Consumer-Directed Plans: HSAs & HRAs
There are a number of truly market-driven and consumer directed plan designs, thanks to the Pension Protection Act (2003). One way EmSpring helps companies take advantage of the PPA is through consumer directed plans like Health Savings Accounts (HSA) and Health Reimbursement Arrangements (HRA). We have the knowledge and experience to help our clients take full advantage of these innovative programs.
Health Reimbursement Arrangements (HRAs)
HRAs are employer-sponsored accounts used to reimburse employees for eligible medical expenses. Generally, employers offer Health Reimbursement Arrangements in conjunction with a high-deductible health insurance policy. To cover all or part of the deductible, the employer then establishes and contributes to a tax-advantaged HRA for employees. The account does not need to be pre-funded and unused funds may be allowed to roll over year-to-year. Employees use the allocated tax-free dollars in the HRA to pay for healthcare expenses not covered under the high-deductible plan. Note: only the employer can contribute to an account; employees cannot participate in the contribution.
- HRAs are available to all business sizes
- HRAs can be used to pay for individual medical policies
- Complete flexibility with employee retirement or termination
- Unspent funds can rollover year to year, as decided by the employer
- Employees are allowed to receive reimbursements tax-free
Health Savings Accounts (HSAs)
With HSAs, companies can capture substantial premium savings without sacrificing the integrity of their health plans. Either an eligible individual, or an employer on behalf of an eligible employee, establishes the HSA. Employees use HSAs to pay for qualifying medical expenses. HSAs combine a savings account with a high-deductible health insurance plan, offering lower health insurance premiums with various tax advantages. Thanks to the Medicare Prescription Drug & Modernization Act, anyone covered under a high deductible health plan (HDHP) has these accounts available to them.
- Easy participation
- Lower premiums
- Tax-favored contributions
- Tax-free distributions
- Funds rollover & accrual
EmSpring understands high deductible options, HRAs and HSAs. To discover if a consumer-directed model using these options is right for your Pacific Northwest company, give us a call!