Flexible Spending Account

One of the most popular and effective Section 125 plans is the Flexible Spending Account (FSA), which provide a means for employees to pay for certain out-of-pocket health care or dependent care costs on a pre-tax basis through payroll deductions.

Employees save on social security state and federal income taxes by lowering their taxable income. This strategy can generate more money to spend on other things employees and their families may need or want.


Health Reimbursement Account

Similar in some aspects to an FSA, a Health Reimbursement Account (HRA) allows an employer to set aside funds to reimburse employees for qualified medical expenses. Employee contributions are not permitted. Like an insurance plan, employers may deduct the cost of the HRA plan as a business expense under Internal Revenue Code 162

Babb, Inc. can establish and administer an HRA program that can partner with your current health plan design. In addition, we can assist you in creating a brand-new, partially self-funded health plan, which would optimally wraparound an HRA for a comprehensive proposal.


Health Savings Account

Health Savings Accounts (HSA) can be used with a health insurance plan where the benefits meet the criteria of a High Deductible Health Plan (HDHP). The HSA account, similar to an IRA, has funds held by a bank or insurance company as the account "custodian."

The money in the account can come from an employer, employee or family. Once the dollars are in the HSA, they cannot be returned to the employer. This type of plan can only be considered by the employer ready to make the transition to an HDHP. Dollars in the HSA can be used, tax free, for out of pocket health expenses. After Age 65, the money in the account can be used for anything, without penalty.