Consumer Directed Health Plans – HSA’s
Employee Benefits have shifted to a “consumer driven system“.
Consumer directed health plans are designed with substantial upfront deductibles both in and out of network to have the member directly involved in the care decision making process since he or she will be spending their own dollars first.
These High Deductible Health Insurance Plans are being attached to Health Savings Accounts (HSA’s) which are the new wave of medical insurance.
Simply stated these plans require an individual to use his or her own money or money set aside by the employer for the individual’s use to pay for medical expenses up to a fairly high deductible.
There are still some carriers who will offer you some additional savings for accepting a plan requiring referrals.
Additionally, some employers offer Health Reimbursement Arrangements (HRAs), where the employer sets aside funds to reimburse employees for qualified medical expenses, helping to offset high out-of-pocket costs. Individual Coverage Health Reimbursement Arrangements (ICHRAs) are also gaining popularity, allowing employers to reimburse employees for health insurance premiums and medical expenses while giving individuals more flexibility in choosing their plans.
HSA's
To be considered an HSA, the plan must use a high-deductible health plan (HDHP). A HDHP can not offer any benefits before the deductible is met.
The interest bearing account used in this plan is unlike the flexible spending account where there is a use it or lose it provision. The HSA allows the member to roll over the unused deposits year after year. In addition, the monies that are deposited each year can be the maximum allowed even if your high deductible plan has a lower deductible amount.
Because the employee has more responsibility for his or her care the premium costs of these plans are less than most other plans.
Role Changing
In the past, employers have taken a greater role in handling benefits for their employees. Now the shift is towards a defined employee contribution model.
Research indicates that without proper educational tools, employees might not be fully equipped to make informed health care choices.
Employers also need to keep up with changes and learn how they can improve their risk management and internal practices to reduce insurance costs.
At Margolis & Associates, we align our services to fit your needs and support you to make your job easier.
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Navigating Consumer Directed Health Plans and Health Savings Accounts can be challenging, but we’re here to make it easier. Whether you’re an employer looking to reduce healthcare costs or an individual seeking a high-deductible health plan with tax advantages, we can help. Contact us today to explore your options.
Health Reimbursement Arrangements (HRAs) and Individual Coverage Health Reimbursement Arrangements (ICHRAs) offer additional ways to manage healthcare expenses. HRAs allow employers to reimburse employees for qualified medical costs, while ICHRAs provide individuals with more flexibility by enabling employers to contribute toward their health insurance premiums and out-of-pocket expenses. Understanding these options can help you make the best choice for your healthcare needs.