The 3 Most Common Consumer Directed Health Plans And Their Benefits To Cleveland, Ohio Residents
When you are looking to have a higher amount of control over your health care dollars and you are wondering about the benefits of consumer directed health plans, there are a number of considerations that need to be made by Cleveland, Ohio residents.
It starts by knowing the differences when it comes to the consumer directed health plans that are available to you and when a Cleveland, Ohio citizen is looking to get the most out of their health care dollar, it behooves them to know the benefits of each plan.
Let’s take a closer look at the advantages of all three consumer directed health plans, so that Cleveland, Ohio readers can find out everything that they need to know.
High Deductible Health Plan (with Health Savings Account)
These plans are rising in popularity and for good reason. The deductible is high, but money can saved on these expenses with the usage of pre-taxed dollars. Your health savings account can also be used to pay for other qualified out of pocket costs. The funds in your health savings account can be utilized by a dependent on your tax return who needs medical assistance and spouses also qualify.
When you deposit funds into the health savings account, you do not have to pay any federal taxes on the amount at this point in time. Tax free interest can also be accrued on these accounts. The funds can be rolled over from year to year, as opposed to other options that require you to spend all of it or risk losing what is left over. While the funds can be used for other non medical expenses, income tax must be paid in these instances.
Health Reimbursement Arrangements
These consumer directed health plans are set up on your behalf through an employer. The deposits are also made by the employer and this plan often appeals to those who do not wish to handle all of the ins and outs of their account on their own. Unlike the aforementioned accounts, those who wish to enroll do not need to have enrollment in a health plan with a high deductible.
If you deposit funds into these accounts, there are no federal tax penalties at the time when you deposit them. Dependents and spouses can receive reimbursement. Premiums will need to be paid, but the funds in the accounts can be rolled over each year. There are no caps placed on the amount of money that an employer can deposit and the funds can be used for other employer health benefits.
Flexible Spending Arrangements
The employer is also responsible for setting up these accounts on your behalf, but if the funds are not used by the end of the year? You will lose them. No high deductible health plan is needed for you to enroll in a flexible spending arrangement. Your employer will contribute to the account and you are able to do so as well.
No employment taxes are deducted from the deposits and these accounts are designed with the idea of paying off your medical expenses within a calendar year. If you are looking for a plan with some carry over, there are some flexible spending arrangements available to you.