Use Reimbursement Accounts to Maximize Employee Health Benefits
More employers recognize reimbursement accounts as a strategic component of their employee benefit programs.
Employee health benefit plans play a crucial role in attracting and retaining top talent while fostering a healthy and productive workforce. More employers recognize reimbursement accounts as a strategic component of their employee benefit programs. These accounts not only empower employees to take control of their health and well-being expenses but also contribute to overall job satisfaction. There is a spectrum of reimbursement account solutions, so employers should consider what best meets the needs of their population. Let’s explore some of the different types of reimbursement accounts and how they support an employee health benefit plan.
Health Savings Account (HSA)
Health Savings Accounts are tax-advantaged accounts that individuals can use to save for qualified medical expenses. To be eligible for an HSA, employees must be enrolled in a high-deductible health plan (HDHP). Contributions to HSAs are tax-deductible, and the funds can be invested and grow tax-free. Employees can withdraw the money tax-free when used for eligible medical expenses, making HSAs a powerful tool for managing health care costs.
Flexible Spending Account (FSA)
Flexible Spending Accounts allow employees to set aside a portion of their pre-tax salary to cover qualified medical or other qualifying expenses. Beyond medical expenses, FSAs can serve a variety of employee needs including dependent care, transportation, adoption and more. Unlike an HSA, an FSA has a “use it or lose it” rule, meaning any unused funds at the end of the plan year may be forfeited.
Health Reimbursement Arrangement (HRA)
An HRA is an employer-funded account that reimburses employees for qualified medical expenses. Employers have flexibility in designing HRAs, including what expenses are covered and how funds are distributed. Unlike HSAs and FSAs, HRAs are solely funded by the employer.
While medical expenses are often top of mind when considering employee benefits, certain reimbursement accounts offer a unique benefit: stress reduction and improved mental health. By empowering employees to take control of their health and finances, these accounts contribute to a more positive and holistic well-being. Reimbursement accounts ultimately empower employees to take charge of their health and finances. By providing them with the resources and flexibility to manage their expenses, these accounts contribute to a more positive and productive work environment. As organizations continue to recognize the importance of a holistic approach to employee well-being, the strategic implementation of reimbursement accounts will likely play an increasingly pivotal role in shaping comprehensive and competitive employee health benefit packages. Need help finding the right fit for your employees? Learn more about our customized reimbursement offerings.