The shift to consumer-directed health care plans has always been about empowering health care consumers to select more cost-effective, appropriate care. It is increasingly more about encouraging people to become more accountable, knowledgeable and engaged about their health care.
CGB Benefits provides a variety of services and education to help employers implement consumer-directed health care plans successfully.
High-Deductible Health Plans
With high-deductible health plans (HDHPs), companies can capture substantial premium savings without sacrificing the integrity of their health plans. Our innovative approach sets aside savings to offset employee expenses which, when incurred, are paid directly to providers.
There are several important things to know about HDHPs, however, before electing for Health Reimbursement Arrangements and Health Savings Accounts. Fortunately, CBG Benefits has the knowledge and experience to help our customers figure it all out.
Health Reimbursement Arrangements (HRA)
An HRA is an account in which employers deposit pre-tax dollars for each of their covered employees. Employees can then use this account as reimbursement for qualified health care expenses.
If there are funds left over in the account at the end of the plan year, they may be carried over into the next year, depending on your plan.
Advantages of HRAs
- HRAs are available to all business sizes
- Complete flexibility with employee retirement or termination
- Unspent funds can rollover year to year, as decided by the employer
- Employees are allowed to receive reimbursements tax-frees
Health Savings Accounts (HSA)
An HSA is a medical savings account that can consist of both employer and employee contributions, and is used to pay for eligible medical expenses. Contributions are taken directly from your paycheck, before taxes, and placed in an account. After age 65, you can use your funds for non-health-related expenses without facing a penalty; however, any HSA withdrawals for non-medical expenses are subject to income taxes.
Unlike an HRA, leftover funds can be rolled over from year to year, and the account stays with you regardless of whether you change employers. An HSA must be used with a qualified high-deductible health plan (HDHP) that covers catastrophic health care expenses after the deductible.
Advantages of HSAs
- Participating is easy
- Lower premiums
- Tax-favored contributions
- Tax-free distributions
- Funds rollover & accrual