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Health Savings Accounts (H.S.A.'s) -
2009-10-10 2:45pm
Health Savings Account medical plans are a great way to reduce the overall premium cost to your employee benefit plan. The H.S.A. compatible plans work differently than the normal PPO medical plans that most people are accustomed to, but in many cases can actually improve upon your current medical plan. The H.S.A. plans work in two parts:
1) The medical plan itself, and;
2) The actual bank account that each employee can open called a health savings account.
The H.S.A. medical plans work differently than normal PPO medical plans in that under an H.S.A. plan there are no doctor or prescription drug copays. The covered member would have to pay the full (in-network discounted rate) cost of a doctor office visit or for a prescription drug. In fact, the insurance carrier would not pay for any claims until the deductible has been met, but all doctor visit and prescription costs would be applied to their deductible. For most of the plans I recomend, once the deductible is met, the insurance carrier would pay for 100% of their remaining in-network claims for the rest of the calendar year.
Employees can use their H.S.A. money (assuming they contribute to an H.S.A.) to pay for qualified medical expenses such as doctor visits, prescription drugs, in and outpatient procedures and services, etc. The best part is that any money an employee contributes to the H.S.A. is an income tax deduction and the money rolls over from year to year as opposed to a "use it or lose it" account.
In addition, there are many funding strategies we can suggest to lower the overall out of pocket exposure that employees would have with a plan of this type.
Generally speaking the premium rate savings an employer can receive on this type of plan is significant.
Please feel free to comment or ask questions about H.S.A.'s by contacting my office directly or by posting on this thread. |