Program Audit & Analysis
       Group Health & Welfare
       Ancillary Benefits Trust
       Flexible Spending Accounts
       Consumer-Directed Plans
       MA Health Care Reform
       Preferred Insurance Carriers

CONSUMER-DIRECTED PLANS

Since 2003, the Pension Protection Act has paved the way for a number of plan designs that are truly market-driven and consumer-directed. One way CBG helps companies take advantage of this development is through High-Deductible Health Plans (HDHPs).

With HDHPs, companies can capture substantial premium savings without sacrificing the integrity of their health plans. Our innovative approach sets aside savings to offset employee expenses which, when incurred, are paid directly to providers.

There are several important things to know about HDHPs, however, before electing for Health Reimbursement Arrangements and Health Savings Accounts. Fortunately, CBG has the knowledge and experience to help our customers figure it all out.

Before one can establish and fund a Health Savings Account (HSA), the individual must be insured under an HSA-compatible HDHP with an annual deductible of at least $1000 for an individual and at least $2000 for a family. An HDHP can be purchased individually or through an employer-sponsored plan. The maximum HSA contribution is limited by the amount of the deductible. So, to take full advantage, one must employ a HDHP close to the legislated HSA contribution caps of $2650 for an individual and $5250 for a family.

HEALTH REIMBURSEMENT ARRANGEMENTS (HRA)

HRAs, enabled through IRS Tax Code Section 105, are employer-sponsored accounts used to reimburse employees for eligible medical expenses. Health Reimbursement Arrangements are generally offered in conjunction with a high-deductible health insurance policy. To cover all or part of the deductible, the employer then establishes and contributes to a tax-advantaged HRA for employees. The account does not need to be pre-funded and unused funds may be allowed to roll over year-to-year. Employees use the allocated tax-free dollars in the HRA to pay for healthcare expenses not covered under the high-deductible plan. Only the employer can contribute to an account; employees cannot participate in the contribution.

ADVANTAGES OF HRAs

• HRAs are available to all business sizes
• Complete flexibility with employee retirement or termination
• Unspent funds can rollover year to year, as decided by the employer
• Employees are allowed to receive reimbursements tax-frees

HEALTH SAVINGS ACCOUNTS (HSA)

Established by an eligible individual or by an employer for an eligible employee, an HSA is used for paying qualified medical expenses. HSAs combine a savings account with a high-deductible health insurance plan, offering lower health insurance premiums with various tax advantages. Made possible through the Medicare Prescription Drug and Modernization Act, these Archer MSA-like accounts became available on January 1, 2004 for virtually anyone who has coverage under a HDHP.

ADVANTAGES OF HSAs

• Participating is easy
• Lower premiums
• Flexibility
• Tax-favored contributions
• Tax-free distributions
• Funds rollover & accrual

To learn more about High Deductible options, HRAs and HSAa, please contact us.