What is a health incentive account (HIA)?

An HIA is an account created to financially reward employees for completing incentive activities. Employees may use earned HIA funds to reimburse themselves for qualified medical expenses for themselves, their spouses or domestic partners, and their dependents.

What kind of activities earn incentives?

Many companies are beginning to realize that rewarding employees for staying healthy can pay off in a big way for both the employees and the employer. An HIA allows users to earn additional money for health expenses by participating in health rewards programs.

Contributions to an HIA may be earned for completing certain milestones such as smoking cessation, meeting fitness goals, or adopting more healthy eating habits. Employers can customize the list of incentivized activities in order to best suit the needs of their employees.

A total win for employees

An HIA is a benefit where contributions aren’t deducted from an employee’s income and they don’t pay taxes on the money contributed. Contributions are provided only by the employer and employees get tax-free money to use to pay for qualified medical expenses.

Some qualified medical expenses

See the complete list in IRS Publication 502—Medical and Dental Expenses. Employers can further restrict qualified expenses from an HIA.

  • Acupuncture
  • Alcoholism (rehab, transportation for medically advised attendance at AA)
  • Ambulance
  • Amounts paid for health insurance premiums
  • Amounts paid for long-term care coverage
  • Amounts not covered under another health plan
  • Annual physical examination
  • Artificial limbs/teeth
  • Birth control pills
  • Body scans
  • Breast reconstruction surgery
  • Chiropractor
  • Contact lenses
  • Crutches
  • Dental treatments
  • Eyeglasses/eye surgery
  • Hearing aids
  • Home care
  • Long-term care expenses
  • Medicines (prescribed and not imported from other countries)
  • Nursing home
  • Nursing services
  • Optometrist
  • Oxygen
  • Stop-smoking programs
  • Surgery
  • Telephone equipment and repair for hearing-impaired
  • Therapy
  • Transplants
  • Weight-loss program (as prescribed by a physician for a specific disease)
  • Wheelchairs
  • Wig
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