The State of Benefits report from BenefitFocus shows that workers under the age of 26 are investing 20% more of their salary in HSAs than other generations. This is certainly due to the fact that nearly half have elected to enroll in high deductible health plans in 2017. While PPO plans remain very popular, especially among older adults, employee contributions to HSAs and FSAs are rising. A growing interest in savings among young people is another factor contributing to the increased popularity of HSAs.
The IRS and Department of Health and Human Services recently released new limits for contributions to HSAs and Health FSAs for 2017. Contributions by individuals to HSAs cannot exceed $3,400 in 2017, with the maximum family contribution remaining at $6,750, the same as 2016. Once again, a $1,000 catch-up contribution also applies.
Health FSA limits for 2017 have been increased by $50 from $2,550 per employee to $2,600. Health FSA transportation fringe benefits for parking, transit passes or vanpooling are remaining the same this year, with a limit of $255 for each.
The IRS began indexing affordability safe harbors to inflation last year. This year, minimum annual deductibles for High Deductible Health Plans (HDHPs) remain unchanged at $1,300 for individuals and $2,600 for families, with required out-of-pocket maximums remaining at a minimum of $6,550 for individuals and $13,100 for families.
The U.S. healthcare system is changing as many consumers are trying to be proactive, make financially smart and healthy choices and find more ways to get a better handle on costs. Taking charge of your health and saving money on medical expenses can truly begin with knowing how to talk to your doctors and medical providers. Here are tips to maximize communication:
- Write down the top problems you are experiencing to help your doctor focus on what to treat first.
- Bring a list of all current prescription medications as well as over-the-counter medications, vitamins or supplements and include dosage and how often you take them.
- Keep a handy record of recent test results, lab reports, surgeries and other relevant health information.
Costs should also be a part of every conversation and patients should be not be afraid to bring up the subject. While doctors are typically not afraid to discuss costs, they simply may not know exact costs or projected out-of-pocket expenses.
Another area of concern is the rising cost of prescription medications. If your doctor does not bring up a generic alternative, then you should. Here are ways to save on prescriptions:
- Skip chain drugstores and consider shopping at a warehouse store for lower prices.
- Go local to your neighborhood pharmacist and ask them to beat a competitor’s price.
- Know that some chain and big-box stores offer common generics at low prices for people who pay out-of-pocket and not with their insurance.
- Ask your pharmacist if any discounts, programs, cards or coupons could make your price lower.
- For long-term drugs, consider buying a three-month supply so you pay one co-pay rather than three.
Remember that walk-in clinics are suitable for common procedures like flu shots, sports physicals and minor injuries and they are always more cost efficient than emergency rooms. Staying healthy is still the optimal way to save money on healthcare, so take time for your own health. Know your blood pressure, pulse, cholesterol and family medical history and always make efforts to control weight.
Whether it comes as a shock or not, it’s a simple truth that the majority of employees don’t fully understand their health benefits. And, even if the benefit managers fully understand, sometimes they don’t have the tools to administer the kind of change needed to actually reduce healthcare costs.
Alithias is a platform that allows EBSO to give providers, employers and patients everything they need to take control of and better understand healthcare benefits. Sure, there are plenty of “transparency tools” out there that promise to make healthcare easier to understand and more affordable while also helping to engage employees. But, the people behind Alithias know that transparency tools have a utilization rate of less than 5%. That’s why Alithias is different – it offers features that truly help people “get it” and get the benefits assistance they need.
Compare Actual Prices
Something the average patient does not realize is that more than 30% of healthcare costs are “shoppable”. Alithias’ technology lets patients begin a search by first choosing a common medical procedure within a certain radius of their zip code. The search results then list options of available physicians or groups along with their location, average price for that chosen procedure and quality ratings. And, as if that weren’t simple enough, the patient will also see a detailed description of the procedure and the option to start a live chat with someone who’s ready to give them online support if they need it.
We believe that offering a personal relationship or live help might just be the only approach to ensure plan members seek appropriate care. Because, let’s face it, when people don’t understand their healthcare sometimes their only solution is to avoid it all together, especially when the fear of the unknown cost kicks in. Alithias uses assigned individuals, called Care Navigators, that are there to answer questions that patients don’t know the answers to and teach them what they need to know about healthcare, while also helping them find the best costs or the best doctors. With this kind of help, employees become more educated and involved in their own healthcare, ultimately making smarter decisions and saving on costs. In fact, the average savings for plan members using a Care Navigator is greater than $1,000 per procedure!
These are just two of the beneficial features Alithias can offer. If you’re struggling to give your employer groups and employees the benefits help they need, it’s time you talked to EBSO about Alithias.
The article below is from benefitsPro.com, written by Michael Levin on April 18, 2017.
Now that the American Health Care Act has failed to advance, small businesses, and the brokers who serve them, are looking for ways to manage health care costs within the status quo of the Affordable Care Act (ACA).
