Health Savings Accounts
Health Savings Accounts (HSAs) are similar to flexible spending accounts (FSAs) in that they are special tax-advantaged accounts that can be used to pay for medical expenses. Employers deduct a certain amount of money each paycheck, before taxes, and put that money into the HSA. This results in a lowered taxable income for the employee and money they can apply to medical expenses. Funds in an HSA can only be used to pay for medical expenses, including dental and vision expenses. However, unlike the FSA, HSAs retain their balances at the end of the year, and can be carried over into the following year. In addition, only employees with high-deductible health insurance plans are qualified to take advantage of HSAs.
Health Reimbursement Accounts
Health Reimbursement Arrangements (HRAs) are a type of health insurance plan that reimburses employees for qualified medical expenses. Also referred to as defined contribution plans, personal care accounts, health savings accounts, or health care accounts, HRAs are employer-funded arrangements open to employees of companies of all sizes. HRAs can be used to reimburse any or all of the same expenses as flexible spending accounts (FSAs). While HRAs are funded by the employer with tax-deductible dollars, reimbursements of qualified medical expenses are received by the employee tax-free. Unlike traditional flexible spending accounts, unused funds can be carried forward from year to year.
Flexible Spending Accounts
A Flexible Spending Account (FSA) is special tax-advantaged account that can be used to pay for medical expenses. Employers deduct a certain amount of money each paycheck, before taxes, and put that money into the FSA. This results in a lowered taxable income for the employee and money they can apply to medical expenses. Funds in an FSA can only be used to pay for medical expenses, including dental and vision expenses. It also includes co-pays, deductibles and over-the-counter medications. With an FSA, unused balances are forfeited by the employee at the end of the year.
COBRA Services
COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage is a continuation of existing job-based health benefits plans. It basically allows employees and their covered dependents to temporarily continue their existing coverage following termination from employment or other events which separate them from their plans.
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