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Thanks for your question, Tori! For many small business owners, the people who work for them are not just their employees. The daily close interaction helps build strong relationships and in many cases, the owner develops a personal commitment to the health and welfare of their employees and families. Despite this commitment, a conflict may arise as health care costs continue to climb and threaten the bottom line of a small business.

There are several options to help control costs, such as High Deductible Health Plans (HDHP) paired with a Health Savings Account (HSA) or a Health Reimbursement Account (HRA). These types of plans are designed to give members more control over their health care spending. Members can draw from their HSA or HRA to pay for qualified medical expenses. With these types of plans, the premium payments are often lower.

There are three basic types of health funds which can be combined with an HDHP:

Health Savings Account (HSA) -Members can use funds from their account to pay for their deductibles. If someone qualifies to open an HSA, he/she can deduct contributions from income tax or contribute pre-tax dollars if the employer has a cafeteria plan established. With an HSA, you can invest in a variety of funds, earn tax-free interest and the money is available whenever you need it. If you withdraw cash from the account to pay for nonqualified expenses, though, the money is taxable and additional penalties may be involved.
Health Reimbursement Account (HRA) - An employer is the one who funds an HRA. Members can use this money to pay for deductibles and covered medical expenses and don't count it as income. The employer, though, defines how the money can be used and the money cannot be drawn out as cash.
Flexible Spending Account (FSA) - With an FSA, money is taken from your paycheck before taxes and put into an account. The IRS determines what services can be paid for using your FSA, including health care-related services and products, as well as certain expenses for your dependents. There is a use it or lose it provision in FSAs so if you don't use all the money in the account, your employer gets to keep it.

Health Care Spending Account - Participants estimate what their health care expenses will be for the coming year and set aside pretax dollars to pay for any out-of-pocket health care expenses.
Dependent Care Spending Account - Participants use pretax dollars to pay child or elder care expenses.

We're half way through the hour. Make sure you get your questions in so that Regina has time to respond.

Hi Chrysalis,

I'm sorry to hear that you are dissatisfied with your current coverage. You may want to compare the plans offered by all individual carriers in your area. Aetna, as well as other carriers, offers a variety of individual plans to meet your needs and fit your budget.

In some states, sole-proprietors are protected under small group reform legislation so there may be a small group option that works for you. Bottom line--you should evaluate all options. If you don't currently work with an insurance broker, you may want to engage one for assistance and guidance in finding the best plan for you.

Good luck!

Regina,

Do you have any words of wisdom or some last thoughts to leave with the Community?