The Health Savings Account (HSA)

The HSA is an account used to pay for routine medical care, including prescriptions. The HSA is funded by the employees pre-tax contributions and can also include employer contributions. Like the HRA, the HSA plan includes a Traditional Health Coverage (PPO) component to protect against large expenses.

How the HSA plan works:

First, pay for routine care from your HSA. Employees use available dollars in their account to pay 100% of the cost for routine medical care, like office visits, tests and prescriptions.

Use the plans Traditional Health Coverage when you need it. The Traditional Health Coverage (PPO, POS, etc.) part of the plan pays a percentage of covered expenses after the employee satisfies a specified out of - pocket expense. They will receive the highest level of coverage if they use doctors and hospitals that are in their health plans network. If they reach the plans annual out - of - pocket limit, all remaining covered expenses for the year are fully covered.

Enjoy tax savings. The dollars employees contribute to their HSA are pre - tax dollars, so they lower their taxes while paying for covered medical services.

Save dollars that arent used this year and use them to help reduce out of - pocket expenses that might occur in future years even in retirement.

Investment growth. Employees can grow their available health care dollars by investing in HSA funds.

Take it with you. The money is the employees They can take their unused balances when they retire or leave their current employer.

Learn about:
The Health Reimbursement Account (HRA)
The Flexible Spending Account (FSA)
The Section 125 Plan