What is an HSA/HRA/FSA
What is an HSA?
A Health Savings Account (HSA) is a tax-advantage account that offers triple tax benefits empowering you to prepare for and manage healthcare costs. As a compliment to your retirement plan, HSA’s help you prepare for the $285,000 or more you will need for retirement medical expenses. HSA’s can also be used to pay tax-free today for qualified medical expenses – from doctors’ visits, prescriptions, deductibles, as well as dental and vision expenses.
Who is Eligible to have an HSA?
In order to qualify for an HSA, you must be an adult who meets the following qualifications:
• Have coverage under an HSA-qualified, high deductible health plan (HDHP)
• Have no other health insurance plan (this exclusion does not apply to certain other types of insurance, such as dental, vision, disability or long-term care coverage)
• Not enrolled in Medicare
Why have an HSA?
An HSA can provide a savings buffer for unexpected or high medical bills. In most cases, you can lower your monthly premiums when you switch to health insurance coverage with a higher deductible, and these HDHPs can be paired with an HSA.
You can use your HSA to pay for current medical bills, including your deductible and expenses your insurance may not cover. Or you can save your funds for future medical expenses. A list of expenses are provided by irs.gov refer to Publication 502, visit irs.gov or consult a tax professional.
A Health Savings Account (HSA) is a tax-advantage account that offers triple tax benefits empowering you to prepare for and manage healthcare costs. As a compliment to your retirement plan, HSA’s help you prepare for the $285,000 or more you will need for retirement medical expenses. HSA’s can also be used to pay tax-free today for qualified medical expenses – from doctors’ visits, prescriptions, deductibles, as well as dental and vision expenses.
Who is Eligible to have an HSA?
In order to qualify for an HSA, you must be an adult who meets the following qualifications:
• Have coverage under an HSA-qualified, high deductible health plan (HDHP)
• Have no other health insurance plan (this exclusion does not apply to certain other types of insurance, such as dental, vision, disability or long-term care coverage)
• Not enrolled in Medicare
Why have an HSA?
An HSA can provide a savings buffer for unexpected or high medical bills. In most cases, you can lower your monthly premiums when you switch to health insurance coverage with a higher deductible, and these HDHPs can be paired with an HSA.
You can use your HSA to pay for current medical bills, including your deductible and expenses your insurance may not cover. Or you can save your funds for future medical expenses. A list of expenses are provided by irs.gov refer to Publication 502, visit irs.gov or consult a tax professional.
What is an HRA?
Health Reimbursements Arrangements (HRAs) are employer-funded plans that provide tax-free reimbursements to employees for out-of-pocket medical expenses and, in some instances, tax-free reimbursements for insurance plans that employees obtain on their own.
Who is Eligible for an HRA?
Both current and former employees and their covered dependents are eligible to participate in the HRA, as long as they are not considered to be self-employed. That means that generally the owners of the company cannot participate.
Why consider an HRA?
Only employer contributions are allowed in the HRA. Employees are not allowed to fund the HRA either directly or indirectly. It is important to note that HRA funds are simply allocated by the employer. The employer does not pay out any of the allocated funds until claims are incurred.
With that said, the HRA allows the employer to offer a cost-savings high deductible healthcare plan for a lower premium, and provide funds to the employee tax free to cover claims.
Health Reimbursements Arrangements (HRAs) are employer-funded plans that provide tax-free reimbursements to employees for out-of-pocket medical expenses and, in some instances, tax-free reimbursements for insurance plans that employees obtain on their own.
Who is Eligible for an HRA?
Both current and former employees and their covered dependents are eligible to participate in the HRA, as long as they are not considered to be self-employed. That means that generally the owners of the company cannot participate.
Why consider an HRA?
Only employer contributions are allowed in the HRA. Employees are not allowed to fund the HRA either directly or indirectly. It is important to note that HRA funds are simply allocated by the employer. The employer does not pay out any of the allocated funds until claims are incurred.
With that said, the HRA allows the employer to offer a cost-savings high deductible healthcare plan for a lower premium, and provide funds to the employee tax free to cover claims.
What is an FSA?
An FSA (Flexible Spending Account) is one way you can reduce your taxes and make your healthcare more affordable. FSAs are designed to pay for certain out-of-pocket healthcare costs and the plans prevent unwelcome shocks and cut the risk of having to pay out large amounts for copayments, deductibles and drugs.
Who is Eligible for an FSA?
An FSA helps employees cover health-related costs not included in their insurance plans. Contributing to an FSA reduces taxable wages since the account is funded with pretax dollars. You may be able to use the FSA to help pay for a gym membership or massage therapy, with a doctor's prescription.
Why consider an FSA?
Employees contribute to their FSAs through payroll deductions, so the money is taken out before taxes. This can reduce company payroll taxes
An FSA can give employers flexibility in designing the plans as long as they are compliant with federal laws and regulations regarding contributions, reimbursements, claims substantiation and other administration issues.
To better understand how these accounts can benefit your business, call to schedule a consult today!
An FSA (Flexible Spending Account) is one way you can reduce your taxes and make your healthcare more affordable. FSAs are designed to pay for certain out-of-pocket healthcare costs and the plans prevent unwelcome shocks and cut the risk of having to pay out large amounts for copayments, deductibles and drugs.
Who is Eligible for an FSA?
An FSA helps employees cover health-related costs not included in their insurance plans. Contributing to an FSA reduces taxable wages since the account is funded with pretax dollars. You may be able to use the FSA to help pay for a gym membership or massage therapy, with a doctor's prescription.
Why consider an FSA?
Employees contribute to their FSAs through payroll deductions, so the money is taken out before taxes. This can reduce company payroll taxes
An FSA can give employers flexibility in designing the plans as long as they are compliant with federal laws and regulations regarding contributions, reimbursements, claims substantiation and other administration issues.
To better understand how these accounts can benefit your business, call to schedule a consult today!
