Product Overview
Consumer-Directed Healthcare (CDH) accounts allow pre-tax money to be set aside for eligible expenses that might not be fully covered under traditional health plans. However, the benefits don't stop there. Accounts also exist that facilitate tax savings for recurring expenses, such as dependent care and transit.
Basic Types of Consumer-Directed Healthcare (CDH) Accounts Offered by HSA Bank
Health Savings Account (HSA)
A HSA is a unique, tax-advantaged account that can be used to pay for current or future healthcare expenses. When combined with a high-deductible health plan, it offers savings and tax advantages that a traditional health plan can't duplicate.
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Dependent Care Flexible Spending Account (DC-FSA)
A DC-FSA covers qualified daycare expenses for children younger than age 13 and adult dependents who are incapable of caring for themselves. A DC-FSA provides tax savings because employees don't pay federal or FICA taxes on the money they put into their account, and many state taxes are also exempt. With a DC-FSA, pre-tax funds are deducted from each paycheck and automatically deposited into the employee's account.
Learn MoreHealthcare Flexible Spending Account (HC-FSA)
A HC-FSA is an employer-sponsored account letting employees set aside pre-tax dollars to pay for eligible healthcare expenses. It's a smart way to save and pay for eligible healthcare expenses, because employees don't have to pay federal or FICA taxes on the money they put into their account, and many state taxes are also exempt. With a HC-FSA, pre-tax funds are deducted from each paycheck and automatically deposited into the employee's account.
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Health Reimbursement Arrangement (HRA)
HRAs are a way for employers to help offset their employees’ healthcare expenses, while gaining tax advantages. Employees are given money from their employer to spend on out-of-pocket medical expenses. All employer contributions to HRAs that meet with IRS rules are 100% tax deductible to the employer and tax-free to the employee.
Learn MoreOther CDH Accounts & Administrative Solutions
Commuter Benefits
Commuter Benefits enable employees to pay for certain workplace mass transit and parking expenses on a tax-free basis through payroll deductions up to the limits set by the IRS. Employees set aside funds on a tax-free basis to pay for eligible workplace mass transit expenses.
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Retiree Reimbursement Arrangement (RRA)
A Retiree Reimbursement Arrangement (RRA) is a way for employers to help their retirees offset healthcare costs in retirement with tax-free dollars. This can be a more predictable and cost-effective option for employers compared to offering defined benefit retiree health plans.
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Wellness Incentive Accounts
Create a culture of health with consumer-directed health plans. When employers engage their employees in their health, they have an opportunity to not only lower healthcare costs, but play a role in healthier and more productive employees.
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COBRA
COBRA allows an individual and his or her spouse, former spouse and dependent children to elect continued coverage under an employer-sponsored health plan at their own expense for a limited time when coverage is lost due to a qualifying event.
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