Keep your health plans from bankrupting the company.

by Michael on September 3, 2008

in Health insurance,HSA Health Savings Accounts,Insurance Newswatch,Prescriptions

If you own a company¹ and provide health care coverage for your employees, how can you choose good coverage, and yet not send your company to the poorhouse?

Have you ever considered a Health Savings Account-qualified plan?  In recent years, many companies have moved to HSA’s to save money. This is a good thing, but what are they?

An HSA-qualified health plan is a high-deductible health insurance plan that is “married” to a bank account called a Health Savings Account.  HSAs are owned, and funded by either the employer or the employee, but are always owned by the employee even if the employee changes employers.  They provide tax savings for the employer and the employee. Sounds like a great arrangement, yes?

It is!  Yet, there is kind of a drawback to them – sometimes employees fail to learn enough about how their HSA works to make good decisions when implementing them.  They neglect funding their HSA and then, when they incur medical expenses, they have this (affordable) insurance plan with a high deductible, but no “savings” to pay their share of cost.   Like any tool, if not used right, it won’t get the job done.

Please Note:  HSA’s should not be confused with Cafeteria Plans (Section 125 or “Flexible Spending Account” Plans) where the employer controls the account.  With these plans, an employee signs up for payroll deduction (limits set by the employer) and then has total access to annual funds for expenses at the beginning of the year. The employer advances any monies needed, but also keeps any monies not spent. These plans also have good use (and can be designed to offer child care, etc). They do not continue with an employee after termination.

If you are the employer, the course of wisdom is: when you provide an HSA-qualified medical insurance, ALSO make arrangements to educate your employees on how to fund the savings account necessary to make the program work.

I highly recommend for you and your employees the following:

  1. An HSA-qualified, high deductible, affordable, quality health insurance plan.
  2. A Health Savings Account that is funded regularly will provide outstanding protection for the employee.
  3. Thorough education on how these can be successfully implemented.
  4. And, additionally, adding another “layer” of voluntary coverage, benefits that cannot be matched by any other system I know of…

…all with tax savings and affordability for both the employer and employee.

Let me explain it more thoroughly.

Email me or phone me and I will explain how this concept can work for your company.

I will save you money. And just as important to you, I will educate your employees.

Michael Myers
CA License 0561502

¹ Or if you are the Human Resources Manager in charge of implementing health care plans.

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