Health care costs continue to increase over the years. With this in mind, many businessmen want to learn more about Health Spending Accounts, or HSA. The HSA is an account that allows employees to receive health benefits that are not taxed. The company also contributes money into the HSA. All money put into these accounts is untaxed.
The Benefits of HSA
An HSA can be used by the employees, spouses and dependents to help cover medical or dental costs. It can also be used alongside health insurance to help cover deductibles and other fees. This proves to be a real added benefit, considering the money is not taxed. It is especially great for those that have medical insurance plans that won’t cover certain things. The HAS can be used to cover most expenses that are not covered by insurance.
How the HSA is Used
Employers can set up an HSA for their employees and they can also add funds to the account as they see fit. Employees may not use all of the money in the account by the end of the year, and the balance can sometimes be carried over to the following year. Claiming funds in the HSA is fairly simple as well. Most of the time, insurance claim forms will have a spot for you to include HSA information.
The Drawbacks of HSA
As with everything, the HSA does have one drawback. Most of the time, when claims are sent through they are done through third party companies. This results in added fees at times. When HSA is used alone, there can be a set up fee charged by the third party company. This may total up to ten percent of the claim. Most of the time, these fees are covered by the company. They are also tax deductible.
Should You Opt for It?
Setting aside the one drawback, HSA seems to be a great way to add additional financial security. Medical expenses are going to continually increase, and with that in mind companies are using them more often.