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Financial Arrangements

Three types of financial arrangements can be coupled with a High-Deductible Health Plan (HDHP) - a Health Savings Account (HSA), Health Reimbursement Arrangement (HRA) or Flexible Spending Account (FSA).

Pre-tax and tax-deductible dollars contributed to these arrangements can be used for IRS-approved qualified medical expenses such as copays, deductibles, coinsurance and prescriptions. HSAs even allow plan members to pay for vision care, long-term care insurance premiums, COBRA premiums and more.

Each type of financial arrangement is unique in its design, administration and use. Adding a financial arrangement helps employees pay for the health care services they need with tax-advantaged funds. Be sure to weigh the benefits of each before choosing one.

Here are a few things to keep in mind about each:

HSA

  • You and/or your employees may contribute to the account.
  • Your employee owns these funds and can take them from job to job.
  • These funds roll over annually and earn tax-free interest.

FSA

  • Employees contribute funds through pre-tax payroll deductions.
  • Any HDHP or PPO plan can accompany this financial arrangement
  • Funds don't rollover and are not portable.

HRA

  • Employers own these arrangements, and only employers can contribute to them.
  • You set the opening balance and what expenses are reimbursable.
  • You maintain available assets to cover potential expenses.

Contact your broker or BlueCross account executive to learn more about HSAs, HRAs and FSAs.

 

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