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(April 24, 2018)
NEW YORK, April 24, 2018 /PRNewswire-iReach/ -- FSA administrators, Clarity Benefit Solutions, discusses FSAs vs. HSAs: which is better for your company?
Both Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are plans that are available to employees to pay for various healthcare costs. Each one has several advantages; Clarity details each plan.
Employees with health plans have access to FSAs to pay for co-pays, deductibles, certain drugs, and other healthcare costs. FSA monies are pre-taxed, so employees are paying lower taxes since they are not paying tax on any funds they have set aside for the FSA. Employees can also pay for prescription and over-the-counter medication as well as medical equipment. In addition, the employer sets up the FSA so the employee need only contribute a portion of their paycheck to pay for the expenses they qualify for.
With an HSA—an employee benefit program that permits employees to contribute pre-tax monies through payroll deductions to pay for health expenses such as deductibles, co-pays, prescription drugs, and vision and dental expenses—employees gain many benefits. Contributions are tax-deductible, and any interest earned is also tax-free. Another benefit is if the employee changes jobs, HSAs are transferrable. An additional plus is that these funds are accessible to the employee as soon as money is placed into the account. Unused funds can remain in the account and roll over from year to year.
Typically, employees who carefully document every dollar they spend on healthcare will benefit from an FSA. Combined with a medical plan with a low deductible so they have faster access to insurance benefits, an FSA makes sense. Careful budgeting is necessary to maximize the FSA. Employees who have an HSA are usually healthy. They may choose a High Deductible Health Plan (HDHP)—paying close attention to their preventive care so they can carefully consider what to spend their healthcare dollars on. These employees must also closely examine their future healthcare spending since their funds rollover to the following year. Employers should survey their employees to see which type of account they would prefer before deciding which account to offer.
About Clarity Benefit Solutions: Clarity Benefit Solutions FSA company, provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, Clarity Benefit Solutions FSA company has provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.
Media Contact: Calvin Clark, Clarity Benefit Solutions, 7324288282, [email protected]
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SOURCE Clarity Benefit Solutions
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