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Jan 24, 2010

health Coverage

owner

Does anyone use an HSA or HRA and how is working for them?

3 responses

  • Jan 25, 2010

    Julie Rains

    I can speak from the perspectives of a self-employed person with HSA and family with employer-paid health coverage. The HSA and HRA can provide tax benefits, and funds saved but not spent in one year can be carried over to future years, giving these type of accounts an advantage over the FSA.

    The higher deductibles do make health care expenses more visible, which can control costs; but some health care services are more critical than others so you can't always lower costs just because you are more aware of the expenses.

  • Jan 25, 2010

    Vice President

    My husband and I have a small business that is 25 years old. We have always provided health insurance for our employees (6 besides ourselves) and paid 100% of the premiums. We transitioned to an HSA model a couple of years ago to keep costs down and contribute $100 or $200 each month (single/family) to our employees' HSA accounts to cover their deductibles. This has allowed us to keep insurance costs lower....of course, everything is relative since health insurance is so exorbitant all around, no matter what type of policy model you use!!

    Our insurer is BC/BS CareFirst but the HSA bank is First American Bank in Illinois and we do the account management online (our business is located in Maryland). We've found this bank to be customer-oriented and they offer an interest-bearing HSA account for those employees who accumulate a healthy amount and want their money earning interest.

    Good luck!!

  • 7 days ago

    President

    As a former HR Manager and VP for 18 years I can say both are excellent ways to deal with rising HC costs. The HSA provides the benefit to the person of acting not only as a vehicle to pay for out of pocket expenses it is also a tax free/deferred savings vehicle where you can accumulate money over time. You can also over fund it maximizing the savings benefit. It must be used in conjunction witha High Deductible Plan. These could become as big as 401(k)'s as investment options and favorable tax treatment expand.

    An HRA may be a good way to begin because if your business is going to contribute part of the funds it does not have to put any money up front it is a "Promise to Pay" you only pay once the expense is incurred. Also you can decide how much if any to allow to be rolled over and if your ees leave they dont take this with them.