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HSAs or health savings accounts are savings accounts which allow individuals to save money pretax for qualified health care expenses, such as doctor visits, prescription drugs and dental and vision care, now or in the future through their job. The money in the account is owned by the individual, and stays with them even if they change jobs or health plans, or retire later.

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An HSA is a very good and underutilized savings account that belongs to the individual and offers triple tax savings: your contributions, interest from investments, and ongoing and future qualified withdrawals can all be tax-free. HSAs generally have lower premiums and can be used for qualified medical expenses.   An HSA also offers investment options, depending on your balance amount.

 

The Health and Human Services Dept, is expanding the use of health reimbursement arrangements (HRAs) starting in January 2020, employers will be able to use what are referred to as individual coverage HRAs to provide their workers with tax-preferred funds to pay for the cost of health insurance coverage that workers purchase in the individual market instead of employer supplied.

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Besides allowing individual coverage HRAs, the HRA rule creates an excepted benefit HRA. In general, this aspect of the rule lets employers that offer traditional group health plans provide an excepted benefit HRA of up to $1,800 per year Employers may also reimburse an employee for certain qualified medical expenses, including premiums for vision, dental, and short-term, limited-duration insurance. According to the departments, this provision will also benefit employees who have been opting out of their employer’s group health plan because the employee share of premiums is too expensive.

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HRAs are tax-preferred, so workers who buy an individual market plan with an HRA will receive the same tax advantages as workers with traditional employer-sponsored coverage. Further, by increasing employee options and empowering more people to shop for health plans in the individual market it will now theoretically lower costs for coverage in 2020.If you would like more information HRA, HSA & other employer, employee benefits options call or email us below to learn about the many options you have towards benefits and retirement planning with us here at

The 401k Man.