Depending on your unique business structure, you may be eligible for a Health Reimbursement Arrangement (HRA) or a Health Savings Account (HSA) through the Corporate Services program. Those operating as a C-Corporation are eligible for an HRA, while all other structures can enjoy a Health Savings Account. Learn more below.
An HRA is an IRS approved platform that provides tax savings on medical expenses through an employer health benefit plan. As owners of a C-corporation, you can legally deduct 100% of family healthcare premiums and uninsured medical expenses through a Health Reimbursement Arrangement (HRA).
There is no need for health benefit funds to accumulate in a separate account.
As an IRS-approved tax-advantaged benefit plan, a Health Reimbursement Arrangement is a simple, effective way to supplement health insurance benefits and pay for a wide range of medical expenses not covered by insurance with pre-tax dollars.
With an HRA, corporations ultimately reimburse employee-incurred out-of-pocket health expenses with tax-free funds. Employees receive reimbursements through payroll without being taxed. In addition, corporate reimbursements are not subject to the employer FICA tax. These benefits can add up to 50% in combined tax savings on the cost of a medical expense.
A Health Savings Account (HSA) provides tax savings opportunities for those enrolled in a qualified High Deductible Health Plan (HDHP). Eligible participants can elect to contribute up to $3,450 for single coverage and up to $6,900 for family coverage in 2018. HSA funds can be used to pay for qualified medical, dental, and vision out-of-pocket expenses for you and your eligible dependents. With an HSA, you will never have to forfeit the money you have deposited. Unused funds roll over year after year, earning tax-free interest.