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How
does EEHP Work?
EEHP provides employers with access to carriers offering qualified
high deductible health plans along with administrative services
for Health Reimbursement Arrangements, Health Savings Accounts
and Flexible Spending Accounts with the ability to access
all accounts through a single debit card. By doing so, EEHP
is able to offer employers complete turnkey access to a consumer
driven health care plan(s) tailored specifically to their
needs and the needs of their employees.
Health
Reimbursement Arrangements
Health Reimbursement Arrangements (HRA) are established
and funded by an employer to reimburse employees for out-of-pocket
medical expenses. HRAs are typically combined with a high
deductible health insurance plan and used by employers to
help fund some or all of the deductible for their employees.
HRAs can be used with any type of health plan or without a
health plan. Our experience has been that employers typically
combine HRAs with a high deductible health plan (minimum of
$2,000 for employee only coverage). Typically the greatest
premiums savings are experienced at these higher deductible
levels.
For example,
let's say an employer currently pays $300 per month for a
traditional health plan for a single employee, with a $250
deductible and 80% coverage in-network after the deductible
has been met. By switching to a plan with a $2,000 deductible
the monthly premium may drop to $150. The employer can then
fund $1,750 of the deductible into an HRA and cover the majority
of the deductible exposure for the employee for less money
than the current plan.
HRA funds
are owned and controlled by an employer. Only the employer
can fund the HRA account. The employer determines the amount
of funding, what the funds can be used for and whether or
not funds rollover from year-to-year. If an employee leaves
to go to work with another employer, the funds stay with the
employer (i.e. they are not portable). Employers can setup
vesting schedules that give employees rights to balances leftover
in their HRA after meeting the time frame provided within
the vesting schedule. Thus, it is possible to use the HRA
as a retention tool with employees.<back
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What
happens at the end of the year?
Any unused money remaining in the HRA at the end of the year
can be rolled over at the employer's discretion and used to
reduce costs in future years. This rollover feature allows
employers to take control over their health plan cost and
stabilize overall costs in the future. As funds become available
to rollover from year-to-year, employers can reduce overall
funding into the HRA, increase the deductible further to reduce
premiums, or open up the use of the HRA to allow employees
to use HRA funds for elective procedures (i.e. lasik eye surgery,
braces for children, cosmetic surgery procedures, etc.). <back
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Health
Savings Account
Health
Savings Accounts (HSA) are individual IRA-like accounts
that provide employees with the ability to put money away
pre-tax and use the money pre-tax to pay for qualified medical
expenses. An employer, employee or other individual can make
contributions to an HSA account. HSAs are owned by an individual,
not the employer. Use of the funds is controlled entirely
by the individual. Funds leftover at year-end are available
to rollover at the employee's/individual's discretion. Funds
in the account grow tax-free unless used for qualified medical
expenses or pulled out for other reasons. Use of funds for
non-qualified medical expenses is subject to normal income
taxes and a 10% penalty if the individual is below 65-years
old.
EEHP will
provide to you access to your HSA account through our customized
web portal. When you logon to the site, you will be able to
manage your investments, track your utilization, and update
all information. Click
Here, to take a tour of our participant website.
An HSA
can only be used with a qualified high deductible health plan.
With these plans there are minimum deductible requirements
of $1,000 for single coverage and $2,000 for family coverage.
There are also caps on contributions to an HSA in a given
year. The cap is the lower of the plan deductible or $2,650
for single coverage and the deductible or $5,250 for family
coverage.
Balances
in an HSA grow tax-free and can be used in future years for
elective procedures (i.e. lasik eye surgery, braces for children,
cosmetic surgery, etc.). If used for qualified medical expenses,
the funds are not subject to taxes. This is true while actively
employed as well as at retirement. <back
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Flexible
Spending Accounts
Flexible Spending Accounts (FSA) still have a place
in an employee benefit plan. FSAs can be used with an HRA
when the HRA only provides funding for a portion of the deductible
of a health plan and covers only a portion of the out-of-pocket
cost of their employees. For example, assume a health plan
has a deductible of $2,000 and the employer agrees to fund
$1,750 of the deductible. This leaves an exposure of $250
that the employee must pay out of pocket. In order to gain
tax savings when paying this out of pocket expense, an employee
might still want to use an FSA to cover the $250 expenditures.
An FSA can also be used in limited situations along side of
an HSA.
Dependent
Care FSAs are also a valuable product for employees needing
to pay for childcare services. The tax-savings from using
a dependent care FSA provide savings to an employer and an
increase net income to the employee. Through its administrative
partner, Care 125, EEHP is able to offer administrative services
for Dependent Care FSAs that allow for direct payment to the
day care provider. This eliminates the need for employees
to write checks to pay their day care provider and wait for
reimbursement from the FSA administrator. More money, better
cash flow, ease of use for employees and no minimum participation.
<back
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Transportation
Management Account
A Transportation Management Account (TMA) can be used
to help employees offset the cost of parking and tolls, using
pre-tax dollars. As with the other products offered by EEHP,
this account is administered by Care 125 and can be accessed
through a single debit card (i.e. the same card can be used
for an HSA, HRA, or FSA). This makes overall administration
of multiple accounts easy for the employee and keeps them
from having to track multiple debit cards. <back
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