What’s a Health Incentive Account?
As the cost of health care increases, many businesses are turning to health incentive accounts to help mitigate medical expenses. A health incentive account helps employers keep their employees healthy while decreasing medical bills. By offering employees a reward for staying on top of their health and well-being, employees become more aware of their health habits and empowered to make better choices.
Health incentive accounts offer a cost-effective solution to address the rising cost of health care insurance while focusing on the productivity and health of employees. Let’s look at what a hia account is, how it works and the benefits employers and employees can enjoy.
What Is a Health Incentive Account?
A health incentive account (HIA) is a reimbursement account sponsored by employers that financially rewards employees for completing healthy activities. An HIA allows employers to provide tax-deductible wellness care to their workers. When staff members make healthy choices, they earn credit that they can then use to cover qualified medical expenses.
An employee that works for an employer with an HIA qualifies for the account. However, some employees may be exempt, like part-time or temporary staff. The employer contributes to the account and sets the limit they would like. There is no maximum or minimum amount. The employer owns the HIA, so when an employee leaves, any incentive funds they have usually return to the employer.
HIA vs. HSA
A health incentive account may sound similar to a health savings account (HSA), but there are differences. While an HIA is employer-owned, an HSA is member-owned. The member owns the HSA and the money stays with them after they leave a job or retire. An HSA is a tax-advantaged account that lets members save pre-taxed dollars for future qualified medical expenses. Members can also save the funds for the future, including retirement. The funds also earn interest and members can use them for investments.
Using the account for qualified medical expenses excludes it from tax at a federal income tax level. Most states recognize HSAs as tax-free, with a few exceptions. Any unused HSA funds can roll over to the following year.
Health Incentive Account Benefits
A health incentive account encourages employees to take charge of their health by incentivizing them with rewards. Healthy employees are more productive, while unhealthy employees are often less productive.
More employers see the necessity of encouraging healthy behavior, especially as the cost of disability, insurance and other health-related expenses often exceeds the profit of larger companies. Employees look to employers for health insurance and expect them to cover expenses associated with health care. As health care costs rise, looking for innovative ways to care for your employee’s health is essential — an HIA is one of those methods.
An HIA is also an affordable solution to the rising health care costs. When done correctly, an HIA can help reduce unnecessary medical care costs and improve employee health. Chronic conditions are the leading driver of medical expenses in the United States. Many chronic conditions result from people engaging in risk behaviors such as smoking and physical inactivity. Choosing an HIA makes employees aware of poor health habits and encourages them to adopt healthier ones.
This growing trend is an excellent way to encourage employees to care for their health. Employees make better health care choices when their responsibilities align with rewards for healthier behavior. Your company can save on insurance premiums and lost productivity from sick days in the long run.
You can offer your employees less expensive health care plans using an HIA. Providing employees an option to earn rewards and money to cover their out-of-pocket medical bills makes up the difference in the coverage.
A health incentive account can also offer unlimited first-dollar coverage for wellness care that includes the following:
- Health screenings
- Annual physical exams
- Routine prenatal and well-child care
- Preventive care
- Tobacco cessation programs
- Obesity weight loss programs
This coverage will encourage employees to stay updated with screenings and exams. It will ensure your employees stay healthy and help you both save thousands of dollars in medical care for preventable conditions.
A plan that rewards employees for healthy behavior shows that you care about their health risks. When employers care for their employee’s well-being, employees might feel greater job satisfaction and an increased sense of loyalty to a company. Employers may enjoy higher retention rates when employees feel cared for.
How Does a Health Incentive Account Work?
Only employers make contributions to the HIA. There are no deductions from employee paychecks. When employees complete healthy activities such as getting a flu shot or visiting a doctor, they can earn money to reduce health costs they pay out of pocket.
To understand their health needs, employees start by taking a health assessment that is confidential. From this, they can understand what steps they can take to improve their health. They earn rewards for engaging in activities specifically designed to improve their health. Through an HIA, employees also can gain more knowledge about any potential health issues that they have. The assessment alerts them to take action and become healthier.
When an employee completes an activity, the credits go into the HIA. The credits will vary based on the specific activity. If an employee has a co-insurance, deductible or copayment expense, these credits can go toward these costs. The credits will automatically get used up until they are gone. Depending on the type of plan the employer provides, the credits may roll over until the following year.
Some employers choose only to reward employees if they complete specific wellness activities. For example, you can reward your employees $100 if they complete a health risk assessment. Many employers choose to incentivize employees for completing activities such as the following:
- Health risk assessment
- BMI reduction
- Biometric screening
- Annual physical
Get Affordable Coverage With Health for California
A health incentive account is an excellent way to incentivize employees to make healthy choices. When your employees are healthy, they are more productive and less likely to take sick days. You can also use an HIA to supplement a more affordable health plan and help employees cover out-of-pocket medical expenses. Empower your employees to take charge of their health.
At Health for California, we offer a range of health insurance plans that you can choose from to meet employees’ needs. We have four different tiers that allow your employees to select a health plan that fits their needs. You can offer as many plans as your want and set the contribution to a level to your preferred budget. To get started with your coverage, contact us today for a free quote!
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