FSA Administration Company, Clarity Benefit Solutions, Offers Tips for Helping Employers Choose Between HSA and FSA Plans
NEW YORK, Nov. 19, 2018 /PRNewswire/ -- FSA administration company, Clarity Benefit Solutions, offers tips for helping employers choose between HSA and FSA plans.
Health Savings Accounts (HSAs) and Flexible Spending Accounts (HSAs) are plans that employers offer their employees to pay for a multitude of healthcare costs. They are similar in nature; therefore, employers may find it challenging to select which plan to offer their employees. The following tips can help make the plan selection process easier.
Emphasize to employers that employees who have health plans can utilize an FSA to pay for co-pays, deductibles, certain drugs, and additional healthcare costs. These monies are not pre-taxed, so employees pay lower taxes since they are not paying tax on any funds they have earmarked for the FSA. Employers set up FSAs—and own the FSAs—with employees contributing a portion of their paycheck to pay for the expenses they qualify for. If an employee changes jobs, the employee cannot take the FSA along to the new job.
Then, explain to employers that an HSA also allows employees to contribute pre-tax monies through payroll deductions to pay for health expenses such as deductibles, co-pays, prescription drugs, and vision and dental expenses. HSAs have many benefits. If employees change jobs the HSAs are transferable. And, contributions are tax-deductible, and any interest earned is also tax-free. Additionally, these funds are accessible to the employee as soon as money is placed into the account. Unused funds roll over from year to year.
Employers should research employees to determine their general health and spending habits before deciding which plan to offer employees. They should also survey their employees to see which account they prefer. Employees who keep meticulous records on every dollar they spend on healthcare-related expenses would be a good fit for an FSA. Combined with a medical plan with a low deductible so they have faster access to insurance benefits, an FSA is beneficial. Employees who have an HSA are usually in good health. They may choose a High Deductible Health Plan (HDHP) while paying close attention to their preventive care so they can consider how they are using their healthcare funds. These employees must also think carefully about their future healthcare spending since HSA funds rollover to the following year.
About Clarity Benefit Solutions: Clarity Benefit Solutions provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.