What are the benefits of a reimbursement account?
Reimbursement accounts offer a range of advantages for both employers and employees. By understanding the benefits of a reimbursement account, employers can make informed decisions regarding their benefit packages.
What are the benefits to an employer?
Reimbursement accounts, sometimes referred to as medical reimbursement accounts offer benefits that apply to both the employer and the employee. However, there are certain advantages distinct to employers.
- Employers can decrease tax amounts by offering reimbursement accounts. Qualifying contributions made by both employees and employers to these accounts are not generally subject to income and payroll taxes.
- These accounts can also help employers stand out and retain talented employees. Employees will be able to see that their employer values their health and wellness needs.
- Salary is not the most important factor to recruiting employees. 79% of employees prioritize benefits such as medical coverage while evaluating job opportunities.1 This could be the deciding factor for candidates comparing multiple job offerings.
What are the benefits to employees?
Staying competitive in an employee-led job market is difficult. The benefits of reimbursement accounts for employees could be the competitive edge you’ve been waiting for.
- Employees also benefit from tax deductions. Employees can potentially decrease their taxable income by participating in reimbursement accounts. And, around 90 percent of employees enrolled in employment-based group health insurance coverage have their share of premium payments excluded from income and payroll taxes.2
- These accounts offer employees the convenience of setting aside money throughout the year for eligible expenses. Knowing eligible medical expenses are likely covered through a dedicated account can provide relief, financial security and possibly lower stress levels.
- Productivity and team morale could improve when employees feel supported financially. 72% of employees believe that more work benefits would increase job satisfaction.3 This can lead to increased engagement and purpose behind employees’ work.
Some of the best employers keep the well-being of their employees a top priority. Considering all reimbursement options for employees can help ensure you remain among the best. Offering medical reimbursement options is an effective way to improve employee experiences and employer satisfaction.
This blog is up to date as of July 2023 and has not been updated for changes in the law, administration or current events.