Are you feeling overwhelmed with your employee benefit options as open enrollment approaches? It's common to have questions like:
- Am I making the most of all available benefit options?
- What are tax-advantaged benefit accounts, and how can they help me?
Don’t worry! We’re here to help simplify the process.
What are Tax-Advantaged Benefit Accounts?
Tax-advantaged benefit accounts come in various forms, all geared towards helping you gain more control over your finances while saving on out-of-pocket healthcare costs. Here are some of the main categories.
Flexible Spending Account (FSA): This account allows you to set aside pre-tax dollars for healthcare expenses not covered by your health insurance plan. Both the employee and the employer can contribute to the account, but the funds must be used within the plan year.
Health Savings Account (HSA): An HSA allocates pre-tax dollars for current and future healthcare expenses. The option to contribute is provided to you and occasionally your employer. Unlike the FSA, this account belongs to you, meaning the tax-free funds roll over from year to year, even if you leave your employer.
Health Reimbursement Arrangement (HRA): This is an employer-funded account intended for specific healthcare expenses only your employer can contribute to.
What are the Benefits?
- Save Money: The biggest advantage of these types of accounts is the savings. Enrolling in a tax-advantaged benefit account allows you to set aside money before taxes, reducing your taxable income and allowing you to keep a larger portion of your earnings.
- Stay on top of your health: These accounts enable you to set aside funds for preventive, routine, and unexpected healthcare needs—for both you and your family—making it easier to prioritize health and wellness.
- Plan for the future: With rising healthcare costs, these accounts help you manage and prepare for both expected and unexpected out-of-pocket healthcare expenses.
Why Should You Enroll?
Enrolling in a tax-advantaged benefit account is a smart financial move, offering savings, financial security, and flexibility to help you manage your healthcare expenses more efficiently. It's a valuable tool for anyone looking to make the most of their employee benefits and secure their financial future! If you're a broker or employer looking for consumer-driven health plan administration like FSA, HRAs, or HSAs, check out our CDHP solutions for more info or contact us.