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|ECFC Issue: Tax Advantaged Accounts|
Tax Advantaged Accounts
A majority of employers currently sponsor consumer driven health plans for their employees. ECFC member companies assist in the administration of such accounts for over 35 million employees. Approximately 103.5 million Americans benefit from these tax advantaged accounts, which include Health Savings Accounts (HSAs), Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs).
More and more employers are moving toward higher-deductible health plans or plans that increase the amount of cost sharing borne by employees. In addition, employers are taking action to reduce the costs of their health coverage, while protecting employees from higher out-of-pocket costs by moving to account-based, consumer-directed arrangements. Consequently, tax advantaged accounts, such as FSAs, HRAs and HSAs, are of increasing importance to American workers and their families.
These tools provide a means of budgeting for increased out-of-pocket health care costs and help many Americans pay for critical health care procedures that otherwise they may forego. According to a 2014 survey conducted by Visa, Inc., 43 percent of the responders said they would probably/definitely cut back on medicines and treatments if they didn’t have an FSA. The type of treatments they would cut back on, in order of most to least, includes: doctor visits, vision, dental, over-the-counter (OTC) medicines, prescriptions, and sick doctor visits.
FSAs, HSAs, and HRAs are essential health benefits that allow account holders to reduce their yearly tax burden while covering a vast amount of potential healthcare costs including over-the-counter products, medical services, preventative care, prescription medicines, and more. American families should continue to have the option to fund these accounts to plan for and cover expected and unexpected medical expenses.
Learn more about other ECFC issues.