If ever you've had to pay out-of-pocket for medical, dental, vision or prescription expenses, you likely either already had some money set aside or wish you had... That's where Healthcare Flexible Spending Accounts (HCFSA), Limited-Purpose Flexible Spending Accounts (LPFSA) and Health Savings Accounts (HSA) come in particularly handy. As a Benefits Administration Professional, I've become acquainted with the various types of accounts available to cover healthcare costs. The similarities and differences in these account structures will be covered in this essay.
One thing these accounts all have in common is their very specific rules that are governed by IRS guidelines in Publications 502 & 969. Misuse of the accounts will lead to hefty penalties and other unfavorable tax ramifications. Each has specific eligible expenses and deviating from those strict guidelines is a recipe for a tax disaster.
HSAs are to be used in conjunction with a high-deductible health plan, which in the current plan year is defined as a medial plan with a minimum annual deductible of $1300 for self-only and $2600 for family coverage (wherein "family" consists of any combination of
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The accounts can be used for eligible medical, dental, vision and prescription expenses incurred during the plan year. The funds generally do not roll over from year to year (though some employers do allow for a run-out period at the beginning of the next plan year). The accounts are commonly referred to as "Use-It-Or-Lose-It" accounts for this reason. One key differentiator between HSA and HCFSA is that the funds are available from the very beginning of the plan year rather than becoming available as they accrue. Employers fully fund the account up front and the participant pays this back over the course of the plan year via payroll deductions (Pub
it requires consumers to open a Health Saving account and the State will select an administrator in accordance with the account. The consumer finances a self-funded high deductible health benefit coverage including preventive health care to a plan enrollee in the State.
Funded by the employer, the health reimbursement account (HRA) is a reimbursement plan for the employee with high deductible health plans. In order for employees to receive payments back for out of pocket medical services, the employee must make a claim to the HRA. For instance, the employee with a high deductible, copayments, and coinsurance in which medical services not covered by the health plan, may request payment for out of pocket expenses (Valerius, Bayes, Newby, Seggern, 2008).
Unit 2 AssignmentKelley WhitcombKaplan UniversityHI215-01: Reimbursement MethodologiesProfessor Kathleen SobelJuly 20, 2015Medicaid is one of the biggest insurance plans you can get in any state. In the state of Indiana, it is based off of your income. There is a certain amount (income) you have to make to determine if you will receive Medicaid or Healthy Indiana Plan (HIP). HIP is still a form of Medicaid, but you would have to pay monthly cost for it and have certain set of co-pays for certain services that is needed. HIP Plus is the recommended plan for members as it provides health coverage for a low, predictable monthly cost. HIP Plus also covers dental and vision services. If you do not pay your monthly payment you can be removed from
These proposals often focus on using hospital DSH payments to expand coverage rather than using these sums to make payments to hospitals, using savings from reductions in other programs, or proposing new revenues (Holahan et al., 1995). The goal is to expand coverage at small new costs to the government (Holahan et al., 1995). The key features of
The Flexible Spending Account (FSA) is valuable to consumers, businesses, and policymakers it helps better assess returns on health care spending. If you have a health plan through employment, it can be beneficial to have a Flexible Spending Account (FSA) for copayments, deductibles, some prescription medication, and some durable medical equipment. Using an FSA can decrease your taxes that you pay. An FSA is an account an employee can put money into to pay for certain out-of-pocket health care costs, but you must use the money in an FSA within the plan year.
| Pressure to save the money in your HSA might lead you to forgo care.
An FSA or Flexible Spending Account is a beneficial health plan through an occupation. FSA is money that is set aside for out of pocket health maintenance expenditures. Prescription's, Dental, and Eye Wear are three of the allowed expenses of the FSA. There are a few more expenses that are covered with FSA but those three are the most common. FSA can cover medication a prescription medications and over the counter. Insulin is a good example of the kind of medications that can be bought with FSA funds it does not require a prescription. For dental it is teeth cleaning, sealants, and fluoride. For eyes they have many expenses eyeglasses, lenses or even exams for medical expenses. They can even include eye surgeries such as laser eye surgery.
I currently work for a hospital which is part of an academic medical center. It offers 3 health plan options to choose from. The first is the hospitals own medical plan which which is has features of an EPO, and can be categorized as a CDHP (Consumer Driven Health Plan). It has a higher monthly cost, but lower out-of-pocket costs when care is needed. It has a large network of providers including the hospital, and a network of providers who have partnered with the institution. You are not required to have a PCP, but it is recommended, you must use in-network providers, it has a HIA (Health Incentive Account) with wellness incentive funds available for members. The second is a POS plan from one of the larger Insurance companies with 2 tiers of in-network providers, lowest monthly cost, but a higher out-of-pocket cost when care is needed, until you meet the annual deductible amount. This has a Health Savings Account (HSA) attached, and you can have tax deductible contributions go to the fund, and wellness incentives funds can be deposited into the HSA. The third is an HMO plan with the highest monthly cost, but a lower out-of-pocket cost compared to the POS plan when care is needed. It also has an HIA attached as well.
According to David Nather, the bill also plans to set up something called a health exchange. A health care exchange is a virtual marketplace where you can purchase health insurance. It is “Expedia for health care” essentially(page 71). The exchanges were created for small businesses and for people who cannot obtain employer based insurance or they do not want insurance from their employer. Health insurance cannot refuse coverage for pre-existing conditions. The new standards organize the plans into one of four categories. These categories are as follows: bronze, silver, gold and platinum. According to Nather, bronze covers 60% of all health care costs; silver covers 70% of all costs; gold covers 80% and the platinum plan covers 90% of all health care costs. All these values are averages so coverage will vary (Nather page 76). If health insurance companies raise rates too much, they will be removed from the exchange.
The Health Savings Account is advantaged by taxes savings that is available for taxpayers in the United States for people that are deductible in high rate. Employees and employer could contribute through pretax payroll deduction or the financial institution. The amount should not exceed amount that set by IRS. It is fall under health plan only.
Understanding the classification of healthcare services in terms of acute and long term care enable us to plan for services, to describe institutions, and to allocate funding and reimbursement. In the United States, healthcare services provided by health care providers (such as doctors and hospitals) are paid for by the following including, private insurance, Government insurance programs, people themselves (personal, out-of-pocket funds). Additionally, the government directly provides some health care in government hospitals and clinics staffed by government employees. Examples are the Veteran’s Health Administration and the Indian Health Service.
Baker, J & Baker, R.W. (2011) Health Care Finance, Basic Tools for Nonfinancial Managers (3rd Edition). Jones and Bartlett Publishers.
A flexible spending account is a special account that you can put money into that you use to pay for certain out-of-pocket health care costs. This is money you don’t pay taxes on, which means you will save an amount equal to the taxes you would have paid on the money you set aside. Flexible spending accounts also have tax benefits, continue reading to find out more.
A health Flexible Spending Account is a discretionary segment of a cafeteria plan that permits representatives to pay for their offer of uninsured restorative or dental expenses on a pre-charge premise. Also, (FSAs)
Making patients more aware of costs is also the reasoning behind consumer-directed health plans, which link a high-deductible health plan with tax-sheltered health reimbursement accounts (HRAs) or health savings accounts (HSAs). Patients make out-of-pocket health care payments from their HRA or HSA until they have reached their yearly deductible amount, at which point their health plan starts picking up expenses.