As it did with individuals, the ACA community rating methodology benefited some while burdening others. The community rating methodology spreads the costs associated with the differing risk of group (or individual) profiles over the entire risk pool. In the case of small groups, older and/or sicker groups benefited from lower rates while younger and/or healthier groups pay more. Those small groups for which this “peanut-buttered” risk solution has resulted in increases to their health insurance may want to look at level-funded plans, an alternative to fully-insured plans.
But what if the group has a really bad year? In a bad year, the stop-loss kicks in to protect the employer. Again, the entire concept of the level-funded plan is that the employer never has to pay more than the level monthly amount. But as an underwritten plan, it is reasonable to expect an increase — perhaps even an untenable increase — in the level-funded plan. Here is where it really gets interesting. Today, in such a situation, the group can simply revert back to a community-rated ACA plan. Here, small groups have an advantage that large groups do not: they can revert back to a non-underwritten plan; one that is likely to be to their financial benefit.
So, for small groups, the question is why not explore a level-funded plan? With savings of up to 30 percent, protection against extraordinary costs, and the ability to fall back on an ACA plan, there is very little reason not to do so.
Press Release from Education and the Workforce Committee Chairwomen Virginia Foxx on April 5, 2017.
The House today passed the Self-Insurance Protection Act (H.R. 1304), legislation that would protect access to affordable health care options for workers and families. Introduced by Rep. Phil Roe (R-TN), the legislation would reaffirm long-standing policies to ensure workers can continue to receive flexible, affordable health care coverage through self-insured plans. The bill passed by a bipartisan vote of 400 to 16.
“By protecting access to self-insurance, we can help ensure employers have the tools they need to control health care costs for working families,” Rep. Roe said. “Millions of Americans rely on flexible self-insured plans and the benefits they provide. Federal bureaucrats should never have the opportunity to limit or threaten this popular health care option. This legislation prevents bureaucratic overreach and represents an important step toward promoting choice in health care.”
“This legislation provides certainty for working families who depend on self-insured health care plans,” Chairwoman Virginia Foxx (R-NC) said. “Workers and employers are already facing limited choices in health care, and the least we can do is preserve the choices they still have. I want to thank Representative Roe for championing this commonsense bill. While there’s more we can and should do to ensure access to high-quality, affordable health care coverage, this bill is a positive step for workers and their families.”
BACKGROUND: To ensure workers and employers continue to have access to affordable, flexible health plans through self-insurance, Rep. Phil Roe (R-TN) introduced the Self-Insurance Protection Act (H.R. 1304). The legislation would amend the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code to clarify that federal regulators cannot redefine stop-loss insurance as traditional health insurance. H.R. 1304 would preserve self-insurance and:
- Reaffirm long-standing policies. Stop-loss insurance is not health insurance, and it has never been considered health insurance under federal law. H.R. 1304 would reaffirm this long-standing policy.
- Protect access to affordable health care coverage. By preserving self-insurance, workers and employers will continue to benefit from a health care plan model that has proven to lower costs and provide greater flexibility.
- Prevent bureaucratic overreach. Clarifying that regulators cannot redefine stop-loss insurance would prevent future administrations from limiting a popular health care option for workers and employers.
For a copy of the bill, click here.
For a fact sheet on the bill, click here.
Instead of preparing for the changes that were expected from the American Health Care Act (AHCA), employers now need to continue or resume their efforts to maintain compliance with the ACA. As House Speaker Ryan said, “I don’t know what else to say other than Obamacare is the law of the land. It’ll remain law of the land until it’s replaced,” he said. “We’re going to be living with Obamacare for the foreseeable future.”
Determining where we go from here seems to be anyone’s guess, but after watching the industry ebb and flow for decades, our best advice is to stay calm and carry on as self-funded health plans continue to cover an estimated 75% of the U.S. workforce.
ACA The Law of the Land
Until the Republican majority decides to try again or Obamacare implodes, as President Donald Trump and others say is inevitable, individuals and employers with 50 or more full-time employees will have to live with the Affordable Care Act. Many who thought the American Health Care Act (AHCA) meant the certain loss of coverage made possible by the ACA can breathe easier. Providers and employer groups, many of which have adopted self-funding in order to better cope with the added regulations of Obamacare, can take comfort in the fact that drastic change has been avoided, at least for the foreseeable future.
EBSO will be monitoring the events on Capitol Hill and will continue to provide updates as things arise. As always, thank you for being a valued Client and/or Business Partner.
While President Donald Trump has talked about several remedies for healthcare, one he mentions often is expanding the use of Health Savings Accounts (HSAs) – consumer directed accounts that are typically paired with high deductible health plans (HDHPs). Like flexible spending accounts (FSAs), they offer a convenient way to pay for out-of-pocket costs like doctor visit co-pays and other qualified medical expenses.
