The Merriam Agency now offers Third Party Administrator (TPA) benefit services including Flexible Spending Accounts, Health Reimbursement Arrangements, and Health Savings Accounts. These are IRS regulated plans that allow an employee, or employer, to set aside a certain amount of pre-tax money to pay for insurance premiums, out of pocket medical and dependent care, adoption expenses, and parking/transit expenses.
Health care costs continue to rise.
According to a study by the Milliman Medical Index, on average, a family of four spends approximately $20,728 on out-of-pocket healthcare costs annually. Some consumers are currently paying these expenses with after-tax dollars. A medical Flexible Spending Account (FSA) can reduce your expenses 25-40% by using pre-tax dollars to pay medical expenses such as copays, deductibles, prescription costs, dental, vision, and other allowed medical costs. The employer avoids paying payroll taxes on every dollar their employees put into an FSA, and the employee avoids paying taxes on every dollar they put into a Flexible Spending account. It is a win-win situation!
Health Reimbursement Arrangements (HRA) are a great way for an employer to contribute to the cost of an employee’s high deductible plan. An HRA is an employer-funded arrangement that allows employees to be reimbursed for a qualified medical expense, usually related to expenses covered under their high deductible health plan. Contributions into an employee’s HRA account, by the employer, are excluded from the employee’s gross income. High Deductible Health Plans are cost effective health plans with lower premiums; however, the high deductible amounts must be met prior to the insurance kicking in. When paired with an HRA, the employee is eased into the high deductible health plan, since the employer pays for part of that deductible.
A Health Savings Account (HSA) is another benefit which must be paired with a High Deductible Health Plan. An HSA allows the employee to take a pretax deduction from their pay to fund their HSA. Although the HSA must be paired with a high deductible health plan, the HSA will pay for any out-of-pocket medical expense incurred by the employee. If the employee does not use the money in the HSA, it rolls over from year to year, creating a savings account for future medical expenses.
The Merriam Agency has many options available to help you control the impact of high benefit costs on your employees and your business. Contact Shannon McMeel, TPA Manager, at 518-393-2109 for more information about how you can save with benefits programs offered by The Merriam Agency.