Sherwin-Williams Employees: Unlocking the Triple-Tax Advantage of Health Savings Accounts

Healthcare Provider Update: Healthcare Provider for Sherwin-Williams Sherwin-Williams provides its employees with access to comprehensive healthcare benefits through employer-sponsored health plans, which include medical, dental, and vision coverage. These plans are designed to meet the diverse needs of their workforce and are typically updated annually during the open enrollment period each October and November. Potential Healthcare Cost Increases for Sherwin-Williams in 2026 As healthcare costs continue to rise, Sherwin-Williams may face significant increases in insurances premiums for 2026. Due to anticipated record hikes in Affordable Care Act (ACA) marketplace plans, some employees could see their healthcare expenses surge by over 75% if enhanced federal premium subsidies are not extended. This situation is compounded by rising medical costs, with overall healthcare costs expected to increase by approximately 8.5% for employers, meaning that Sherwin-Williams will likely need to navigate these challenges while managing employee healthcare benefits responsibly. As a proactive measure, employees might consider optimizing their healthcare choices in 2025 to mitigate potential financial impacts in the coming year. Click here to learn more

Health Savings Accounts (HSAs) are gaining traction in the workplace, offering notable tax advantages for Sherwin-Williams employees enrolled in high-deductible health plans (HDHPs). Despite these benefits, many employees remain unfamiliar with how HSAs work and how to fully benefit from them.  A survey by Empower revealed that nearly 50% of American adults do not fully understand HSAs , which can lead to missed opportunities since HSAs offer unique tax advantages over other retirement savings options like Roth IRAs and 401(k)s.

Understanding Enrollment Trends

A recent survey by MetLife showed that only about one-third (34%) of employees eligible for HSAs enroll, and just 24% of those who do contribute actively to their accounts . This statistic suggests that many Sherwin-Williams employees are overlooking a valuable tool for managing future healthcare costs and growing savings within a tax-advantaged environment.

The Growing Popularity of HSAs

According to Devenir, a Minneapolis-based research and investment firm, around 26 million people had an HSA by the end of 2023, with total assets reaching $137 billion by mid-2024 . Estimates indicate this will rise to $175 billion by 2026. Todd Katz, Executive Vice President of Group Benefits at MetLife, attributes this growth to positive market performance, which has supported HSA balance increases.

Tax Advantages of HSAs

HSAs stand out due to the tax benefits they provide. Contributions are made with pre-tax dollars, which means they aren’t subject to federal tax. Additionally, funds in the account can grow tax-free, provided they remain untouched. When used for qualified medical expenses, withdrawals are also tax-free, making HSAs an effective way to plan for future healthcare costs.

For 2025, an HDHP is defined as a plan with a deductible of at least $1,650 for individuals and $3,300 for families. Sherwin-Williams employees can contribute up to $4,300 for individuals and $8,550 for families in 2025. These contributions can be invested similarly to 401(k)s or IRAs, allowing for gradual growth. However, HSAs are especially valuable because of their tax-free withdrawals for medical expenses, providing a level of tax efficiency that few other accounts offer.

Strategies for Optimizing HSA Benefits

Despite their advantages, HSAs are not universally suitable. Each individual must weigh the lower premiums of an HDHP against the likelihood of meeting a high deductible. Generally, it’s advisable to cover immediate medical costs out of pocket, allowing HSA funds to remain invested for future healthcare needs. This strategy enables investors to benefit from the tax-advantaged growth potential of their HSA.

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HSAs differ from Roth IRAs or 401(k)s due to the triple-tax benefit: pre-tax contributions, tax-free growth, and tax-free withdrawals for medical expenses. However, careful consideration is essential in deciding if an HDHP paired with an HSA aligns with one’s healthcare needs.

If Sherwin-Williams individuals need to use HSA funds for non-medical expenses, there is a penalty: a federal tax of 20% if under age 65. After 65, the 20% penalty no longer applies, but withdrawals are still considered taxable income. Therefore, planning is key before using HSA funds for purposes outside healthcare.

Evaluating HDHPs and HSAs for Sherwin-Williams Employees

Choosing between an HDHP and a traditional health plan depends on individual healthcare needs.  A Voya Financial study found that 91% of American workers renew the same health plan each year without reassessing options , which can be costly for those with frequent doctor visits or expected high medical costs.

Physician Carolyn McClanahan points out that HDHPs aren’t ideal for everyone. 'If you visit the doctor frequently and expect to meet your deductible, a copay plan may be more suitable.' However, for those who foresee limited healthcare needs, an HDHP paired with an HSA offers an effective way to manage medical costs while building tax-advantaged savings for the future.

To make the most of an HDHP, it’s important to fully leverage the HSA. Those able to handle immediate medical expenses out-of-pocket while keeping HSA funds invested can benefit most from the account’s tax advantages and growth potential.

Preparing for Rising Healthcare Costs

With healthcare costs rising, integrating HSAs into a broader retirement savings strategy is wise. Unlike Flexible Spending Accounts (FSAs), which have a 'use-it-or-lose-it' rule, HSAs allow funds to accumulate over time. The account also remains accessible even if employment changes, offering flexibility and greater control over funds.

For those nearing or in retirement, HSAs can effectively offset healthcare expenses. By investing in an HSA and allowing funds to grow, Sherwin-Williams employees can establish a solid financial reserve for future healthcare needs without the burden of taxes.

Given that HSAs now hold over $137 billion nationwide and are expected to continue growing, it’s clear these accounts will play an increasingly central role in retirement planning. Understanding the tax benefits and advantages of HSAs is essential for those considering an HDHP, as it can help make more informed healthcare and retirement decisions.

Think of a Health Savings Account (HSA) as a layered approach to managing medical expenses and retirement. The first tier comprises contributions made with untaxed dollars, helping build savings efficiently. The second tier is tax-free growth, which bolsters long-term financial health. Finally, the third tier allows for tax-free withdrawals for qualified medical expenses, preserving your funds from unnecessary tax burdens. Together, these tiers create a solid framework for managing healthcare costs, building lasting financial resources.