A potential alternative to group insurance is the Health Spending Account (HSA). The product is being used by thousands of small business owners to control their cost and deliver flexible coverage to their staff.
For a business with no staff, an HSA enables a small business owner to deduct 100% of their personal health and dental expenses - without paying standard premiums typically associated with traditional health insurance plans. The ability towrite off health and dental expensescan create savings ofmore than 30%on health and dental related expenses. For entrepreneurs and self employed professionals, this is an effective tool to cut your taxes and reduce your medical costs.
For a company with a staff, an HSA becomes ameans for attracting and retaining talentdue to its unique properties. All benefits within a PHSP are100% tax free to employees. An HSA provides significantcost control to the employer andflexibilityfor employees.
2. What types of health and dental expenses are covered under a Health Spending Account?
One of the great benefits of an HSA is the freedom it provides through the extensive range of eligible expenses. Forget about restrictions. You'll love being able to claim 100% of your child's dental braces. These types of expenses along with a thorough list of qualified medical practitioners, procedures, and medical devices helps make Health Spending Account an attractive choice for the small business owner.
Unlike many traditional insurance plans, a HSA offers 100% coverage on a wide range of expenses...even the expensive ones. Does your son need physiotherapy? Does your spouse need a new pair of glasses or maybe laser eye surgery? Maybe you want to get an MRI? Rest assured, all of these are eligible expenses with a Health Spending Account.
You can even claim your spouse's premiums if they are a member of a traditional insurance plan. That's right. Premiums contributed to a non-government insurance plan are an eligible expenses with a Health Spending Account. How great is that?!
Do you have unpaid portions that are not covered from your spouse's plan? Not a problem - the remaining amount of an expense is eligible with a Health Spending Account. Fantastic.
Prescription drugs, massage therapy, and hearing aids are all eligible expenses too. If you are traveling to the sun on your upcoming vacation...pick up apair of prescriptions sunglasses so you can read on the beach (the sunglasses are eligible as well). Sore feet from that long hike or fishing trip? Pay a visit to your friendly Podiatrist as all of their services are eligible expenses.
3. How does an HSA compare to a traditional group insurance plan?
Will not restrict or limit benefits due to a pre-existing medical condition
Traditional Insurance Plan
Under a fully insured program, you will receive a plan booklet outlining the items that are covered and also the ones restricted or excluded by definition, co-insurance, deductibles or fee guides. Figuring out what your coverage is and if it will be reimbursed partially or in full can get complicated.
A PHSP is typically only restricted by dollar amount. You will have 100% coverage for all eligible expenses up to your spending account limit. Your account balance is updated by the administrator every time a claim is processed, eliminating the need to keep track of this information manually.
Traditional Insurance Plan
Your benefits may be restricted by an annual single/family deductible
Benefits can be restricted by a co-insurance of 50%-80%
There is a limit for the number of visits and treatments.
You are not restricted by co-insurance
No limits for the number of visits and treatments
A PHSP with a digital claim platform will process your claim within 24 hours versus many traditional insurance claims that can take several weeks to process.