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Flexible Spending Accounts (FSAs) are IRS-regulated plans that allow you to put a portion of your income on a pre-tax basis into an account to pay for certain medical, dental, and other healthcare expenses not otherwise covered by your health insurance. You will experience significant savings because you are not taxed on money paid for your eligible expenses. Depending on your tax bracket, you can save up to 45% on every plan dollar spent.
WHAT IS A HEALTHCARE REIMBURSEMENT ACCOUNT (HCRA)?
A Health Care Reimbursement Account (HCRA), also known as a Cafeteria Plan, is an IRS-regulated plan that allows employees to put a portion of their income on a pre-tax basis into an account to pay for certain medical, dental and other healthcare expenses not otherwise covered by their health insurance. Because you don't pay income tax on the funds set aside in your FSA, you get an increase in your take-home pay.
Instant Access to Funds with the MGIS Benefits Purchasing Card
HCRAs have been around for quite some time, but have traditionally been uninviting because of the cumbersome reimbursement process. In the past, a participant would pay for a product or service, submit a claim form and wait for reimbursement. The process is now streamlined with the introduction of convenient debit card technology. A participant can use the MGIS Benefits Purchasing Card to pay for eligible expenses at the point-of-service and get instant access to their FSA funds.
With the MGIS Benefits Purchasing Card, there are no out-of-pocket expenses, no claim forms and no more waiting for reimbursement. Click here for more information about how to use the card.
CALCULATE YOUR SAVINGS
HCRA participants experience significant savings because they are not taxed on money used to pay for eligible expenses. Depending on a participant's tax bracket, he or she can save up to 45%* on every plan dollar spent.
Use the MGIS CDH Calculator to estimate your possible savings with a HCRA.
*Participants save on Federal, State and FICA taxes. Actual savings will vary depending on a participant's tax bracket.
HOW THE ACCOUNT WORKS
You will have access to your entire elected amount as soon as the plan is activated, allowing you to pay for services even before you have had the money deducted from your pay. For example, if your annual election is $1200, you would have $100 deducted from your pay each month and deposited in your HCRA. If in March, you decide to have Lasik eye surgery with a cost of $1000, you can pay for it with your HCRA funds (even though only $300 has been deducted from your pay).
Estimate your elections conservatively because IRS guidelines state that any funds left in your account at the end of the plan year are forfeited to the plan sponsor.
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Consumer-Directed Healthcare Administration Specialists