|What Employers Should Know About the Grace Period
March 15 marks the Health Care Reimbursement Account (HCRA) grace period deadline for plan years ending December 31, 2014. This is the last day that participants can use their 2014 funds. Review your plan document to see if you allow for the grace period or not.
If your plan does offer a grace period, here are some tips to encourage participants to spend their remaining 2014 FSA dollars by March 15:
- Keep tack of the balance. If participants are unsure how much they have left in their HCRA account, encourage them to contact the administrator. If Tri-Star is your administrator, employees can login to their accounts here.
- Explore Eligible expenses. A list of eligible expenses can be found on our website but if you have any other restrictions on eligible expenses, make sure you communicate that to your participants.
- Shop for products. Over The Counter (OTC) health products like first-aid kits, contact lens solution, and bandages are covered by the HCRA. Refer to our OTC Quick Reference Guide for more information.
- Pay for medical services. Remind participants that their funds can be used to pay for co-pays, deductibles, and co-insurance when visiting doctors, dentists and even chiropractors.
Encourage participants to use their funds before it is too late! Just remember, if you opted to adopt the $500 Rollover provision, there will not be a grace period. Again, not every plan allows for the grace period, so check with your administrator before you communicate this to employees.
How Can Your Benefits Department Prepare for Employee CDHP Questions?
This rise of consumer-driven health plans comes with good reason, too. According to the recent Kaiser Family Foundation 2014 Employee Health Benefits Survey, average health insurance premiums have skyrocketed in the past 10 years ($9,950 in 2004 to $16,834 in 2014), and consumer-driven health plans help both employers and employees to control these costs.
This move, however, does create a fair amount of confusion and frustration for employees, and even if employees adopted your company’s high-deductible health plan en masse, questions will undoubtedly arise when they try to use their plan.
While your benefits team may not be the first point of contact for employees, concerns will reach you, and preparation is key.
A major point, according to Workforce Magazine, is that education is no longer the number one concern. Although you should offer educational resources, employees at this time don’t want HDHP education—they want specific questions answered and concerns alleviated.
From point of service sticker shock to HSA and preventive care confusion, you should focus your time and energy as a benefits department on managing the following concerns:
Point of Service Perplexity:
With HDHPs, employees may experience sticker shock, especially when seeing what used to be a $20 prescription jump to $130.
- Remind employees that prescription spending does apply to deductible
- Provide use of a transparency tool, promoting it as a healthcare shopping service
- Promote prescription drug comparison tools
Early year confusion may have already began for your department, especially if employees weren’t prepared to see that there is no money in their accounts. Brief employees on this by communicating the following:
- Promote all of the HSA resources you made available to employees during open enrollment.
- Simplify and shorten your HSA education resources into easily digestible information.
- Time your messaging based upon common concerns.
Preventative Care Coverage Confusion:
100% covered preventive care, helping your employees to stay healthier and detect disease before it becomes a major concern. The major concern, however, is when the bill comes for treatment. Brief employees, remembering the following tips:
- Remind employees that while preventive care (example: Diabetes Screening) may be free, treatment will not be.
- Drive home the value of covered care in real dollar values.
When something looks like a bill, but is not, employees are bound to get frustrated—especially when there are words like not covered right next to prices. Even if these come from the provider, be prepared to answer questions if they arise.
- Explain the value of lower premiums
- Consult with providers to see if they prepared any "How to read our EOB" documentation.
- Be ready to explain how deductibles and maximum out of pocket limits are met.
Excise Taxes on Small Businesses Employer Payment Plans Delayed Until July 2015
The IRS announced that it will delay imposing excise taxes on small businesses that have paid for or reimburse their employees for the cost of buying individual major medical health insurance policies. Employers with fewer than 50 employees that continue to offer an employer payment plan (including HRAs, cafeteria plans, direct pay or reimbursement arrangements) that reimburses individual major medical premiums could have been subject to excise taxes of $100 a day per employee and up to $36,500 per year.
In the New Notice, the IRS indicates that small businiesses will not be subject to those excise taxes until July 1, 2015, providing them additional time to determine how to move forward without facing penalties. No relief is provided to stand alone HRAs that did not reimburse individual major medical premiums or stand alone FSAs.What used to be a simple, two-prong decision—HMO vs. PPO—has grown to a much more labor intensive and research demanding decision. For the roughly 149 million nonelderly Americans covered under employer-sponsored insurance, the selection of health benefits has moved from dilemma to complex decision, as many more options exist for consumers to pick what matters most to themselves and their families—consumer driven healthcare.
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