Understanding health benefits can be challenging for many small businesses, but employee benefit plan administration assistance remains available to help companies manage their healthcare costs. Consultants can provide resources to help healthcare administrators understand employees' healthcare options such as Health Savings Accounts (HSAs).
Employee-owned HSAs became available in 2003 as part of the Medicare Prescription Drug, Improvement, and Modernization Act that allowed individuals to create HSAs to pay for qualifying current and future medical expenses. Employers can make pre-tax contributions in amounts equal to established limits. HSA participants can defer taxes on any money they contribute to cover out-of-pocket medical expenses.
Employees under the age of 65 receiving coverage from certain high-deductible health plans (HDHPs) are eligilble to participate in HSAs. Effective HSA management remains important to managers and employees as HSA funds are fully vested and can be carried over year to year. Some have mistaken HSAs as flexible spending accounts, but flexible spending funds must be used by the end of the year or the assets become the property of the employer.
Employee benefit consultants can provide insight into HSAs, flexible spending accounts and other healthcare options for businesses.
