HSA, FSA & HRA
Deciding on what plan option to make available to your employees can be confusing. Such as what does a HSA do, how about an FSA or HRA. It takes an experienced employee benefit advisor to explain your options and design a plan that is right for you, your business, and your employees.
With a tax-exempt savings account coupled with a qualified high-deductible health plan, you can cover certain medical expenses. Funds are deposited and not taxed as well as withdrawals which are not taxed.
The benefits of a HSA:
- Money goes in tax-free
- Money comes out tax-free
- Earns interest, tax-free
- HSA balance can be carried over year after year
- HSA balances can be invested
- HSA can be used to add to your retirement funds.
A Flexible Savings Account pay for medical and dental expenses not paid for by insurance, usually deductibles, co-payments, and co-insurance for employee’s health plans. They also cover over-the-counter medications when purchased with a doctor’s prescription. Unlike an HSA, contributions are funded through salary deferrals and you do get tax benefits because FSA’s reduce your taxable wages when funded with pre-tax money.
Benefits of a FSA:
- Covers out-of-pocket medical expenses
- Covers dependent child care expenses
- Covers adoption expenses
If you are health, a FSA might not be worth it since you must spend the designated amount during the year or you will lose it.
Health Reimbursement Programs are employer-funded, tax-advantaged personalized health benefits that reimburse an employee for out-of-pocket medical expenses and individual health insurance premiums.
Benefits of a HRA:
- Reimburses qualified medical expenses not covered by employer plan.
- Fixed amount that can be rolled over each year
- Can be paired with a FSA Account
- Over-the-counter medications
Not sure what plan is right for you, give us a call at Hyland Insurance to discuss your options.