Another recent proposal of the Trump Administration would allow employers to fund tax-exempted Health Reimbursement Arrangements to help pay for an employee’s individual health insurance premiums. In addition, the proposal would also allow employers that offer group health coverage to fund an HRA of up to $1,800 to reimburse employees for “qualified” medical expenses. Easing restrictions in this manner is seen by many as a big boost for small businesses that are unable to provide employer-sponsored healthcare. Comments are being accepted through December 28, 2018 and if approved, the new rules would apply for plan years beginning on or after January 1, 2020.
While it may not yet be widespread, some companies are looking for ways to use voice-activated assistants such as Siri and Emma to provide plan members with answers about annual contribution limits, account balances and other details regarding flexible spending accounts, HSAs, HRAs and more. Many hope that linking these intelligent assistants to a mobile app will make it easier than ever for members to get answers to questions when they need them.
If your health plan is like most, finding ways to help members manage healthcare expenses is a top priority. Offering one or more tax advantaged healthcare spending account can help.
Health Savings Accounts (HSAs) – Employers and employees can contribute to an HSA tax free and funds can roll over from year to year. To qualify, a compatible health plan must have a minimum annual individual deductible of $1,300 or $2,600 for a family. All contributions count towards the annual maximum, which is $3,350 for individuals and $6,750 for a family. Catch-up contributions of $1,000 are allowed at age 55 or older.
Health Reimbursement Accounts (HRAs) – Like an HSA, this account can be used before a deductible is met and no minimum plan deductible is required. Unlike HSAs, only the employer can contribute; the account is not portable and the employer can approve a rollover provision.
Flexible Spending Accounts (FSAs) – Section 125 FSAs allow employees to defer part of their income to pay for medical expenses. Both the employer and employee can contribute, but the amount employees pledge to contribute cannot change during the year. If a required provision is in place, up to $500 can roll over to the next year.
The features of these accounts vary somewhat. HSAs offer great flexibility to the employee without an administrative burden for the employer. HRAs do not require a qualifying high deductible health plan, but only employers can contribute. FSAs allow the employee to contribute pre-tax dollars, but the use-it-or-lose-it requirement can be a disadvantage. For help in determining which option is most appropriate for your group, talk with your Third Party Administrator.