Author Archives: Eric Walters

Which changes to report to the Marketplace!

 

You should report the changes listed below to the Marketplace as soon as possible.

Ready to report changes? Log in to your account.

Changes to report

  • Changes to your expected income for the year
  • Changes in health coverage:

o   Someone in your household getting an offer of job-based insurance, even if they don’t enroll in it

o   Someone in your household getting coverage from a public program like Medicaid, the Children’s Health Insurance Program (CHIP), or Medicare

o   Someone in your household losing coverage, like job-based coverage or Medicaid

  • Changes to your household or individual members:

o   Birth or adoption

o   Placing a child for adoption or foster care

o   Becoming pregnant

o   Marriage or divorce

o   A child on your plan turning 26

o   Death

o   Gaining or losing a dependent some other way

o   Moving to a permanent address in your state.

o   Change in disability status

o   Change of tax filing status

o   Change of citizenship or immigration status

o   Change in status as an American Indian/Alaska Native or tribal member

o   Incarceration or release from incarceration

 

 

For further information call:  Eric Walters

Cell: 602-616-1660

WEB: www.ewconsultant.biz

HSA’s to cover more health benefits

U.S. Rep. Mike Kelly (R-PA) hopes to make health care more affordable for Americans by giving their employers better benefit options to offer them under improved Health Savings Accounts (HSAs).

Rep. Kelly on March 1 introduced the Bipartisan HSA Improvement Act, H.R. 5138, which would improve access to health care through updated HSAs, according to a summary provided by his office. The bill was co-authored by U.S. Rep. Earl Blumenauer (D-OR) and includes cosponsors U.S. Reps. Erik Paulsen (R-MN) and Brian Fitzpatrick (R-PA).

“With so many people increasingly choosing HSA plans, it is important that federal rules allow employers to provide the best benefits possible for their employees,” said Rep. Kelly. “By modernizing HSA policy, this bipartisan bill will promote flexibility, encourage innovation, and expand access to these cost-saving plans for many more Americans.”

An HSA is a type of savings account that allows a person to set aside money on a pre-tax basis to pay for qualified medical expenses. Using untaxed HSA dollars to pay for deductibles, copays and other expenses allows people to lower their health care costs, according to the U.S. Centers for Medicare and Medicaid Services. Currently, more than 20 million Americans are enrolled in HSA-qualified plans, Kelly said, which puts them “in the driver’s seat of their health care, helping them save money and stay healthy.”

Among other provisions in the proposed bill, H.R. 5138 would allow HSA plans to offer HSA dollars that people could use for wellness benefits, including exercise; and to offer pre-deductible coverage for medication and services that help manage chronic conditions, and for health services provided at both onsite employee clinics or retail health clinics, according to the summary.

“By expanding access to affordable care, promoting wellness and strengthening innovation, this legislation will help Americans stay healthy while saving money,” Rep. Blumenauer said.

H.R. 5138 has been referred to the House Ways and Means Committee for its consideration.

2018 Family HSA contribution reduced!

IRS announces 2018 family contribution changes for HSAs

Today, the IRS published Internal Revenue Bulletin (IRB) 2018-10 that contains Revenue Procedure (Rev. Proc.) 2018-19.

Effective for calendar year 2018, the family contribution limit for HSAs has been lowered to $6,850 from the previously set amount of $6,900. This change came as a result of the tax reform law (P.L. 115-97) that changed the annual inflation adjustment factor from the Consumer Price Index (CPI) to a new factor known as ‘chained CPI’. This change was anticipated to slow the rate of changes in all programs under the tax code, including HSAs.

For any further information call:  Eric Walters

Cell: 602-616-1660

WEB: www.ewconsultant.biz

ACA Bog site: www.azhealthinsuranceblog.com

 

Trump admin to change 90 day Short Term Medical rule!

Trump Administration to abandon 90-Day Ruling for Short Term Medical coverage!

Proposed rule to allow short-term, limited-duration insurance for longer periods providing increased choice at a lower cost

In direct response to President Trump’s October 2017 Executive Order, the Departments of Health and Human Services (HHS), Labor, and the Treasury (the Departments) issued a proposed rule today that is intended to increase competition, choice, and access to lower-cost healthcareoptions for Americans.

