Similar to the 401(k), YourWay Frontier serves as an additional retirement savings vehicle employees can own. However, YourWay Frontier helps employees save their unused, pre-tax Frontier funds to cover future out-of-pocket health expenses totally tax-free. Learn from real-dollar examples demonstrating how employer contributions covering employee health insurance premiums as a part of the YourWay Frontier Funded ICHRA allow employees to pocket unused funds for annual pre-tax savings. In fact, YourWay Frontier is considered an even more desirable option as brokers, employers, and employees benefit better.
Did you know that only 40% of Americans have enough money saved to cover a $1,000 emergency expense?
While saving for retirement is traditionally the core emphasis of most financial planners and advisors, more emphasis is now being placed on saving enough money for everyday and emergency healthcare needs.
Here at OneBridge Benefits, we’ve given employer groups and brokers a head start with the YourWay Frontier ICHRA.
While we detail the full definition of an ICHRA in our “What is an ICHRA?” video, it can quickly be summarized as this: Employers provide a certain contribution amount (specific to health benefits) to their employees decide how they want to use it.
So, how does Frontier help individuals save and prepare for out-of-pocket healthcare expenses down the road?
Easy. Any unused, pre-tax Frontier funds can be saved for future use—whether it’s a copay due tomorrow, or a procedure 20 years from now.
For example, an employer contributes $500 per month to cover an employee’s health insurance premium. Let’s say this one employee is single and lives a healthy lifestyle, so they purchase a Bronze plan with a monthly premium of $300. Leaving an unused balance of $200.
Instead of the remaining $200 remaining with the employer as it would if the plan was a Notional ICHRA, the YourWay Frontier Funded ICHRA allows this employee to pocket those unused funds, each month, for an annual pre-tax savings of $2,400.
Those saved funds can be used to cover future out-of-pocket health expenses, tax-free!
Making the YourWay Frontier ICHRA even more appealing, as it serves as an additional retirement savings vehicle, like a 401(k).
Oh, and one more thing, since YourWay Frontier is an account-based health benefit, there are no penalties or taxable income from withdrawing or using funds, making it, at least for most employers and employees, an even more attractive retirement savings option than your traditional 401(k), where withdrawn funds become taxable income.
Want to learn more about how funded benefit plans like the YourWay Frontier ICHRA can help your business grow? Watch our “What is the difference between a Funded and Notional ICHRA?” video, or visit our website to learn more.