Frequently Asked Questions about Health Spending Accounts 

A Health Care Account is an employer-funded account used by employees to pay for health care expenses. Charges for covered medical care services are first paid from this account. Money spent from the Health Care Account is also applied toward the deductible. Unspent funds roll over from year to year. If the employee leaves the plan, funds return to the employer.

A Health Savings Account can be established with funds from the employer, the employee or both. Employees can use these funds to pay for covered medical care services and money spent from this account also counts toward the deductible. The employee owns the account and funds remain with the employee if he/she leaves the plan.

A traditional plan generally pays a percentage of the charges for covered medical expenses only after members satisfy a plan deductible or copayment. With a spending account, preventive care and wellness services received in network are paid in full before the deductible is met.

You can choose to set aside a specific amount of money for your employees each benefit year in a Health Care Account, and/or your employees can establish a Health Savings Account, which can be funded by the employer, the employee or both. These account funds pay for other covered health care expenses that are also applied to the deductible. Your employees pay the remaining deductible amount and then PPO benefits begin. Unused funds roll over year-to-year, as long as the employee remains in the plan. If the employee leaves the plan, funds return to the employer. HSA funds roll over year to year and are portable and remain with the employee even if he/she leaves the plan.

If an employee uses all of the funds in their Health Care Account, the employee is responsible for any remaining balance of the deductible before PPO benefits begin.

If there is a remaining balance in the employee’s Health Care Account at the end of the benefit year, it automatically rolls over to the next year and is added to the annual contribution made by the employer. The total balance remains available to the employee as long as he/she participates in the plan; however, to limit your company’s financial liability, the amount that can accumulate in this account can be capped.

If an employee chooses another plan or leaves the company without continuing the coverage (e.g., under COBRA), the balance in the Health Care Account returns to the employer.

HSA funds are portable and remain with the employee even if he/she leaves the plan.

A spending account empowers and engages your employees to become more active in managing their health and health care costs — potentially saving you money over time. Our integrated consumer-driven plans provide a seamless approach to claims processing — automatically paying claims from the Health Care Account or the PPO benefit plan. You pay as you go, funding claims only as they are paid from the Health Care Account, so unused account balances remain part of your company’s cash flow.