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5 Myths About Pre-tax Benefit Accounts

myth vs. facts about pre-tax benefit accounts

Whether you are a participant exploring your benefit options or an employer preparing a benefits package, you may have formed certain myths about pre-tax benefit accounts.

In a perfect world, we would all have a clear understanding of the different types of accounts that exist and understand how each can provide certain benefits and advantages. But, more often, we are all a little fuzzy on the details. This “fuzzy” factor is what sometimes leads to myths and misconceptions about how each of the accounts work. To help cut through the “fuzzy” factor, we present 5 Myths (and Facts) about Pre-tax Benefit Accounts. Download Infograph.


5 Myths about Pre-tax Benefit Accounts. Pre-tax employee benefits can deliver major savings for employees and provide a great incentive for prospective hires. But those benefits only offer value if employees understand and take advantage of these programs. Here are a few myths about pre-tax benefit accounts. Myth #1: An HSA only covers individuals covered by the qualified health plan. Fact #1: HSAs can cover any qualifying spouse or tax dependent, regardless of their enrollment in a qualified health plan. Myth #2:You'll lose your HSA funds if you don't use them. Fact #2: Your HSA funds roll automatically each year and you with you if you change jobs. Myth #3: You can only change your HSA contribution amounts following a life event. Fact #3: HSA Contribution amounts can be changed at any time for any reason, although your employer can restrict changed to once per month for administrative reasons. Myth #4: You, your spouse, and your eligible dependents are automatically covered by an HRA. Fact #4: Your HRA covers anyone --you, your spouse and eligible dependents -- who is also covered by a group health plan and listed as an eligible dependent on you HRA. Myth #5: You can deposit funds directly into your HRA. Fact #5: Your employer makes tax-free contributions to your HRA, which you, as an employee, can use to cover certain medical expenses.

Benefit Resource aims to help you break down these myths and better understand how you can create comprehensive solutions for your employees. If you are interested in learning more, please contact us or request a proposal.