Health Reimbursement Arrangements
HRAs can be coupled with any type of PPO or HDHP plan. These accounts are owned by the employer and employees can use them to pay for out of pocket healthcare expenses. The employer has control of the funds and employees do not take them with them if they leave employment. Here are the steps to set up and HRA.
Choose a health plan
Determine the amount of money you want to contribute for an employee’s HRA
Determine what employees can use the money for (deductible only, copays, prescription drugs)
ASA can work with you to determine the right structure of an HRA based on your needs.
Flexible Spending Accounts
FSAs are special accounts you put money into that you use to pay for certain out-of-pocket health care costs. You don't pay taxes on this money. This means you'll save an amount equal to the taxes you would have paid on the money you set aside. Employees determine what they think their healthcare expenses will be for the year and determine how much they want to contribute into the FSA. That money is payroll deducted each pay period throughout the year and they can use those funds for healthcare expenses. However, if an employee does not use those funds by the end of the year, they lose whatever is left. So it is important to budget appropriately. There are limits to what you can contribute to an FSA each year.