Proposals on Many Wish Lists

self-fundingNow that the makeup of the new Congress has been decided, many employers are hoping Washington can work together to address a few of their important concerns. High on many lists, especially those belonging to large employers, would be doing away with the Cadillac Tax on high-cost health plans once and for all. While implementation has been delayed until the 2022 tax year, the law will require insurers and large employers to pay a 40% excise tax on the costs that exceed $11,100 for employee-only coverage and $29,750 for family coverage.

Other items that employers have been talking about for a long time include making HSAs considerably more user friendly and easing ACA reporting requirements to allow employee statements to be provided electronically rather than by mail.

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House Passes Two Bills to Expand HSA Coverage

United States Capitol Building

Yesterday, the House passed two bills that would expand HSA coverage:

The Restoring Access to Medication and Modernizing Health Savings Accounts Act of 2018 (HR 6199)

This Act would:

  • Allow plans flexibility in providing first dollar coverage up to $250 for a single and $500 for a family for additional services, such as those related to treatment of chronic conditions and telehealth services.
  • It would also make certain OTC drugs a qualified medical expense.
  • Allow HSA funds to pay for direct primary care up to $150 per month for an individual and $300 per month for a family.
  • Expand HSAs to allow physical activity, fitness and exercise related services (i.e., gym memberships, sports equipment) to be qualified medical expenses (up to $500 for an individual and $1,000 for a family).
  • It would also loosen some of the contribution restrictions on spouses who have a flexible spending account (FSA) at their employer.
  • Allow employees, at the employer’s discretion, to convert their FSA and HRA balances into an HSA contribution upon enrolling in a high deductible health plan with an HSA. The conversion amount is capped at $2,650 for an individual and $5,300 for family coverage.

Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018 (HR 6311)

This Act would:

  • Increase the maximum contribution to health savings accounts (HSAs) to $6,650 for an individual and $13,300 for a family.
  • Allow both spouses to make catch-up contributions to the same health savings account. Under current law, if both spouses are HSA-eligible and age 55 or older, they must open separate HSA accounts for their respective “catch-up” contributions.  This provision would allow both spouses to deposit their catch-up contributions into one account.
  • Allow working seniors enrolled in Medicare Part A to contribute to an HSA.
  • Allow individuals in a bronze or catastrophic health plan to contribute to an HSA.
  • Allow balances on flexible savings accounts to be carried over.
  • Allow HSAs opened within 60 days after gaining coverage under a HDHP as having been opened on the same day as the HDHP. This would give a grace period between the time coverage begins through an HDHP and the establishment of an HSA.  Currently, HSA funds can only be used for qualified expenses after the HSA has been established.
  • It would also delay the Affordable Care Act’s health insurance tax for another two years to 2021.

There are a handful of other healthcare related bills yet to be taken up by the House. It is unclear if they will act prior to the August break (beginning July 30th). Both of the above Acts will most likely be taken up by the Senate after the break.

Diversified Group will be following the progress of these bills closely and will provide updates as they are received.

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What’s Hot and What’s Not

self-fundingThe new year is a good time to look at the benefits larger companies are using to attract and retain good people. According to their 2017 Employee Benefits report, the Society for Human Resource Management tells us that HSAs, wholesale generic drug programs for injectable drugs, standing desks and genetic testing for chronic diseases are becoming popular. The report shows that 55% of businesses allow those with high deductible health plans to put part of their pay into an HSA tax free. This is up from 42% just a few years ago. 36% of employers now also contribute to workers’ HSAs. The percentage of employers covering genetic testing rose from 12% to 18% in just one year.

“Not so much” would describe dwindling interest in medical FSAs, long-term care insurance, mental health coverage and use of personal or life coaching. In other trends, daily casual dress has become the norm at 44% of surveyed companies and nearly 60% of companies now allow telecommuting.

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