Several options exist for employers to provide accounts that employees can use to pay for health care expenses not otherwise covered by a health plan; the options vary as to tax treatment, who can contribute, and what expenses can be covered.

There are three types of health spending accounts that can be used to help fund employee health care expenses: flexible spending accounts, health savings accounts (aka, health spending accounts), and health reimbursement arrangements. A description of each type of health spending accounts follow. (more…)

In this era of very complex (and very expensive) health care plans, a new one has emerged to help Americans get better care at a better value. This new type of plan is the Health Savings Account, otherwise known as an HSA.

So what exactly are HSAs?

Established by the Medicare reform bill and signed into law in December 2003, HSA insurance plans enable Americans to pay for near-term medical expenses while saving for future long-term costs with tax-free dollars. These accounts come with an HSA-qualified insurance policy that covers major medical expenses and preventive care. Where they differ from traditional health insurance policies is that these HSA-qualified insurance plans have lower premiums, higher deductibles, and the savings from the lower premiums goes to funding the HSA. Read the rest of this entry »