How To Save Money On Health Care Through Necessary Purchases

With even better offerings from the new health care law expected in the coming months

, you can start to save money now by taking advantage of already necessary purchases, and put aside as much money as possible for emergencies. New and better employee health benefits both mandated by government and offered by private corporations seem to be all the rage this year. Here are some tips on how to save money through necessities.

Even though private healthcare plans have gained a rather notorious reputation over the years, many people are actually pleased about being covered by one as a company benefit. In emergencies, a private health care plan such as an HMO, POS, or a PPO can really be a life saver. Very few people have large chunks of cash available in reserve for such emergencies. Nowadays, most employees can select more than one type of private health plan.

Flexible spending accounts (FSA) are another great benefit. Simple and straightforward, these allow you to put aside money tax free, which you can draw on in the event of a medical emergency. The money from your salary goes straight into your FSA, and is not taxed. However, the IRS does impose a limit of $5,000 a year though, you can put more money in, but only $5,000 can be tax free.

Similar to FSAs, health reimbursement accounts are a benefit provided by companies to fill in the gaps for expenses your private insurance won't cover. Unlike FSAs which are deducted from your income, HRAs are totally company sponsored, and should you leave the company, the unused money will revert to the company.

A health savings account (HSA) is very similar to an FSA or an HRA. It is different from an FSA because it is used in conjunction with a high-deductible health plan, whereas FSAs come with more traditional health plans. Unlike FSAs, HSAs earn interest if unused, unlike an HRA, the money in an HSA is an employee's to keep even after he or she leaves a particular company.

by: Ed Floyd

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