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Consumer-Driven Health Plans
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You've heard the buzz. You've seen the hype. Consumer-driven health plans may lower costs, change behavior, and save money. The goal is to give consumers “skin in the game” when it comes to allocation of their healthcare dollars. Sounds good but complicated. It might be do-able for a national employer, but could seem out of reach for the small and mid-sized business. Not true. As technology has simplified most other facets of our daily lives, technology has simplified the management of employee benefits.
Below we discuss the three most common forms of consumer-driven plan formats These are fast becoming the critical component to any employer seeking control of current and future benefit costs. Let Resource Group design a plan which makes the most sense for your company.
To learn more about these consumer-driven health plans and how they can save your company significant dollars today and well into the future, please contact Paul Squassi at (800)279-1433 or CLICK HERE for our online contact form.
A Health Savings Account (HSA) is a tax-advantaged account participants can use to pay for qualified health expenses they incur while covered under a high deductible medical plan. HSA dollars, contributed by the employer, employee or a qualified family member, accumulate over time with interest or investment earnings, are tax-free, are portable after employment and can be used to pay for qualified health expenses tax-free, or for non-health expenses on a taxable basis.
An eligible individual:
To participate in an HSA you must have an HSA-qualified High Deductible Health Plan.
Although the amounts are adjusted yearly for inflation, in 2012, Federal law defines this as a plan that:
For more information on government regulations of HSAs, go to http://www.treasury.gov/resource-center/tax-policy/Pages/Health-Savings-Accounts.aspx
Employers should carefully weigh all consumer plan options and choose one (or more) to best fit their needs. HSAs give individuals the opportunity to plan for future health expenses. They provide options to support retiree benefit strategies and/or the needs of employers interested in portability of coverage. The tax advantages of the accounts are valuable to both employer and employee.
Employers should carefully consider the following about HSAs:
To learn more about these consumer-driven health plans and how they can save your company significant dollars today and well into the future, please contact Paul Squassi at (800)279-1433 or CLICK HERE for our online contact form.
Health Reimbursement Arrangements (HRAs) are IRS approved tax-favored accounts that are 100% employer-funded and set up for the purpose of reimbursing employees for qualified medical expenses. HRAs are used in combination with a High Deductible Health Plan – the employer chooses a health plan with a high deductible, thereby slashing premiums and creating real savings, and then sets up an HRA to help cover the deductible costs. The idea is that the HRA contributions will be funded using the savings gained from the lower premium cost, and will thus enable the employer to fund the HRA, which will then be used to reimburse employees for covered medical expenses.
The following link will take you to a short and very informative video that clearly explains the mechanisms of an HRA:
http://www.healthconnectsystems.com/hcs/HRAERVideo.aspx
To learn more about these consumer-driven health plans and how they can save your company significant dollars today and well into the future, please contact Paul Squassi at (800)279-1433 or CLICK HERE for our online contact form.
Flexible Spending Accounts are employee-funded accounts, set up by the employer, which allows the employee to contribute a portion of their earnings to pay for qualified expenses. These accounts are allowed under section 125 of the Internal Revenue Code and are also called “125 plans” or “cafeteria plans.” The employee contributes funds to the FSA through a salary reduction agreement and is able to use the funds for medical bills or dependent care, depending on the type of FSA. The money deducted from the employee’s salary and put into the FSA is not subject to payroll taxes, resulting in substantial payroll tax savings.
There are two common types of FSAs – a medical expense FSA and a dependent care FSA.
To learn more about these consumer-driven health plans and how they can save your company significant dollars today and well into the future, please contact Paul Squassi at (800)279-1433 or CLICK HERE for our online contact form.
Important Note - Availability of coverage referenced in this document can depend on underwriting qualifications and state regulations. Please note that Resource Group, Inc and its employees are not tax planners nor in the business of providing tax advice or tax counseling. For information regarding tax issues, please consult your tax advisors.
Resource Group is one of New York and New Jersey's fastest-growing insurance brokerage firms. With over 25 years of experience, we provide a full range of insurance, discount products, and related financial services at competitive rates, and coverages that fit your needs.
We offer a free, no-obligation review of your current insurance portfolio. Please contact us for a free quote request.
At Resource Group, it is our goal to stand behind a promise to provide customer service that is second to none. If you have any questions, please don't hesitate to call or email us.