When it comes to finding ways to continue health care coverage, employers continue to get creative. If you are looking for ways to give your employees flexible, comprehensive coverage and find that your current health plan is not satisfactory, you might consider high deductible health plans. Participation in these plans will also allow an employer put funds into a tax-deductible health savings account. When your employees withdraw from these health savings accounts (HSAs), they must use the funds for medical expenses that line up with the regulations outlined by the government. HSAs differ from flexible spending accounts in that your employees are not be required to spend all of the money within a year. Also, the balance in a HSA is not taxed, so the money in these accounts can grow and then be of benefit later, since many people will find that their medical expenses increase as they age.
With the rising cost of health care more employers across the country are choosing to offer different types of consumer driven health care, including HDHPs, as an opportunity to help keep plan costs down. The mayor of a city in Maryland, for example, recently proposed that his city offer high deductible health plans to all employees as a way to help solve a budget crunch. If the city council approves, “Ocean City will contribute an amount to an employee’s Health Savings Account (HSA), which the employee can utilize to satisfy deductible charges and allowable medical expenses” and this would apply to current and new employees.
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