Help Your Employees Meet Medical Expenses with Multiple Plans
Providing the right combination of health insurance, Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) can help your employees cover medical costs and other expenses while enjoying a tax deduction and growth on their HSA funds. This can also satisfy the requirements of the Affordable Care Act.
High-Deductible Medical Insurance and HSAs
You can cover your employees for unexpected and catastrophic medical expenses by beginning with a high-deductible policy, available at a low, fixed expense. By adding an HSA, your employees can budget for more predictable healthcare expenses. Some of the benefits of HSAs:
1.HSAs not only provide a method of saving for medical expenses, but also provides a tax deduction up to $3350 for individual and $6650 for family. Those over age 55 not on Medicare can save an additional $1,000.
2. Medical costs are paid by tax-free dollars.
3. Anyone can contribute to a person’s HSA, including employer, employee, family member, etc. The account holder owns the funds.
4. Amounts saved roll over year after year if not used, and even accumulate interest over time. After age 65, funds can be withdrawn, for any reason, tax-free and penalty-free.
5. HSA dollars can be spent on vision, dental, prescription drugs, and some over-the-counter medical supplies, as well as covered medical expenses like deductibles and maximum out-of-pocket.
HSAs work for people at all levels of health care usage, from those who never get sick and are just buying coverage to satisfy ACA requirements, to those who are heavy utilizers with multiple prescriptions, hospital visits and stays. A cost comparison between HSAs and plans that require a copay shows that HSAs save hundreds of dollars each year for users at all levels. When you include the benefit of HSAs bearing interest, an HSA wins every time.
New Rule For Flexible Spending Accounts Under ACA
FSAs are a great way for your employees to spend pre-tax money on dependent care, including daycare for dependent children and senior citizens, as well as paying for parking and transit expenses. The maximum any worker can contribute is $2,550 per year, with a household limit of $5,000. Before the Affordable Care Act, all funds not used at the end of the year were forfeited. The ACA changed that. Plans can now offer an alternative that makes the FSA even more attractive. Now, the ACA allows for an extension, or in other words, a grace period. This grace period allows individuals to apply unused funds in their FSA to expenses incurred up to March 15th of the following year.
It’s All About Attracting and Keeping Good Employees
The more benefits you offer your employees, the more they’ll want to stay with you, and the more productive they will be. Let us help you find the right combination for your business. Give us a call or contact us