Pre-tax health savings accounts are an effective way for employees to reduce their taxable income. These accounts enable employees to utilize certain medical benefits with pre-tax dollars, significantly reducing their tax liability. However, these accounts include limited benefits, and with the rising expenses and costs, employees are looking for a more comprehensive plan. Employees seek tax benefits along with medical, mental health, and overall well-being plans.
To cater to these different and unique needs of employees, employers should explore the Lumara Health plan that includes everything from increased home take pay to Mayo Clinic Plans and Mental Health Counseling. Let’s see in detail what pre-tax health saving accounts are, how they lower taxable income, and what the benefits of choosing Lumara Health over a traditional pre-tax health saving account.
What are Pre-Tax Health Saving Accounts?
Pre-tax health savings accounts (HSAs) are tax-advantaged accounts designed to help individuals save for qualified medical expenses. Contributions are made before taxes are deducted, which lowers your taxable income and reduces your overall tax burden. The funds in an HSA grow tax-free and can be withdrawn tax-free when used for eligible healthcare costs. HSAs are typically paired with high-deductible health plans (HDHPs) and offer triple tax benefits: pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified expenses.
How do Pre-Tax Health Saving Accounts Lower Your Taxable Income?
Pre-tax health savings accounts (HSAs) lower your taxable income by allowing you to contribute money before federal, state, and payroll taxes are applied. These contributions reduce your total taxable earnings, which means you owe less in income taxes for the year. Additionally, any interest or investment gains within the HSA grow tax-free. When used for qualified medical expenses, withdrawals are also tax-free. This triple tax advantage makes HSAs an effective tool for both healthcare savings and long-term tax reduction.
Benefits Covered under Pre-Tax Health Saving Account Contributions
Pre-tax health savings account contributions cover a wide range of qualified medical expenses, helping individuals manage healthcare costs while enjoying tax savings and financial flexibility. Here’s are the key inclusions:
- Doctor visits and consultations
- Prescription medications
- Dental and vision care
- Mental health services
- Laboratory and diagnostic tests
- Medical equipment and supplies
- Chiropractic and physical therapy
- Hospital and surgical expenses
Lumara Health: Advanced Plan for Lower Taxable Income and Maximum Healthcare Benefits
The Lumara Health plan is a streamlined, fully compliant Section 125 pre-tax deduction program that integrates a self-insured medical expense reimbursement system. Designed for simplicity and accuracy, it automates essential administrative tasks such as customized plan documents, employee enrollment forms, required legal notices, and non-discrimination testing.
The plan continuously adapts to regulatory updates, ensuring ongoing compliance. It eliminates the need for spreadsheets or manual tracking, offering a hands-off experience for employers. Through payroll deductions, employees can access pre-tax reimbursements for eligible medical expenses, all managed under one cohesive, efficient, and modernized platform.
Key Employer Benefits of Lumara Health
Employers who adopt the Lumara Health plan gain significant cost savings and administrative ease, while offering a modern, compliant benefits program that boosts employee satisfaction and retention. Here are the key employer benefits of the plan:
- Save approximately $600 annually per W-2 employee on taxes
- Reduce total healthcare costs by 5–10% on average
- No setup costs or hidden fees for the employer
- Fully managed and IRS-compliant pre-tax deduction plan
- Automated documentation and ongoing regulatory compliance
- Improved employee retention with enhanced benefits offering
Key Employee Bnenefits of Lumara Health
Lumara Health empowers employees with a richer benefits experience, increasing their take-home pay and providing family-inclusive healthcare support all at zero copay. Here are the key benefits of Lumara Health for employees:
- Increase net take-home pay by up to $100 per month
- Access 24/7 telemedicine and virtual healthcare services anytime
- Coverage extends to spouse and dependents at no additional cost
- Enjoy $0 copays for all health services and benefits
- Receive mental health and counseling services, including EAP support
- Benefit from Mayo Clinic programs and expert health insights
- Get support for addiction recovery and couples counseling needs
Final Thoughts – Make the Most of Every Dollar with Lumara Health!
Pre-tax health savings account (HSA) contributions directly reduce your taxable income, allowing you to save on federal, state, and payroll taxes while building funds for qualified medical expenses. By contributing pre-tax dollars, you effectively lower your overall tax burden and increase your take-home pay. Choosing the right plan provider is key to maximizing these savings. Lumara Health offers a fully managed, compliant, and streamlined solution that integrates HSA benefits seamlessly into your payroll, making tax savings easier and more efficient for everyone.
Transform Your Payroll Strategy Now!
Get a free proposal today to discover how Lumara Health can streamline administration, reduce tax burdens, and enhance employee satisfaction for your organization.
