HSA, HRA, and Association Health Plans
Marina Cassandra (00:00):
And with that, I’m going to pass it back to Michael, the expert on H.
Micheil Wallace (00:05):
Thank you, Marina, uh, hardly would consider myself an expert on HSA’s, but we’re going to cover them. So, uh, another option that, that you’ll see, uh, amongst employers, uh, is the HSA. It’s a health savings account, and these allow employees and employers to contribute pre-tax funds to help employees pay for medical expenses. Some important things to know about HSA’s is they are an employee owned account. Um, and that’s, that’s important because if an employee has an HSA and let’s say changes employers, that’s a portable account. That’s not something that remains with the employer. Um, they, they are, uh, plans that require the use of a high deductible health plan, uh, that has to be paired with the HSA. Um, the accumulation can earn interest, which is, uh, another benefit and accumulation can be rolled over from year to year. Health reimbursement arrangements, we touched on those a little bit earlier on, um, and so I want to provide a little bit more information on, on HRA’s.
Micheil Wallace (01:16):
Um, so because there is a significant difference between HRS and health savings accounts, um, HRA’s do not earn interest. HRA’s are also not required to be used with a high deductible health plan as are HSA’s. Um, given an HRA, can be really complex. We definitely want you to connect with a tax professional. Um, there are just too many, uh, important nuances that, uh, we would be, uh, afraid to miss. So please, uh, connect with a professional. Association health plans are another option for some employers. These allow many small to medium sized companies, the ability to come together under one health plan and potentially reduce their costs and increase their benefit options. Uh, think of it almost like, uh, the larger, uh, employers that have more leverage to offer lower cost richer benefits to their employees. Well, these give folks that are smaller, uh, sized companies, the option to do that, uh, under an umbrella, if you will. And, and kind of in that, uh, joining together, they’re able to emulate more closely the larger employers. Um, there are specific regulations around these entities, uh, and criteria to participate. So, um, something that will be important to research, if this is something that you were looking into. Um, now an important thing to note is that unlike, uh, the other plan options we’ve talked about today, coverage is not regulated or guaranteed, uh, for the essential health benefits for pre-existing health conditions provided by the affordable care.
Collin Gabriel (03:07):
And just to clarify, so you’re saying that if someone is in an association health plan, they don’t necessarily get the, uh, the pre-existing condition exemption that’s in, uh, the affordable care act. Is that, what is that what that means?
Micheil Wallace (03:23):
Correct. Now while many, well, many associates and health plans do build that in to their plans. It’s not a requirement, um, and because it’s not regulated, uh, it’s, it’s, there’s no way to really guarantee that this will be in place as this, on an ACA approved plan.