The rule proposes to expand the availability of short-term, limited-duration health insurance by allowing consumers to buy plans providing coverage for any period of less than 12 months, rather than the current maximum period of less than three months. The proposed rule, if finalized, will provide additional options to Americans who cannot afford to pay the costs of soaring healthcare premiums or do not have access to healthcare choices that meet their needs under current law.

Short-term, limited-duration insurance, which is not required to comply with federal requirements for individual health insurance coverage, is designed to provide temporary coverage for individuals transitioning between healthcare policies, such as an individual in between jobs, or a student taking a semester off from school.

This announcement builds on the President’s October 2017 Executive Order 13813, “Promoting Healthcare Choice and Competition Across the United States,” which directs the Departments to consider proposing regulations or revising guidance to expand the availability of short-term, limited-duration insurance and allow it to cover longer periods.

The Departments published a final rule in 2016, which restricted short-term, limited-duration insurance to less than three months. Key stakeholders, including state regulators, have expressed concerns that the current limit could cause harm to some consumers, limit consumer options, and have little positive impact on the risk pools in the long run.

Today’s proposed rule would address these concerns by reverting to the previous definition of short-term, limited-duration insurance which permits coverage for nearly a full 12 months.

The link to the proposed rule can be found here: https://www.federalregister.gov/documents/2018/02/21/2018-03208/short-term-limited-duration-insurance,

Comments on the proposed rule are being accepted now.

Contact:  Eric Walters

WEB: www.ewconsultant.biz

CELL: 602-616-1660

Email: ewinsurance@gmail.com

 

 

 

 

New Tax Bill & Individual Mandate

December 20, 2017

Tax Reform Bill Includes Repeal of Individual Mandate Beginning in 2019

On Dec. 20, Congress passed the Tax Cuts and Jobs Act, which makes significant changes to individual and corporate provisions of the U.S. tax code, including a reduction in the corporate tax rate to 21%, down from 35%, beginning in 2018.

The bill includes permanent effective repeal of the Affordable Care Act (ACA) individual mandate, requiring individuals to purchase and maintain health coverage, by zeroing out the penalty beginning in 2019.

For 2018, most individuals are still required to maintain coverage or pay a penalty when they file their 2018 federal income tax return.

The bill was negotiated by a conference committee comprised of representatives from both the Senate and House after each chamber passed their own versions of tax reform. The final bill was passed 51-48 by the Senate and 224-201 by the House before being sent to the President. President Trump is expected to sign the bill into law soon.

The bill also changes how certain tax thresholds will be indexed for inflation. Affected provisions, including the ACA “Cadillac” Tax (scheduled to take effect in 2020), will now be indexed to the Chained Consumer Price Index (CPI) instead of the regular CPI (the previous metric). That change makes it likely that more employer-sponsored plans would trigger the Cadillac tax sooner.

Phoenix Tops US in population growth!

Phoenix Tops US in Population Growth

 Article originally posted on Phoenix Business Journal on May 25, 2017

Phoenix is tops in the U.S. for population growth, according to new data from the U.S. Census Bureau.

Phoenix added 32,113 persons to its population between July 2015 and July 2016. That’s more than any other city in the U.S.

Los Angeles added 27,173, San Antonio 24,473 and New York 21,171 persons during the same time frame, according to the Census data. The population data is for cities and not metro areas.

That is good news for the real estate industry, home and apartment builders and business recruiters. It also shows the Phoenix market is getting back to pre-recession norms after the last real estate and economic crash.

Population growth stalled during and right after the recession.

The Phoenix metro area and Arizona as a whole have long depended on population growth to fuel construction, retail and restaurants and business services. A larger population also means Phoenix is in line for more federal funding for transportation, infrastructure and security dollars for programs based on population.

The city of Phoenix is expanding its Metro light rail system and also wants to bring more residents to its downtown core. A growing population can help convince developers and builders to do that.

The city of Phoenix’s population now totals more than 1.6 million persons. That ranks fifth among U.S. cities and ahead of Philadelphia (1.57 million).

New York is the largest U.S. city at 8.5 million followed by Los Angeles at 3.98 million and Chicago with 2.7 million.

The Phoenix metro area has 4.66 million persons. That ranks 12th nationally.

Maricopa County also topped the list of U.S. counties for population growth during the same time frame.

Lee McPheters, an economist with Arizona State University’s W.P. Carey School of Business, is projecting 2 percent population growth for the Phoenix metro this year. That comes after 2.1 percent growth in 2016 and 2 percent in 2015. A growing population certainly shows economic attractiveness and strength and appeals to employers looking for workers, home and apartment builders as well as real estate investors.

