Under the umbrella of consumer driven healthcare products, there’s principally three products. Flexible spending accounts, health reimbursement arrangements and health savings accounts.
I have to say it’s been around for a long time since the 80s and just—quickly. Flexible spending accounts allow an individual to use pre-tax dollars to buy certain qualified items. It allows them to plan their expenditures and they got a financial commitment to their payroll toward the fund. And as they encourage expenditures, they file a claim where they’re using debit card to access those dollars to pay for those expenditures. And as an individual, you can over spend your flexible spending account. But if you have money left over the account at the end of the year, you’ll lose it. Okay because it is rollover.
After your re-imbursements arraignments are vague fascinating products with a great deal of flexibility but there are hundreds employer funded. Employers dedicate a certain amount of money per employee. They can isolate exactly what they want to spend on but it’s a definitely a pre-tax expenditure that the money is going to be used because people like spending employer’s money better than their own. But there’s a lot of opportunity with HRS. A lot of money can be accomplished.
With health savings accounts, they’re owned by the individual even if an employer deposits money has an initial stimulus towards savings. Once it’s in that account, the employee owns that money. If they leave their employer, they take that money with them.
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