We have discussed the options available to coordinate with a High Deductible Health Plan (HDHP), how those options interact with each other, and provided tips on how to decide which option works best for your company. As we navigated Health Savings Accounts (HSA), Health Reimbursement Arrangements (HRA), and Flexible Spending Accounts (FSA), we reviewed costs, flexibility, control, eligibility, portability, alternative coordinating coverage, COBRA, and terminology clarification.
In today’s final article, we’ve decided to mix-up our format and incorporate a short quiz that encompasses the overall theme of our previous articles.
- True or False – An HSA is the only option an employer has to coordinate with a High Deductible Health Plan.
- False, an employer can choose among many coordinating plans such as FSA, HRA, HSA and others or simply choose not to offer any coordinating plan with their HDHP program.
- True or False – An HSA is the best option an employer has to offer with a High Deductible Health Plan.
- False, each employer should consider their benefit goals to determine which option is best for their company. While an HSA can be a good option for some groups (mainly those not contributing to employee accounts), many factors lead other groups to incorporate an HRA and/or FSA plan instead.
- True or False – An HSA will always save an employer money.
- False, although every insurance market differs on premium savings, the inability to limit HSA distributions to medical expenses can actually increase total costs.
- True or False – An HSA is simple for everyone involved.
- False, while an HSA design can be simple, employee eligibility can be complex. If a significant portion of your employee base has conflicting coverage (FSA, Medicare, retired military, coverage through spouse plan, etc.) an HSA can become cumbersome for all involved.
- True or False – An HRA provides maximum flexibility in design and cost controls for employer contributions.
- True, HRAs offer employers practically limitless design options including eligibility, contributions, portability, roll-forward, plan year, run-out, and most importantly eligible expenses. Among the available alternatives, HRAs provide employers the highest level of flexibility to design a plan that works best for their company.
We trust these communications have been helpful as you research which option works best for your company. Regardless of which option you select, myCafeteriaPlan will be available to support you through the entire process.