The Valley’s large labor pool is attractive to back-office and call centers and distribution hubs.

JPMorgan Chase & Co. (NYSE: JPM), Amazon.com Inc. (Nasdaq: AMZN), Bank of America (NYSE: BAC) and Wal-Mart Stores (NYSE: WMT) all have large operational footprints in the Phoenix market.

The West Valley city of Buckeye also ranks as one of the fastest growing U.S. cities posting 4.8 percent growth between July 2015 and July 2016. Buckeye has 64,629 residents, according to the Census Bureau.

That growth ranks Buckeye seventh nationally. Conroe, Texas near Houston had the highest growth at 7.8 percent. Frisco, Texas near Dallas was second with 6.2 percent population growth.

Overall most of the population growth in the U.S. is in the South and West.

“Overall, cities in the South continue to grow at a faster rate than any other U.S region,” said Amel Toukabri, a demographer with the Census Bureau. “Since the 2010 Census, the population in large southern cities grew by an average of 9.4 percent. In comparison, cities in the West grew 7.3 percent, while cities in the Northeast and Midwest had much lower growth rates at 1.8 percent and 3 percent respectively.”

Arizona Senate approves bill to fight surprise medical billing!

The Arizona Senate approved SB 1441 on Wednesday, which would allow patients to challenge an unexpected medical bill after an emergency room visit, according to the Arizona Daily Sun.

Under current Arizona law, patients do not have any type of support to fight insurance companies that refuse to pay for procedures or services a patient received from out-of-network physicians.

SB 1441, authored by Sen. Debbie Lesko (R-Peoria), would allow patients to ask the Arizona Department of Insurance to intervene in cases where patients feel they are being unfairly charged, according to the report.

State intervention, however, would only be available in cases where patients could not check prior to the procedure whether a physician was in or out-of-network.

Arbitration will be available if a healthcare provider does not disclose upfront whether it is considered in-network, charges more than the estimated total cost and does not give the patient a chance to waive their rights to dispute the bill, according to the report.

Sen. Lesko said under SB 1441, patients would only be responsible for the normal co-pay amount and the deductible, in most situations. If the patient agrees ahead of time to a specific out-of-network cost, the legislation will not be applicable, according to the report. However, if the medical bill ends up being more than the agreed upon amount, the patient will have access to the procedure outlined in the legislation.

The Department of Insurance will have until 2019 to create the procedure for the review process if the legislation passes.

Eric Walters Insurance Services

Scottsdale, Az 85260

CELL: 602-616-1660

WEB: www.ewconsultant.biz

Obamarcare vs Trumpcare-now we know!

The major differences between the 2 health plans before the Senate has reviewed the Trump proposals.

Individual Mandate: (X Repeal)

Obamacare: All Americans are required to have health insurance or pay a tax penalty.

Republican plan: The mandate is repealed, but individuals who forgo health insurance for more than 63 days must pay a 30% surcharge on their insurance premiums for a year.

Employer mandate (X Repeal)

Obamacare: Companies with more than 50 employees are required to offer health insurance or pay a penalty.

Republican plan: This mandate is repealed.

Taxes (X Repeal)

Obamacare: Raised Medicare taxes on the wealthy and imposed new taxes on medical devices, health insurers, drug companies, investment income, tanning salons and high-end health insurance plans.

Republican plan: Repeals most Obamacare taxes and delays implementation of the tax on high-end health insurance plans to 2026.

Insurance for dependents√ Keep)

Obamacare: Requires insurers to allow children under age 26 to be covered by their parents’ policies

Republican plan: Maintains this requirement.

Essential health benefits (… Change)

Obamacare: Requires all insurance plans to cover certain health conditions and services, such as emergency room visits, cancer treatment, annual physical exams, prescription drug costs and mental health counselling.

Republican plan: Allows states to define what benefits are mandated or opt out of the requirement entirely.

Pre-existing condition coverage… Change

Obamacare: Prohibits insurers from denying coverage or charging more to individuals who have pre-existing medical conditions.

Republican plan: States can let insurers charge as much as they like to sick people. Allocates $8bn to help subsidise those patients.

Medicaid (… Change)

Obamacare: Expanded Medicaid health insurance for the poor to cover more low-income individuals.

