Take Control of Your Health Spending
Health Savings Account’s (HSA’s) and Flexible Spending Accounts (FSA’s) are part of consumer-directed health plans designed to allow you and your employees more control over health benefit expenses. Typically, each employee has an account that accumulates money to pay for covered medical expenses. While not always the case, HSA accounts typically will accumulate funds year to year and are transferrable if someone switches jobs. Ultimately, these accounts provide you and your employees with greater control over the doctors you choose, medications you select, and even the hospital you go to.
While HSA’s and FSA’s are employee funded accounts, there is an option for an employer funded savings account. A Health Reimbursement Account (HRA’s,) is an employer-funded plan that reimburses employees for incurred medical expenses that are covered by the company’s standard insurance plan.
While health savings plans are somewhat new, there are many advantages. Midwest Benefits Consultants can educate you on the best options, how to set these accounts-up, and changes that occur with these accounts
Health Savings Accounts
HSA’s typically have funds deposited in them pretax by an individual or employer. To use these accounts your company or organization must have a “high-deductable” plan in place. These plans require that you must cover a certain amount for your health care expenses before coverage kicks in. The funds from health savings accounts fund these expenses.
Health Reimbursement Accounts
HRA’s are a type of health benefit account solely funded by an employer and reimburses employees for out-of-pocket medical expenses and individual health insurance premiums. These accounts are used to generate tax advantages to offset health care costs for both employees and employers.
Flexible Spending Accounts
FSA’s enable employees to set aside a portion of their income to pay for qualified expenses that is part of an established company or organization cafeteria plan. Funds deposited into an employee’s FSA are not subject to payroll taxes, though they must be used with the plan year or the funds are lost.