Information on Health Care Savings Plan Options

Health care savings plan are forms of consumer driven health plans. These are plans that help pay for unreimbursed or qualified medical expenses that are not paid for under your health insurance plan. The purpose of health savings plans is to help consumers pay for their medical expenses on a tax favorable basis. There are different types of health savings plans that are available to consumers, based on the size of the employer. The types of health savings plans available are flexible savings accounts (FSAs), medical savings accounts (MSAs), health reimbursement account (HRAs) and health savings plans (HSAs).

FSAs are sponsored by large employers and offer employees a chance to contribute an amount up to an established limit to meet any qualified medical expenses. Any contribution made to an FSA must be used in the year in which it is made otherwise it is subject to forfeiture. Medical savings accounts or MSAs are for smaller employers of less than 50. The plan permits employee contributions of up to 65 percent of the deductible amount for individuals and 75 percent for families. Employers must contribute in behalf of any employee who participates in the plan or face a penalty of 35 percent of the plans total contributions.

HRAs are IRS type accounts, as are HSAs that permit the employee to contribute earnings in order to meet their qualified medical expenses. HRAs are subject to COBRA requirements for employees who leave the plan and an HSA is associated with a High Deductible Health Plan or HDHP, which has a deductible of $1,150 for individuals and $2,300 for families.


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