Republican plan: Phases out Medicaid expansion to reduce federal funding on the programme by $880bn over the next decade, and gives states greater flexibility in administering the programme in exchange for fixed federal spending.

Women’s healthcare (… Change)

Obamacare: Insurance companies prohibited from charging women more than men for the same health plan and must provide core services including maternity care and contraceptives.

Republican plan: Insurance companies still banned from charging women more, but states could allow insurers to drop maternity care and contraceptives from basic benefits. Also bans women from using federal tax credits to buy a plan that covers abortion.

Older Americans (… Change)

Obamacare: Insurers can charge older Americans no more than three times the cost for younger Americans

Republican plan: Insurers can charge older Americans five times as much as younger Americans. States would also be able to set their own ratio.

Subsidies (… Change)

Obamacare: Provided refundable tax credits for low-income individuals who purchased their insurance on government-run marketplaces and support for some out-of-pocket medical expenses.

Republican plan: Alters formula for tax credits, which will expand the benefit to more middle-class Americans but probably raise the costs for some elderly and less-affluent individuals.

05/08/2017

All types of individual and group (employee benefits) health plans available  including alternative coverage with new innovative plans with and without employer contribution!

**********************************

 Eric Walters

 Insurance Services

 Scottsdale, Arizona

CELL: 602-616-1660

 WEB: www.ewconsultant.biz/

ACA Blog: www.azhealthinsuranceblog.com

2018 Health Enrollment period- changed!

CMS Officially Shortens 2018 Individual Health Enrollment Period(before an GOP changes)

A new final rule also includes tougher enrollment eligibility screening
President Donald Trump’s administration has formally adopted regulations that could help increase the stability of the individual major medical insurance market, and the Affordable Care Act exchange system, in 2018.

One big change in the new package of regulations will move the end of the open enrollment period for 2018 individual major medical coverage to Dec. 15, 2017 from Jan. 31, 2018.

The Centers for Medicare & Medicaid Services (CMS), the agency that put out the packet of regulations, also has made a final decision to:

• Require all consumers who apply for “special enrollment periods,” or exceptions to the usual individual major medical open enrollment period deadline, through HealthCare.gov to provide documents showing they qualify for SEPs before they get health coverage in place.

• Let states that have shown they take evaluating health provider networks seriously continue to set provider network adequacy standards for the exchange plans in their states.

• Give exchange plan issuers a little more wiggle room when it comes to meeting ACA health plan actuarial value standards.
CMS began formal work on the new regulations after Trump took the oath of office, but they appear to reflect changes that CMS officials began to develop while Barack Obama was still president.

CMS assumes in the regulations that existing laws, regulations and batches of informal guidance related to the ACA exchange system and ACA individual major medical rules will stay in place.

The ACA has blocked health insurers from considering personal health factors other than age and location when issuing coverage, pricing coverage or designing benefits since Jan. 1, 2014.

Regulators, insurers and ACA exchange plan managers developed the open enrollment period calendar, or limits on when people can buy individual health coverage without showing they have what the government classifies as a good reason to do so, to discourage healthy people from waiting until they get sick to pay for coverage.

In the past, health insurers and patient advocacy groups have clashed over whether some consumers were abusing the system in ways that helped those consumers wait until they got sick to pay for coverage.
CMS officials said in the introduction to the new final regulations that they believe the shorter 2018 enrollment period and tighter SEP eligibility verification rules will improve the quality of the risk pool and help persuade insurers to stay in the individual market.

Seema Verma, the newly confirmed Trump CMS administrator, said in a statement included with the CMS announcement about the new final regulations that CMS is “committed to ensuring access to high quality affordable health care for all Americans.”
The changes made in the new regulations “will help stabilize the individual and small-group markets,” Verma said. “They are not a long-term cure for the problems that the Affordable Care Act has created in our health care system.”

CMS officials acknowledged in a discussion of the new regulations that the SEP verification requirements could cause problems for some consumers who cannot obtain the documentation required.

“Therefore, we will permit consumers to send us the details about their qualifying event with an explanation of why they are unable to submit requested documentation, and we will take their letters into consideration when deciding whether to exercise reasonable flexibility,” officials said.

5/3/2017

NOTE: These changes are before any GOP changes/repeal of Obamacre.

