Paying Health Insurance With Pre-Tax Dollars in Ohio

Whether you call it a “Section 125 Cafeteria Plan” or a “Health Savings Account”, there is a way to start paying health insurance with pre-tax dollars in Ohio. If you’re an employer, you can even look at such plans as a way to give your employees cheap health insurance in Ohio!

How can your pre-tax dollars pay for insurance?
Basically, there are two types of plans: the Premium Only Plan (POP) or the Flexible Spending Account (FSA). POP plans cover the premiums that individuals (employees) normally have to pay for in order to get dental, health or life insurance coverage using pre-tax dollars. Because individuals pay less in taxes, they get to take home more money.

An FSA, on the other hand, allows the individual to pay for medical expenses that are not covered by his plan or by his family’s health insurance plan. On top of that, the individual gets to cover these expenses with his pre-tax income. FSAs can cover prescription drugs, dentist visits, contact lenses, laser eye surgery or doctor co-payments, for example.

Normally the employee decides how much he or she wants to “save” into the FSA for the year and the employer has to agree with the amount. This amount is then deducted evenly throughout the year. A mandatory limit for childcare expenses exist and the employer can also set limits on medical expense deductions for liability purposes.

Eligibility for Health Savings Account
The individuals who are eligible for a Health Savings Account must be covered by a health insurance plan with high-deductibles (over $1000/individual or $2000/family) and generally not covered by other health plans. These individuals can’t be covered by Medicaid and can’t be someone else’s dependent for tax purposes.

Are you eligible? If you are, then you are lucky. While you are probably spending less money on your premiums by opting for high deductibles, you can save even more money by using a Health Savings Account.

Who makes the payments?
The employee normally saves money into his or her own Health Savings Account but employer can also deposit non-taxable amounts into these accounts. This could be a great way for employers to increase benefits.

You should also know that any interest on these funds is non-taxable. However, there are penalties associated with using the money for purposes that aren’t health related. Make sure to become knowledgeable about what you can and can’t do with the money saved in your Health Savings Account. It could become the cheapest health insurance in Ohio if you carefully plan and manage your account.

Whether you’re searching for an Ohio health or medical insurance quote or you’re trying to find health insurance in Findlay, Ohio (or some other town in Ohio), you can talk to your employer about setting up a pre-tax insurance plan. After all, what is the cost of health insurance in Ohio and what are you doing to make it cheaper and better on your end?

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