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HSA
A High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA) provides traditional medical coverage and a tax free way to help you build savings for future medical expenses. The HDHP/HSA or HRA gives you greater flexibility and discretion over how you use your health care benefits.
With the exception of preventive care, you must meet the annual deductible before the plan pays benefits. Preventive care services are generally paid as first dollar coverage or after a small deductible, or copayment. A maximum dollar amount (up to $300, for instance) may apply.
When you enroll in an HDHP, the health plan determines if you are eligible for a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA). If you are Medicare enrolled, you are not eligible for an HSA. Each month, the plan automatically credits a portion of the health plan premium into your HSA or HRA, based on your eligibility as of the first day of the month. You can pay your deductible with funds from your HSA or HRA. If you have an HSA, you can also choose to pay your deductible out-of-pocket, allowing your savings account to grow.
- Investment grows tax-free
- Withdraw money without paying tax for qualified medical bills
- Roll-over account balance at the end of the year, even if you change employers
Health Reimbursement Arrangements
HRAs are employer-owned accounts that allow participants to be reimbursed for eligible out-of-pocket expenses, including copays, coinsurance and deductibles. HRAs are typically tied to a Consumer Driven Health Plan, or High Deductible Health Plan, typically creating lower health insurance premiums for employees and employers. Employers will contribute a predetermined dollar amount for each employee into the account and the employee will have a set amount of time in which the funds must be claimed. Typically, the supporting documentation must be the Explanation of Benefit statement that is
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