Eric Walters – Insurance Services.
Scottsdale, Arizona
Cell: 602-616-660
Email: eric@ericwaltersinsuranceservices.com
ACA Blog: www.azhealthinsuranceblog.com
WEB: www.ewconsultant.biz

Small Business HRA & Special Enrollment Periods.

Special Enrollment Periods and the Small Business HRA

The 21st Century Cures Act reintroduced the stand-alone Health
Reimbursement Arrangement
 (HRA) for small businesses, making it possible for them to offer health benefits they may not have been able to afford otherwise. But implementing this new type of plan, known as the Small Business HRA, can be difficult for businesses whose employees don’t have health coverage.

Because the open enrollment period ended January 31, 2017, businesses that want to start offering the Small Business HRA must consider whether making a change outside an open enrollment period would negatively impact their employees.

Transitioning from a Group Health Policy

If your company is transitioning from group health insurance to the Small Business HRA, your path is simpler. First, you have to cancel your group health. This will trigger a special enrollment period, during which your employees can enroll in individual coverage and immediately begin using the Small Business HRA.

You must also comply with the notice requirements of the 21st Century Cues Act:-(The Small Business HRA allows companies with fewer than 50 employees to reimburse individual health insurance premiums and qualified medical expenses for their employees, as well as their employees’ spouses and dependents. Alongside the benefits of a Small Business HRA come a few responsibilities, howeverincluding a requirement that companies offering the benefit provide a 90-day notice to their employees every year.)
This approach allows all employees to begin taking advantage of the Small Business HRA immediately.

If You Don’t Have a Current Policy

Fewer than half of small businesses offer group health insurance to their employees. If your business doesn’t offer a group health policy, it’s more difficult for the Small Business HRA to deliver immediate value to your employees.

Currently, implementing a Small Business HRA midyear doesn’t qualify employees for a special enrollment period. That means only employees with existing minimal essential coverage, whether through their own individual policy or a spouse’s plan, will be able to access Small Business HRA funds prior to open enrollment.

Employees currently without coverage will need to wait until the next open enrollment period, or another qualifying life event, to buy a policy and begin taking advantage of the Small Business HRA.

Additionally, the individual market doesn’t include new hires among the conditions that trigger a special enrollment period, which means employees hired midyear aren’t permitted to participate in the Small Business HRA until the next open enrollment period.

However, if the new hire is losing group health insurance through their previous employer, they will qualify for a special enrollment period. This means they will be able to enroll in new individual health insurance and begin accessing HRA funds.

Overall, if you’re adopting the Small Business HRA after offering no health benefits, only employees enrolled in prior coverage will immediately benefit from the HRA.

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Many factors go into a company’s decision to implement the Small Business HRA. If you’re thinking about making the change outside of an open enrollment period, it’s important to consider how doing so will affect your employees and whether they can take advantage of the benefits right away. In some cases, waiting until all employees are eligible to enroll in coverage under the Small Business HRA may be the better choice.

 Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

WEB: www.ewconsultant.biz

 

 

 

Can I Still Make Changes to My Individual Health Insurance Plan?

Can I Still Make Changes to My Individual Health Insurance Plan?

We’ve passed the enrollment deadline for coverage beginning January 1, but that doesn’t mean you can’t still choose or change your plan. Open enrollment for individual health insurance on the ACA Marketplace began on November 1, 2016, and continues through January 31, 2017. Signing up in January means your coverage won’t begin until March 1, but that policy will be guaranteed for the remainder of the calendar year.

If you’ve already enrolled in an individual health insurance plan, but are realizing it’s not quite what you expected, you can still switch plans. The final open enrollment deadline also includes making changes to your selection. When doing so, be sure to research whether your doctors and prescriptions are covered. You can do this by clicking on each plan and looking at the formulary and network options.

What Happens If I Miss the Deadline?

If you miss the January 31, 2017, deadline, you won’t be able to sign up for individual health insurance until the next open enrollment unless you qualify for a special enrollment period.

What Is a Special Enrollment Period?

A special enrollment period is a time frame during which a person is allowed to sign up for individual health insurance outside of the designated open enrollment period. To be eligible for special enrollment, you must go through a qualifying life event, such as losing your existing health coverage (such as through being laid off, being fired, or quitting your job), moving, getting married (or divorced), having a baby, or adopting a child.

How Do I Know Which Individual Health Insurance Plan Is Best?

Individual health insurance is not a one-size-fits-all item. Which plan is best for you and your family is dependent upon your unique needs, budget, and health risk.

