4 Voluntary Health-Related Employee Benefits
posted Feb 7, 2019 by Christine Scarafoni, PHR SHRM-CP in the Business Blog
It has become more and more important for employers to offer voluntary health related benefits as part of their compensation packages. Here are four health related benefits you might consider offering to attract top talent.
4 benefits you might consider offering
1. Flexible Spending Accounts (employer owned) - A flexible spending account (FSA) is a savings vehicle that employees can put money into to pay for certain out of pocket healthcare costs. FSAs are arranged through the employer and employees decide how much to put into it (up to a limit set by the employer and IRS annual maximums). Employees are not taxed on this money.
What are the benefits of an FSA?
- Reduces out of pocket costs for employees
- Allows employees to take home a larger paycheck by reducing their taxable income
- Spouses and dependents can be covered under an FSA
- Money is pre-loaded onto a debit card
2. Health Savings Accounts (employee owned) - HSAs combine high deductible health insurance with a tax-favored savings account. Essentially HSAs are like personal savings accounts used for qualified healthcare expenses. The limit is set by the IRS, with a catch-up provision for individuals over 55.
Health savings accounts are- tax deductible, tax free and tax deferred. Also, unlike FSAs, unused money in an employee’s HSA isn’t forfeited at the end of the year, rather it continues to grow tax deferred.
What are the benefits of an HSA?
- The contributions employees make to an HSA are tax deductible
- Employees don’t have to use HSA funds until they need them
- Money rolls over from year to year and continues to earn interest
3. Health Reimbursement Accounts (employer owned) - An HRA is a company funded, tax advantaged health spending account provided and owned by the employer. The money in an HRA pays for qualified expenses like medical, pharmacy, dental and vision as determined by the employer.
What are the benefits of HRAs?
- All employer contributions to an HRA are 100% tax deductible to the employer, and tax free to the employee
- HRA plans are very flexible and enable employers to control costs of providing healthcare benefits while providing employees with a valuable benefit.
- HRA plans can cover retired employees
By enrolling in an HRA, employees may reduce:
- health insurance premium
- health insurance deductibles (most common)
- co-insurance and co-pays
4. Wellness programs - More employees are seeking jobs that offer employee wellness programs as part of their benefits packages. Through a wellness program, you can offer your employees trainings, seminars, workshops and more. A well designed wellness program can increase productivity, boost morale and reduce stress.
Programs can cover a wide range of health issues. Many companies offer programs which address things like nutrition, physical fitness, cholesterol and blood pressure screening and stress management.
Voluntary benefits are playing an increasingly important role in the compensation strategies of employers and organizations. If you don’t offer one or more of these benefits, you might be losing out on top talent!
Questions? Contact us.