Benefits Network — Your HSA and HRA Experts

Healthcare costs continue to rise at alarming levels. At Benefits Network, we stay at the forefront of new products and services that can save our clients money. Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs) are two relatively new approaches that have the potential to reduce costs for employers that are rapidly gaining in popularity.

Health Savings Accounts – HSAs are a new approach to reducing premiums while providing a tax-free investment for employees. They combine high deductible health insurance with a tax-favored savings account. A savings account is established for each employee. Money deposited in the savings account is used to pay the deductible and a variety of other medical related out-of-pocket expenses. Money left in the savings account earns interest or can be invested like an IRA and is the employee’s to keep.

To be eligible, a qualified “high-deductible health insurance policy” must be partnered with an HSA. These plans are available through various insurance companies. The plan designs are defined under Federal law and have deductibles between $1,150 and $5,800 for singles, and between $2,300 and $11,600 for families. Because of the high deductibles, the premiums are much more affordable, which makes dollars available to fund the savings accounts. HSA accounts can be funded by the enrollee, the employer, or both. Each year, HSAs allow individuals to legally avoid federal income tax by saving 100% of the health plan's deductible, up to $3,000 for singles or $5,950 for families, into an HSA account. Older Americans can save even more!

Health Reimbursement Accounts – HRAs provide employers with another opportunity to reduce premiums. Employers select a high deductible health plan and then fund a portion of each employee’s deductible. Most often the premium dollars saved are much greater than the deductible amount funded, resulting in a net savings. Reimbursement of the deductible amounts is handled by a third party administrator to assure HIPAA compliance and a smooth process. Done correctly, funds are requested by the administrator as needed, and dollars not spent to fund deductibles represent savings to the employer.