Is an HSA right for you?

There are many variables that can affect the way you choose your health coverage, including your understanding of the options presented to you. Health savings accounts (HSA) are gaining popularity in health care as a cost-effective option for many people. However, each individual and family has their own needs and wants, so an HSA may not be right for everyone. A quick look at the pros and cons of these health plan options can help determine what works best for you.

HSA Advantages

  • Saves Money – For individuals who are generally healthy and have a good estimate of their annual health care expenses, money can be saved when paired with a high deductible health plan, which results in lower premiums. Ultimately, less money is coming out of your paycheck.
  • Transferrable – Even if you are terminated from your job or leave the position, you can keep your HSA through a change in jobs.
  • Tax Savings – When you contribute to your HSA account, you can experience triple tax benefits. You put money in tax free, you can withdraw it tax free for qualified medical expenses, and unspent dollars roll over each year making retirement savings possible.
  • Money doesn’t go to waste – Unspent funds don’t go to down the drain. Money is rolled over into the next year, helping with flexibility in your accounts as well.

HSA Disadvantages

  • Unpredictability – Even for healthy individuals, illness can come unexpectedly. This can make budgeting for the year difficult, and result in high out-of-pocket costs if a large medical expense comes your way.
  • Hesitant to Spend – Because HSAs can provide valuable tax advantages, many people may become hesitant to spend when there is a potential savings opportunity. This can result in people justifying skipping doctor’s visits or in getting the care they need as they want to avoid pulling from the account.
  • Penalties – If money is taken out of the account for something other than a qualified medical expense before the age of 65, you will owe taxes along with a 20% penalty. After the age of 65, you will owe taxes, but no penalty will be charged.

Ultimately, the final decision will vary for each individual and family. If you are healthy and have a general idea of your annual health expenses, the tax savings and other advantages could provide you with valuable benefits. On the other hand, older individuals who are more prone to illnesses or unexpected conditions could find a traditional plan more beneficial than going out on a limb attempting to budget for the year. At Faison Group, we would love to help you determine if an HSA is right for you or your employees, and we are glad to help you gain a better understanding of how they work. Feel free to Contact Us with any questions!

ACA Compliance Issues for 2017

The Affordable Care Act (ACA) has kept employers busy since its inception with changes to the health care industry. Many employers are struggling to keep up with the changes taking place year after year, resulting in administrative difficulties and penalties incurred. Certain changes to some ACA requirements begin to take effect in 2017 for employers sponsoring group health plans, such as increased dollar limits and maximum penalties for ACA reporting violations. So what should employers be on the lookout for in 2017?

Wellness

Corporate wellness programs have taken off in recent years. Employers are realizing the benefits of implementing wellness challenges and initiatives for employees to participate in and experiencing healthier employees (less doctor’s visits and sick days!). These programs are great, but it is important to be sure they are in compliance with EEOC’s final Americans and Disabilities Act.

Employer shared-responsibility

The compliance guidelines are ever-changing, so it is important to check your strategy and reporting to comply with any changes. Check whether the medical options meet minimum value, minimum essential coverage, and affordability standards. Some highlights for changes in 2017 include:

  • Cost-sharing limits
  • Coverage affordability percentages
  • Maximum penalties for ACA reporting violations

Preventive Care

Make sure your health plans comply with the final ACA rules on cost-free preventive. Preventive services like screenings or vaccinations are covered at no charge to employees under Obamacare, and other services like certain prescriptions or contraceptives should be reviewed in your plan for 2017.

A full Compliance Checklist for 2017 can be reviewed below, including expected changes for 2017 so you can come up with a compliance strategy that meets all the requirements. Our benefits experts would be glad to assist you, feel free to Contact Us!

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2017 ACA Compliance Checklist