about how to make these health plans work.
HSA-Qualified Plan Tax Advantages
Chris wasn’t a tax expert, but when his accountant walked him through the numbers, the benefits clicked. A Health Savings Account isn’t just a savings account. It’s a powerful tool that helps both the business and the employees.
Employees can put money into their HSA before payroll taxes are calculated, which lowers their taxable income. They can then use those funds for qualified medical expenses, from prescriptions to doctor visits. And if they don’t spend it all, the money stays in the account and grows tax free.
For the business, contributions into employees’ HSAs are considered a pre-tax health benefit. That means Chris could redirect some of the money he saved on premiums into those accounts and lower his company’s tax bill at the same time through available tax credits. Triple win: tax-free contributions, tax-free growth, and tax-free withdrawals for medical expenses.
When Chris saw the math, he realized he could give his employees real financial support while still coming out ahead compared to his old plan. It wasn’t just about saving money. It was about using the money for health insurance smarter.
Long-Term Value for Employees
The part Chris liked most about HSAs was what they meant for his employees long-term. Unlike flexible spending accounts, HSA money doesn’t vanish at the end of the year. It rolls over, year after year, building a cushion that grows with them.
Employees can even invest their HSA funds, turning it into something like a retirement account for healthcare. That meant one of Chris’s techs could use their HSA to pay for a prescription this year, then let the rest sit and grow until they needed it for a surgery five years down the line. Or even carry it with them into retirement.
For Chris, this made the plan feel like more than just a cost-cutting move. It was a benefit with lasting value. It showed his employees that he was thinking about their future, not just the next pay cycle. That kind of stability in small businesses builds loyalty, and loyalty keeps good people around.
Finding the Right Fit
By the time Chris finished looking at all the pieces, he had a clearer picture. A High-deductible health plan paired with a Health Savings Account can save his business money on his group health premiums. It could give his employees powerful tax benefits. And it could provide them with a long-term financial tool they could use for years to come.
But he also knew it wasn’t perfect. Higher deductibles can still sting if employees aren’t ready for them. That’s why Chris didn’t make the decision alone. He worked with a Texas health insurance expert who helped him compare options, run the numbers, and build a contribution strategy that made the plan work for everyone. That's why Texas small business owners prefer to work with the experts at Insurance For Texans.
Chris came out of the process with a plan that fit his budget and supported his people. He didn’t just cut costs. He made a smarter investment in his business and his team through their employee benefits.
Options Matter
If you’re a Texas small business owner staring at another round of premium hikes and wondering how to make benefits work for your team, you don’t have to go through it alone. At Insurance For Texans, we help owners like you find health insurance options that fit your needs without the confusion to make open enrollment as easy as possible for you and your team.
Click the button below to explore whether a high deductible health plan with an HSA is the right move for your business.