Follow Us:
These days, employers and employees are looking for ways to control rising health care premiums and out-of-pocket expenses. A popular approach is through programs such as Section 125 plans with flexible spending accounts, health savings accounts, and healthcare reimbursement accounts. Barham Benefit Group can help you set up a program best suited to the needs of your company and employees.
Section 125 plans allow employees to deposit a portion of their pre-tax salary into a flexible savings account (FSA) and use those funds to pay for health insurance premiums and out-of-pocket health, dental, vision care, and other qualified expenses, such as prescription co-pays and over-the-counter medications. (In addition, employees can contribute to dependent reimbursement accounts and pay for childcare expenses out of pre-tax dollars.) Section 125 plans are funded via pre-tax deductions from employee paychecks.
Healthcare reimbursement accounts, or HRAs, are similar to FSAs but are funded completely by the employer. The employer can establish how employees can use the funds and can decide how much money to allocate per employee. Employers can use an HRA in conjunction with high-deductible health insurance plans (HDHP) and can fund a portion or all of the policy deductible with an HRA.
A health savings account (HSA) combines a high-deductible health insurance plan with a tax-free savings account. HSA accounts may be funded by the employee, employer, or both. As with FSAs and HRAs, participants in an HSA use the money to pay for qualified medical expenses. However, under an HSA, the employee owns the account and can decide how to spend the funds.