With the filing deadline quickly approaching, now is the time for employers to ensure their employees understand the most important, and easiest, way to take advantage of their HSA is by maximizing their contributions.

HSAs are designed for double duty – covering healthcare costs in the present and saving for long-term healthcare needs through investment options – and maximizing contributions can help accountholders take full advantage of this.

For the 2021 tax season the self-only coverage HSA contribution limit was $3,600 and the family coverage limit was $7,200. If an accountholder is 55 or older, they are also eligible to contribute an extra $1,000. One thing to note – any contributions that exceed the IRS annual limit must be removed by the tax filing deadline or your employee could incur tax penalties and/or IRS fees.

Also, important to know is if an accountholder has begun Medicare coverage this year, their HSA eligibility will have ended beginning the month their Medicare coverage began. They can however, up until the filing deadline, still contribute the appropriate prorated contribution limit attributable to the number of months they remained HSA eligible in the year. And regardless of current or future health coverage, they can always keep their HSA open and continue to use funds already in the account.

Since it is commonplace to maximize HSA contributions in the earning years leading up to retirement, employers should reinforce with their employees the triple tax break associated with and help educate employees regarding this transition as they navigate into Medicare coverage.

HSA contributions are tax-deductible, or pretax if made through their payroll deduction. The money in an HSA then grows tax-deferred, and withdrawals that are used to pay for medical expenses are tax free.

While funds in an HSA can be used to cover present healthcare costs, employers should remind their employees that because amounts saved in an HSA roll over each year and stay with the accountholder regardless of employer or employment status, they are also an important investment vehicle.

By applying the HSA savings strategy for long-term investment instead of only for current spending, accountholders can more strategically utilize the tax benefits of their HSA. For example, if an employee has healthcare expenses in the current year, they do not need to pay for them at that time to benefit. Instead, they can invest the money in their HSA, using their regular checking account to pay for out-of-pocket medical costs, and as long as they have saved the receipts, they can reimburse themselves for those expenses down the road. There is no time limit on reimbursement from an HSA so accountholders can maximize their contributions by allowing them to grow over time.

By encouraging your employees to engage with their HSAs as long-term investment vehicles rather than only-spending accounts, employers can help their employees reap strong financial awards this tax season and into the future.

Kevin Robertson is Chief Revenue Officer, HSA Bank.