Our last post introduced the High Deductible Health Plan (HDHP) and how instituting this plan can ultimately lead to reduced insurance usage, and lower premiums. Coupled with an HSA (Health Savings Account) the HDHP can have an ever greater impact on your bottom line.

What is an HSA?

An HSA, or Health Savings Account, is medical savings account wherein the funds contributed to the account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year over year if not spent. HSAs are owned by the individual.  The amounts put into an HSA are not only federally taxed exempt (HSA’s in California are NOT tax exempt), but employees are also able to take the money with them when they leave their current employer.

This all may sound a bit complicated, but its not as bad as it seems. The point is that there is a world of options beyond the traditional HMO and PPO plans that most employers offer. If you are looking to reduce your benefit costs, consider alternative options and you will be sure to benefit. Contact CPEhr if you would like to investigate further.

(Contributed by Harry Ogan, CPEhr Benefits Specialist)