SOURCE: Business Benefits Insurance
April 29, 2008 14:25 ET
Benefits Expert Jim Edholm Re-Thinks Rising Health Care Costs in New Article in Industry Week
ANDOVER, MA--(Marketwire - April 29, 2008) - "Health insurance costs are rising much faster
than inflation," writes business benefits expert Jim Edholm in a recent
edition of Industry Week Online. "But what can manufacturers do about it?"
In "Manufacturers Can Use FSA, HRA and HSA Plans to Control Health
Insurance Premiums" Edholm, President of Business Benefits Insurance,
explores the possibility -- and plausibility -- of the idea that employees
should take more ownership of their health care plans. Citing the latest
figures and statistics, Edholm breaks down the main components of the three
major alternate routes to healthcare coverage, weighing in the pros and
cons and offering his expertise to employers of all sizes.
Regarding FSA (Flexible Spending Accounts) Edholm writes: "The employee's
contribution is tax-deductible, and the withdrawal is income-tax free if
used for medical expenses. There are, however, several problems. The FSA
is usually offered in addition to the traditional health plan, so it's
mostly used for 'fringe' expenses -- eyeglasses, over-the-counter
medicines, etc. -- that aren't covered by the health plan. So it has no
effect on the cost of the company health plan."
On HRAs (Health Reimbursement Arrangements): "Creatively used, it's an
extremely effective tool, particularly for smaller employers. The employer
can select a plan with a large deductible, slash premiums, and establish an
HRA to help cover the deductible. Overall, an employer-specific plan HRA
can be a powerful savings tool, particularly for companies with fewer than
100 employees.
Finally, Edholm discusses Health Savings Accounts (HSA), praising several
points. "An HSA is the only triple-blessed tax vehicle: first, money
deposited is deductible; second, it grows tax-free in the account; third it
can be withdrawn income-tax-free for medical purposes, at any point in
life. If they spend intelligently, they can retain it (carrot), but if they
spend foolishly, they'll pay the cost (stick).
"So find a broker who is knowledgeable, creative, and able to discuss the
rewards and pitfalls of each of the plans," suggests Edholm. "Then move
ahead with a plan designed to meet the particular needs of your company."
Jim Edholm is President of Business Benefits Insurance (BBI), an employee
benefits planning firm in Andover, MA. Serving employers for more than 25
years, contact Jim by visiting his website www.Group-Insurance-Guide.com or
via his PR rep ken@thoughtleading.com