Health spending accounts for retirees

Allows for an additional retiree benefit where bonus dollars can be contributed
By Gerry Beitel
|Canadian Payroll Reporter|Last Updated: 01/24/2011

With the upcoming increase in retirements, the pending tightening of the labour market and the consequent loss of key skills, more companies are relying on retirees as a source of future labour and are looking for innovative ways to maintain positive relations with their retirees, including the offering of post retirement benefits.

As well, for organizations with traditional retiree benefits plan, retirees are often looking for increased flexibility while employers are looking for cost-effective ways to provide benefits. Due to this changing environment, health spending accounts (HSAs) have grown in popularity as a simple and cost-effective way for companies to offer retiree benefits.

As an additional benefit for retirees, many companies are also establishing policies to allow retirees to contribute pre-retirement bonuses into an HSA on a tax-free basis.