For example, high-deductible health plans (HDHPs) are often best suited for young people who rarely see the doctor and do not require many prescriptions, as all expenses are paid out of pocket until you’ve met the deductible. These plans typically save you money on monthly premiums and are sometimes referred to as “catastrophic only.”

Health Maintenance Organizations (HMOs) are usually more affordable plans (with fewer out-of-pocket expenses), but frequently come with narrow networks and restrictive formularies. If you are looking for a baseline insurance plan and do not mind switching doctors, this may be a good fit for you.

By contrast, people who would like to keep their doctors, are taking multiple prescriptions, or are managing a chronic health issue may want to choose a Preferred Provider Organization (PPO) or Point of Service (POS) plan. These plans have higher monthly premiums, but generally come with larger networks and formularies than HMOs.

???????

If you still haven’t made a decision about your 2017 individual health insurance, there is still time. In addition, if you would like to change your plan, you may still do so.

 

 

 

Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

WEB: www.ewconsultant.biz

Tax Time- How to report Small Business Health Insurance.

How to Report Small Business Health Insurance at Tax Time

The Affordable Care Act (ACA) has added some additional paperwork to the tax-filing process. Employers offering small business health insurance are required to provide forms to both employees and the Internal Revenue Service (IRS). Here is an overview of forms required from employers, as well as which forms employees can expect to receive.

For Small Employers: The Small Business Health Insurance Forms You Need

Employers with fewer than 50 full-time-equivalent (FTE) employees are not required to offer small business health insurance. However, if you provide self-funded (or self-insured) coverage, you must fill out Form 1095-B for each employee. It is similar in both content and purpose to Form 1095-C.

You will need to file a copy of these forms with the IRS, as well as Form 1094-C, following the same deadlines as large employers (February 28 or March 31, respectively).

For Large Employers: The Forms You Need

Applicable large employers are required to provide Form 1095-C to employees by March 2, 2017. This form details which members of each employee’s family were included in the group policy for 2016, in which months they were covered, and how much the policy cost them.

These forms (one for each employee) will also need to be filed with the IRS, in addition to Form 1094-C, which provides an overview of the company’s health coverage. If you are filing by mail, this must be completed by February 28. If filing electronically, your deadline is March 31.

For Employees: The Forms You Need at Tax Time

If you purchased health coverage through the ACA Marketplace, you will receive Form 1095-A from your insurance Marketplace. If you received a premium tax credit, you will need to fill out and file Form 8962 when you complete your taxes. It is important to note that premium tax credits prevent you from using Form 1040-EZ. You will need to use the traditional 1040 or 1040-A.

If you have small business health insurance through your employer, you will receive a 1095-B from them by March 2. If your employer has more than 50 FTEs, you will receive a 1095-C.

If this all seems a bit overwhelming, don’t worry—you will not have to fill out the 1095 forms yourself. The 1095s are completed by whoever provides your insurance coverage. If you had more than one type of coverage in 2016, you will receive a 1095 from each employer or insurance company.

Many people like to file their taxes in early February so they receive their returns earlier. The good news is that you do not need to wait to file your taxes until you’ve received these forms—unless you are receiving a subsidy. In that case, you need to wait until you’ve received Form 1095-A from the Marketplace.

Conclusion

While all these forms can seem overwhelming at first, they aren’t overly complicated—but they are time-consuming for employers required to submit them. If you are confused or need assistance, be sure to consult with an accountant, who should be able to get things straightened out for you.

Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

ACA Blog: www.azhealthinsuranceblog.com

WEB: www.ewconsultant.biz

 

 

HRA’s and HSA’s-better together

Better Together: The Benefits of HSAs and HRAs

HSA and HRA. The two acronyms may be almost identical, but they stand for two very different types of plans. With an HSA, the employee owns the account. Money contributed to the HSA is tax-free, and withdrawals must be spent on qualified medical expenses. Since HSAs are owned by the employee, they are also portable. This means they move with the employee from job to job.

Read more: Health Savings Account Overview

In an HRA, the account is owned by the company, and the funds stay with the company if the employee decides to leave. In December 2016, Congress passed legislation that created an HRA specifically for small businesses. The Small Business HRA allows businesses with fewer than 50 employees to reimburse employees for individual health insurance premiums and eligible medical expenses also tax-free. With the Small Business HRA, businesses must offer reimbursements on the same terms to every employee, but they can vary these amounts based on family status.