No Use It or Lose It Rule
One big advantage HSAs offer is that account balances are not subject to the Use It or Lose It rule that applies to FSAs – surplus funds can roll over from year to year. The IRS maximum annual contribution in 2017 is $3,400 for individuals and $6,750 for those with family coverage under a HDHP. Individuals age 55 and older can contribute an extra $1,000. HSAs can be used to pay for qualified medical expenses, while surplus funds can grow and be used in the future. Employer contributions, where available, can go a long way in meeting future qualified medical expenses. According to the 2016 Devenir HSA Market Survey, nearly a third of all funds contributed to HSAs in 2015 came from employers, with the average employer contribution being approximately $850.
A Triple Tax Advantage
A HDHP with an HSA can make it easy to set aside pre-tax dollars through payroll deductions. Individuals can also fund an HSA with after-tax dollars, which can be taken as a tax deduction on their personal tax return. Finally, all contributions accumulate tax free and can be withdrawn tax free to pay for future qualified medical expenses, including in retirement. No federal tax is due on funds contributed to a Health Savings Account, and many states follow the federal tax law.
Looking ahead, we know that healthcare costs will continue to rise and the need to engage employees will grow. Regardless of actions taken by the new administration, we believe HSAs are a great way to help employees save for future medical expenses and better understand the importance of cost and quality in the process.
Several proposals have recently circulated regarding alternatives to the ACA. But, last week the House of Republicans proposed legislation intended to repeal and replace certain elements of the Affordable Care Act, also known as Obamacare or the ACA. Their proposal has been named the American Health Care Act (AHCA).
The Health Care Administrators Association (HCAA) released an in-depth update late last week that details the changes the AHCA would impose as well as the aspects of the ACA that would remain unchanged. This overview was provided by the law firm of Quarrels & Brady LLP.
The American Health Care Act:
What It Means for Employers and Health Insurers
Employee Benefits Law Update | 03/09/17 | John L. Barlament, William J. Toman, Cristina M. Choi
After months – or maybe years – of speculation, on March 6 the House Republicans released proposed legislation intended to repeal and replace certain aspects of the Patient Protection and Affordable Care Act, known affectionately as Obamacare or the ACA. The proposal, somewhat generically named the American Health Care Act (AHCA), is trimmed down to fit into the Congressional reconciliation process to avoid a Senate filibuster. As the President tweeted the next day, there is more to come “in phase 2 & 3 of healthcare rollout.”
The AHCA proposes some major changes for the individual market and Medicaid, substantial changes in the employer market, and some minor changes to Medicare. Most prominently, the AHCA does away with the most controversial aspects of Obamacare, the individual and employer mandate. It also repeals the cost sharing and income-based premium subsidies available on the Obamacare exchanges, and replaces them with age-based tax credits designed to help individuals pay for coverage.
Almost more notable is what the AHCA does not repeal, presumably due at least in part to use of the reconciliation process. The AHCA does not repeal many of the more popular patient protections, such as the prohibition on pre-existing condition exclusions. It also doesn’t repeal many of the market reforms: the guaranteed issue and guaranteed renewal requirements, community rating rules (although there is a loosening of the age rating limitation), essential health benefit rules (other than for Medicaid), or the health insurance exchanges….
Click the image below to read the full article, which explains how this proposed legislation would impact employers, plan sponsors and health insurers.
Even though 2016 was considered the year of full implementation for the Affordable Care Act (ACA) employer mandate, changes keep coming. Here are a few points you will want to stay ahead of.
Small Employer Group Changes
The Protecting Affordable Coverage for Employers (PACE) Act, passed last fall, defines the small employer as having one to 50 employees. States, however, are permitted to elect to extend the definition of a small employer as up to 100 employees.
Even though the way businesses are categorized will now be a state-by-state decision, most are using the PACE Act definition. A few, including California and New York, have chosen to use 100.
Health Plan Transition Relief to Expire
Transition relief for the Employer Shared Responsibility payments for large employers with fully insured plans during the prior year will expire January 1, 2017. Depending on a plan’s eligibility and start date, applicable large employers (ALEs) must be compliant at some point this year or face penalties. Starting January 1, the non-calendar year transition relief expires and all ALEs will be required to offer compliant coverage. This does not apply to self-funded plans.
Grandfathered plans are also expiring in January 1, 2017. Fifteen states required the end of remaining grandfathered, non-ACA compliant plans this year, while the other 35 states will do so in 2017.
IRS Reporting Penalties
This year when employers completed Forms 1094-C and 1095-C, they were not assessed penalties for incorrect or missing data. Employers need to identify any issues with their reporting and plan ahead since that good faith effort has not been extended. They must set aside time for testing to correct any coding or processing errors. Employers should also consider avoiding the cost of printing and mailing by enabling employees to access Form 1095-Cs online.
Cadillac Tax Delayed to 2020
The 40% excise tax on the cost of health coverage exceeding pre-determined threshold amounts, which was initially intended to take hold in 2013, was delayed to 2018. Now it has been delayed to 2020 and while some think it will eventually become law because the revenue is needed to fund the Affordable Care Act, the IRS has again issued a request for comments.
Employers have several regulations to address and implement in order to remain compliant and avoid future penalties. As always, we are prepared to help our clients remain ACA compliant as regulatory changes continue to come our way.