Resource Center
How we can offer the best prices
How does an HSA work?
Can I insure just my child?
When I buy an insurance plan, how do I make payments?
Small Business
Health Reimbursement Arrangements
New HSA Regulations
HSA or HRA?
How we can offer the best prices
Health insurance premiums are filed with and regulated by Michigan’s Department of Insurance. Whether you buy from Capital Asset Insurance Services, your local agent, or directly from the health insurance company, you'll pay the same monthly premium for the same plan.
How does an HSA work?
- An HSA is a tax-favored savings account that may be used in conjunction with an HSA-eligible high deductible health insurance plan to pay for qualifying medical expenses.
- Choosing an HSA-eligible health insurance plan may help you save money. Typically, the monthly premium on an HSA-eligible high deductible plan is less expensive than the monthly premium for a lower-deductible health insurance plan.
- Contributions to an HSA may be made pre-tax, up to certain annual limits.
- Funds in the HSA may be invested at your discretion. Unused funds remain in the account and accrue interest year-to-year, tax-free.
Can I insure just my child?
Yes. When getting quotes for your child(ren) only, enter the child's gender and birth date in the "Applicant" or first row. Additional children should be entered below in the "Child" rows, but not the "Spouse" row.
However, many health insurance companies require one policy per child. So if you have more than one child, try entering just one child to see a larger selection of plans and prices. You are free to apply for each child separately.
When I buy an insurance plan, how do I make payments?
In most cases, when you complete your application you'll provide a credit card number or a check written to the health insurance company for the first premium payment. Typically, your credit card will not be charged nor will your check be cashed until you are approved for coverage. If you are not approved for coverage, or if you cancel your application, your card will not be charged and any check payment you made will be returned or refunded.
Once you've been approved for coverage, your ongoing premium payments are paid to your health insurance company typically on a monthly or quarterly basis. Insurance companies typically offer several payment options including monthly billings to be paid by check or credit card, automatic bank drafts or automated credit card charges. Please note that credit card billing of premiums is optional and you can obtain coverage without using that method of payment.
Health Reimbursement Arrangements
For employer groups that have ruled out HSAs in the immediate future, but are still looking for creative ways to save healthcare dollars, HRAs may be an attractive option. Don’t rule them out until you acquaint yourselves with the facts.
Here are some basic facts about HRAs:
- HRAs are a promise to pay, if and only if, there’s a claim.
- HRAs are 100% employer funded.
- HRAs can reimburse some or all of the same expenses that a flex plan allows. They can be as conservative or as liberal as the employer desires, within the tax code.
- HRAs can be linked to any type of health plan, or be used in lieu of a traditional group health plan.
- HRAs can be used with an HSA qualified health plan
instead of opening HSAs.
- HRAs can allow a rollover of all or some of the unused dollars.
In a word, HRAs are versatile. Many employers that have determined HSAs are not yet a good “fit” for their employees have discovered that an HRA makes more sense. The employer maintains control of unused funds and only reimburses when there is a claim. Additionally, HRAs can be administered in many cases with a debit card. In these cases, the HRA looks and acts much like an HSA, although it is not. At that point, one of the HRAs unintended benefits is that it becomes a tool to educate employees on what qualifies as an eligible medical expense under the tax code. This is especially important for those employers wanting to offer an HSA to their employees in the future but don’t feel they are ready for it. They discover that the HRA is the most logical bridge in establishing an HSA.
New HSA Regulations
On December 20th, 2006, President Bush signed the Tax Relief and Health Care Act of 2006. This Act enhances the use of Health Savings Accounts (HSAs).
The Tax Relief and Health Care Act of 2006 allows for the following:
One-time Health FSA or HRA Rollover
The Act allows certain amounts in a Health FSA or HRA to be distributed and contributed through a direct transfer to an HSA.
Certain Health FSA Coverage Disregarded
If an employer has amended its cafeteria plan to provide a “grace period,” such provisions will be disregarded for determining a participant’s eligibility to contribute to an HSA.
HSA Annual Deductible Limitation Repealed
The Act repeals the requirement limiting HSA contributions to the lesser of specified dollar amount or the annual deductible under the HDHP. Each participant can contribute the maximum ($2,850 for singles and $5,650 for families).
Allow Full Contributions to an HSA for any Participation during the Year
The Act provides that an individual, who becomes covered under an HDHP in a month other than January, may make a full deductible HSA contribution for the year if certain conditions are met.
HSA or HRA?
Four times when an HRA is a better option!
Certainly the momentum to implement an HSA plan is growing. The added flexibility created by the Tax and Health Care Reform Act of 2006 will further energize HSA expansion. For some groups, now is the time to establish an HSA plan. However, for other groups, the HRA remains a powerful option. Below are four times when an HRA is the better option over an HSA.
- As a transitional tool to introduce the workforce to a more consumer driven approach before moving to a HSA plan.
- When the employer wants to fund some or all of the health plan deductible, but is less excited about giving cash to employees through employer HSA funding. An HRA reduces employee out-of-pocket expenses, but can be less costly than HSA funding.
- When you start with a health plan that is not HSA qualifying and there is an advantage to be gained by funding some or all of the deductible or Rx through an HRA.
- You are not satisfied with HSA custodial services available locally and you need to buy some time for a better custodial option to develop.
In addition, an HRA can be effectively used to cover post-deductible HSA co-insurance and/or co-pays. Please contact us for more information on the creative use of an HRA.
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