HSAs and HRAs are relatively new developments in the healthcare landscape, but they have quickly become staples of many employee benefits packages. Our experienced employee benefits planning professionals provide independent, practical advice on how these innovative programs can benefit your business and your employees.
HSAs can help you reduce the cost of your employee health insurance benefits. In an HSA program, you provide a government-approved base health insurance policy with a high deductible for all medical procedures. Each employee then sets up a bank account to which he or she – and/or you, as the employer – can contribute money, which is used on a tax-favored basis to pay for approved unreimbursed medical expenses. Your employees keep whatever money is left over at the end of the year, giving them a strong incentive to spend money only on medically necessary procedures and treatments.
HRAs have become one of the most popular strategies for business owners to save money on employee health insurance. By enrolling in an HRA program, you can purchase a health insurance plan with a very high deductible, significantly reducing premium costs. The money saved can be allotted to your employees on an “as needed” basis to cover unreimbursed medical expenses. Some of your employees will not use up their allotment, and you can keep the remaining funds to reinvest in your business or pay toward other employee benefits costs. Thus, both you and your employees can benefit from an HRA.