Friday, June 14, 2013

The Advantages and Disadvantages of a Health Spending Account


Nowadays, a lot of people are more concerned about their health than anything else. They are more careful in choosing the foods they eat because of the fact that most diseases nowadays involve in the lifestyle of man. Well, some people are also practicing a work-home routine to avoid any accidents that might happen to them when they are outside of their house. But sometimes, some unexpected things really do happen and having a health spending account is the best option that you could get.
Sure you can get a traditional health insurance plan where you pay each month and your employer may even cover some or all of this type of plan. With these traditional health insurance plans there are certain requirements and restrictions. For example, there are certain requirements that you need to follow for you to become eligible. A qualified applicant must be 65 years old and below and have a high-deductible health insurance plan. The plan should only be your insurance coverage as well, if you are covered by any other health insurance plans, then you do not pass their requirements. That includes health insurance plans for vision, dental and long term care. These plans typically only cover 80% of traditional health expenses, such as medical and dental visits. You are responsible for paying out of pocket for the rest. Non traditional health expenses such as massage therapy, Chiropractic care, dental surgery, private health clinics, etc are not even covered.
As an employee, the advantages of having a HSA are that you have full control to the money that you will be spending. A certain amount of money is set aside by your employer in your HSA to be used as you deem fit to cover a large variety of routine health care expenses for you, your spouse, or your dependents. From the employer perspective this is a valued and economical way to provide tax free health benefits to employees, and all the money invested by the employer is 100% tax deductible (including any fees). With this result, still a lot of people prefer to have HSA because everyone has different health needs and no one should be able to dictate that only traditional types of health treatments are right? Owning or managing a business sometimes means you need to travel to other provinces in Canada, or to other countries to do business. An HAS gives you the flexibility to travel and still obtain coverage for the type of health treatments that are most relevant for you. As long as the health practitioner is licensed in the location you happen to be in, you can rest assured things will be covered. An HAS is an ideal small business health plan. It doesn't matter what type of business you own, as long as you are a Canadian incorporated business, Although an HSA is good at covering a large variety of routine health care costs, it is not provide an insurance component to cover accidents or medical emergencies, although you can purchase a fixed term travel insurance plan and run this through your HSA. If you require true accidental or emergency coverage then there are plenty of options out there to investigate, including a stripped down traditional health insurance plan, or visiting one of many financial institutions who provide this type of emergency coverage