Understanding The Different Types Of Health Insurance Plans
When it comes to choosing a health insurance plan you may be at a loss to determine the plan that is right for you
. Many health insurance plans offer extras that make them a better value for consumers and although the premiums may cost a little more they may wind up costing you less in the long run.
HEALTH SAVINGS ACCOUNT - This is an account that you pay into during each pay period and the amount is deducted before taxes. As a tax free account, you can use the money that you have saved to pay any co-pay, deductible amounts, plus anything that is not covered by your health insurance plan. A HSA does build interest and carries into the future to allow you to build up money in case of a serious medical crisis.
HEALTH REIMBURSEMENT ARRANGEMENT - This is a plan that the employer contributes to on behalf of their employees by which the employee can withdraw funds for eligible health expenses. It is only at the employer's discretion how much if any of these funds can be rolled over at the year's end.
FLEXIBLE SPENDING ACCOUNTS - Along the lines of the HSA accounts these are accounts that are established by the employer on behalf of the employees with pre-tax donations. These types of plans can be offered in conjunction with a variety of different health plans and many companies offer these as an add on to their health insurance plans or these plans can also be put in place instead of conventional health insurance options. This plan is a use it or lose it type plan where employees lose this money if not designated to health related expenses by the 2 month grace period that follows the end of the calendar year. While of benefit to the employee they must really work to try and anticipate how much their health expenses will be for the coming year.
ARCHER ACCOUNTS - This type of account is one that is set up by those who are self employed and those who work with businesses who have less than 50 employees. In order to be eligible for this type of plan you must have a high deductible health plan. These funds do roll over and can be used at will by employees for eligible health expenses. Donations to these accounts can be made by the individual or by the employer however both may not contribute to the account in the same year.