When businesses offer an HSA in combination with an HRA, they give employees more choices and more control over their own health benefits. The combo appeals to businesses, too, as it allows them to control costs by fixing them through an HSA contribution and setting up an HRA in place of other small business health insurance options.

 How to Make Your HSA “HRA Qualified”

To have both an HSA and an HRA, the HRA must be adjusted to be compatible with HSA regulations. There are many ways to make this work, but two of the simplest are:

  1. Limited purpose HRA: Reduce the scope of what the Small Business HRA can reimburse.

  2. Post-deductible HRA: Reduce the scope of what the Small Business HRA can reimburse, until the HSA deductible has been met. Then reinstate the full list of medical expenses eligible for reimbursement through the HRA.

The expenses which can be reimbursed through the HRA before the HSA deductible has been met are the following: health insurance premiums, preventive services, dental and vision expenses, and long-term care premiums.

Conclusion

Businesses that offer an HRA can give their employees more flexibility, greater freedom of choice, and additional retirement benefits by adding an HSA to their employee benefits program. Once you understand the mechanics of HRAs and HSAs, it’s easy to see why using them together appeals to businesses and employees alike.

Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

WEB: www.ewconsultant.biz

 

 

Health Savings Accounts -hi deductible plans?

Health savings accounts (HSAs) have become a popular option for people who wish to have comprehensive individual health insurance while building up tax-free savings they can roll over from year to year. According to research firm Devenir, more than 16 million people had an HSA in 2015.

An HSA allows individuals to use tax-free funds to pay for medical expenses, doctors’ visits, prescriptions, and other qualified health expenses. In many cases, employers also contribute matching dollars.

Before you can contribute to your HSA, however, you must first be enrolled in a high-deductible health plan (HDHP). As the name indicates, HDHPs have a higher deductible than traditional insurance plans.

When Is an HDHP HSA Qualified?

Just because you have an HDHP, however, does not mean it qualifies for an HSA. In 2016, for example, just 19 percent of the HDHPs available on the federal exchange were HSA eligible.

High deductibles are not the only requirement for an HDHP to be HSA eligible. As defined by the IRS, HSA qualified HDHPs have:

  • A higher deductible than typical individual health insurance plans.
  • A maximum limit on the annual deductible and medical expense costs, including copays and other items.
  • No insurance coverage until the deductible is met, except for the following expenses:
    • Health insurance premiums
    • Wellness and preventive care (e.g., checkups, mammograms, smoking cessation, weight loss)
    • Expenses resulting from accidents
    • Dental expenses
    • Vision expenses

The IRS publishes minimum deductible and maximum medical expense limits annually. The chart below lists the annual HSA contribution limits and the HDHP minimum required deductibles for 2016 and 2017.

Contributions and out-of-pocket limits for HSAs and HDHPs
For 2016 For 2017
HSA contribution limit (employer + employee) Self only: $3,350Family: $6,750 Self only: $3,400Family: $6,750
HSA catch-up contributions (age 55 or older)* $1,000 $1,000
HDHP minimum deductibles Self only: $1,300Family: $2,600 Self only: $1,300Family: $2,600
HDHP maximum out-of-pocket amounts
(deductibles, copayments, and other amounts besides premiums)
Self only: $6,550Family: $13,100 Self only: $6,550Family: $13,100

* Catch-up contributions can be made at any time in the year the participant turns 55.

How to Tell If Your Plan Is HSA Eligible

If you’re new to HDHPs and HSAs, sorting through the various requirements can feel a bit like trying to read a bowl of alphabet soup.

If you’re overwhelmed, keep in mind that insurance carriers will label their plans as HSA eligible.

Other HSA Requirements

In addition to having an HSA-qualified insurance policy, there are several other requirements to contribute to your HSA in a given year:

  • You must be covered under an HDHP.
  • You must have no other health coverage, with the exception of several types of ancillary coverage.
  • You must not be enrolled in Medicare.
  • You cannot be claimed as a dependent on someone else’s tax return.

Conclusion

HSAs are an increasingly popular choice for people looking to manage the rising cost of individual health insurance. Because HSAs offer triple tax advantages, more and more people are likely to participate in the future.

Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

ACA Blog: www.azhealthinsuranceblog.com

WEB: www.ewconsultant.biz