A Flexible Spending Account (FSA) is a tax-advantage financial account that is set up by the employer. An FSA allows an employee to set aside a portion of earnings to pay for qualified medical, dental and vision expenses for both the employee and their dependents. Money deducted from employees' paychecks is not subject to taxes, resulting in substantial tax savings.
With an FSA, Businesses Receive
FICA tax savings for FSA
Seamless automated payroll deductions
Daily claims processing and distribution of spending account payments
Web access to FSA plan participant information
Expert handling of complex FSA issues and requirements
A Health Reimbursement Account (HRA) is a federally authorized tax-favored funding program that creates a long-term solution for employers to save money on healthcare costs. Employers use the savings from lower premiums to reimburse employees for part of their healthcare expenses, typically a portion of their deductible.
With an HRA, Businesses Can
Significantly reduce health insurance premiums
Create tax deductions
Improve cash flow
Meet employee coverage needs
Achieve company benefit goals
High-deductible health plans (HDHP) typically offer lower monthly premiums than traditional health plans. With an HSA-qualified HDHP, the employee can take the money saved on premiums and invest in the HSA. Although the employee is responsible for the initial healthcare costs until the deductible is met, money saved on premiums is ready and waiting to pay for qualified medical expenses. In addition, HDHPs generally provide 100% coverage for preventive care services, such as routine doctors visits and annual physicals.