Help Your Clients Help Their Employees Pay for Healthcare

In an era of continually rising healthcare costs, review plan options that help employees and employers reduce the cost of healthcare insurance.

May 10, 2010
Paychex Inc., Compliance and Marketing Divisions

Many small businesses assume they can’t compete with large companies that offer group health plans. In fact, group health insurance is available to companies as small as one employee, with plan options that may cost less than traditional indemnity policies and HMOs.

Certain plan options are designed to help employees save some of their income for healthcare expenditures and others allow employers to help workers pay. All offer potential tax benefits for employers and employees.

Options include:

Section 125 Plans

Section 125 plans allow employees to set aside pretax income for any qualified medical, dental or dependent-care expenses. A premium-only plan (POP) enables employees to pay their share of healthcare insurance premiums using pretax dollars. A flexible spending account (FSA) is used to pay qualified out-of-pocket expenses not covered by a benefit plan.

Health Savings Accounts

A health savings account (HSA) is a tax-advantaged trust or custodial account for individuals who have a qualified, high-deductible health insurance plan (QHDHP). Participants can help reduce health costs by using an HSA in conjunction with an HDHP, which typically has lower cost premiums in exchange for a higher deductible on healthcare expenses. People who open HSAs can pay for qualified out-of-pocket healthcare expenses with tax-free dollars from this account, which can grow through investment earnings.

Health Reimbursement Accounts

Another savings option that can accompany any type of health plan is the health reimbursement account (HRA), an account that is fully funded by the employer, who also sets the ground rules for its use. A common practice with HRAs is that they are allowed to be used by employees to pay qualified medical expenses such as co-pays and deductibles. The HRA benefit is not counted in the employee’s income, so it’s tax-free and employers need to make payments only when employees incur qualified medical expenses.

Health Insurance and Administration From Paychex

In an era of continually rising healthcare costs, the focus for many small business owners is how to help employees and employers reduce the cost of healthcare insurance. Paychex can help. One of our licensed reps will guide you through each step, from assisting your client in choosing the right plan and enrolling employees, to plan administration and renewals. The Paychex Insurance Agency can provide you with competitive healthcare solutions for your clients. We partner with over 150 carriers to give you and your clients’ competitive rates on medical, dental, vision, life and short- and long-term disability insurance.

See for yourself — and encourage your clients to visit the NEW Paychex Insurance Resource Center at www.paychexinsurance.com for:

  • Guidance on how your clients can protect their business,
  • Group and individual health benefit options,
  • Access to free Web seminars and much more!

Paychex is proud to be the exclusive provider of retirement services for the firm-based AICPA Member Retirement Program, and preferred provider of payroll and retirement plan services for CPAs through the AICPA Business Solutions Partner Program.