Capital Group Benefits was established in 2000 as a full-service insurance agency. Specializing in group plans, CGB has dedicated itself to becoming a solution provider no matter what problems or obstacles are encountered. The specialists at CGB are knowledgeable in all areas of group and individual coverage and will design a customized plan to fit each client.
Capital Group Benefits can provide expert guidance in a whole new world of health care options.
Consumer-Driven Health Care
With the costs of health care rising at double-digit rates, most employers were forced to either reduce benefits or share more of the costs with their employees.
Neither of those solutions provided a positive solution for adequate health coverage or employee morale.
A whole new world of health care options opened up in the last few years as one possible answer to the dilemma: Consumer-Directed Health Plans (CDHPs).
A CDHP is a plan which includes a High-Deductible Health Plan (HDHP). It gets the employee involved while using the tax code to drive down the cost.
What is a “High Deductible Health Plan” (HDHP)?
Sometimes referred to as a “catastrophic” health insurance plan, an HDHP is an inexpensive health insurance plan that the member pays for all the costs up until the deductible is met then the insurance begins to pay, based on the plan design.
|2012 IRS Limits|
|Single Plan||Family Plan|
|Maximum Contribution Limit||$3,100||$6,250|
What is a Flexible Spending Account (FSA)?
Special accounts authorized under Section 125 of the Internal Revenue Code and typically funded by an employee’s salary reduction to help pay certain expenses not covered by the employer’s plan or insurance contract. Because FSA deposits escape federal income taxes, participants can pay for medical care with pretax dollars, but they forfeit any unused funds at the end of each calendar year.
What is a Health Reimbursement Arrangement (HRA)?
A Health Reimbursement Arrangement (HRA) is an instrument offered in conjunction with a high-deductible health plan, and is funded by the employer for each participating employee. It pays for eligible health care expenses typically covered under the medical plan. Unused funds can be carried over to the next year to cover future health care expenses, an incentive to employees to use their personal HRA wisely. If funds are exhausted, the employee is responsible for satisfying the remaining deductible before the plan begins to pay. If the employee changes jobs, the money stays with the employer.
Here are just some of the benefits of an HRA:
- An employer can provide employees with sound health care coverage at a considerable savings without reducing benefits
- The high deductible is compensated by the employer from the HRA which the employer can fund completely or a percentage of.
- The employer and employee generally save a sizable amount on their insurance premium by installing an HDHP.
- The employer reimburses either all or a percentage of the deductible.
- The HRA can be vested and rolled over depending upon plan design. HRA’s are very flexible.
What is a Health Savings Account (HSA)?
An HSA is a tax-free account with money deposited by individuals, employers, or both to spend on routine medical costs. The account is combined with an inexpensive, high-deductible insurance policy to pay for catastrophic medical care in case of major accident or serious illness. HSAs create a financial incentive to spend dollars wisely, because unspent dollars accumulate tax-free in their own personal accounts. Consumers are able to shop around, compare prices and providers, and select the medical services that are best for them.
The benefits of an HSA are:
- All contributions by employees are tax-deductible.
- Any interest earned is tax-free.
- Withdrawals for qualified medical expenses are tax-free.
- The employee owns the HSA. The funds are theirs to keep.
- The HSA is administered by a trustee.
- Balances left in an HSA account rollover from year to year.
- Funds can be invested.