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May 24, 2011

Maximum HSA Contributions to Rise Slightly for 2012

Filed under: Benefits,Insurance — Tags: , , , 10:34 am

The Internal Revenue Service (IRS) has released the maximum Health Savings Account (HSA) contribution amounts for 2012.  Under IRS Revenue Procedure 2011-32, the maximum contribution will increase as follows:

                                                           2011                             2012

  •  Single Coverage               $3,050                       $3,100
  • Family Coverage               $6,150                        $6,250

 Maximum out-of-pocket expense, including deductibles will also increase for 2012 as indicated blow:

                                                          2011                             2012

  •  Single Coverage                $5,950                   $6,050
  •  Family Coverage               $11,900               $12,100

 HSA’s must be linked with a high-deductible health insurance plan.  According to America’s Health Insurance Plans, about 10 million people were enrolled in this type of insurance plan, which was a 25% increase of 2009.  Enrollment figures for 2011 are expected to be released soon.


April 20, 2011

Weekly Wednesday Acronym – HSA

For those of you who work with benefits, you may be familiar with “Healthcare Savings Accounts” commonly referred to as HSA’s.  But you may find them somewhat confusing and difficult to explain to employees…or even your President & CEO as you consider options for medical insurance plan renewals.

What is an HSA?  In simplest terms, is a tax-free account that can be used by employees to pay for qualified medical expenses.  In order to have an HSA, the individual must meet the following eligibility requirements:

  • Must be covered by a High Deductible Health Plan (HDHP)
  • Must not be covered by other health insurance
  • Is not eligible for Medicare
  • Cannot be claimed as a dependent on someone else’s tax return

So why would it be of benefit for employees to have an HSA?

  • Money in the account earns interest and accumulates tax free so the funds can be used now and in the future
  • Contributions to do not have to be spent the year they are deposited (unlike a Flexible Spending Account)
  • If an employee changes jobs, they can take the account with them and continue to use it to pay for qualified healthcare expenses

Employers are somewhat split on their opinion of HSA’s.  Proponents believe they are a way to help reduce the growth of health care costs, as insurance premiums for HDHP plans are typically significantly lower.  Additionally, since the employee is paying for more medical expenses out of the HSA, they are being forced to consider treatment costs and alternatives more closely than with a traditional medical insurance plan.  However, other employers say they worsen, rather than improve, the U.S. health system’s problems as they may encourage healthy employees to leave insurance plans.   

In any case, it is an option worth considering and discussing with your insurance vendor / broker when it’s time for your annual medical insurance renewal.  And the best advice is always to stay healthy


December 3, 2010

HR Fact Friday: Senate Fails to Repeal Health Care Reform Law 1099 Rule

Filed under: Benefits,Insurance — Tags: , , 8:21 am

The Senate on Nov. 30 turned back the first legislative efforts to repeal a portion of the health care reform law.

Two amendments—one proposed by Finance Committee Chairman Max Baucus, D-Montana, and the other by Sen. Mike Johanns, R-Nebraska—to repeal a requirement that employers furnish 1099 statements if they do more than $600 in business with a corporate vendor—failed to win enough votes to be attached to a food safety bill. The Senate approved the food safety measure on Nov. 30.

Small employers have complained that the reporting burden of the health care reform law requirement, which is scheduled to go into effect in 2012, is too great. While there is broad congressional support for repealing the requirement, the amendments failed for reasons unrelated to the health care reform law, Washington observers say. Democrats, for example, were concerned about language in Johanns’ amendment giving new authority to federal regulators to cut government spending.

Despite the setback, new proposals to repeal the 1099 reporting requirements are expected soon.

The reporting requirement would raise about $2 billion a year, according to estimates by the congressional Joint Committee on Taxation.  

Source: Jerry Geisel of Business Insurance


September 10, 2010

HR Fact Friday: Reform Rule on Covering Adult Children Looms

Filed under: Benefits,Insurance — Tags: , , , 7:00 am

One of the first big pieces of health care reform legislation kicks in this month, when adult children up to age 26 must be covered by employed parents’ health insurance, regardless of student status. Previously, only dependents in college typically remained on their parents’ insurance plans after age 18, unless state law mandated coverage for older children who were not in school.

“This change is effective for plan years or plans that start on or after September 23, but many new plan years won’t start until January 1,” said Sarah Bassler Millar, a partner in the employee benefits and executive compensation practice group at Philadelphia-based law firm Drinker Biddle.

Some adult children already are being covered. In April, 66 health insurers agreed to a Department of Health and Human Services request to begin early enrollment of adult dependents who would have aged out of their existing coverage between April and either September 23 or a later starting date for a parent’s employer’s 2011 plan year. The agency wanted to prevent the cost and inconvenience of dropping adult children, providing interim COBRA coverage and then re-enrolling them. To comply with the eligibility expansion, employers must provide written notice of a 30-day open enrollment period for employees’ adult children.

Although eligibility expansion seems straightforward, the definition of a child raises questions. Many firms had extended dependent status to grandchildren, nieces and nephews based on residency with an employee. However, the new law doesn’t allow for that. Advocacy groups are asking for clarification. It’s not clear that we’ll get clarity by January 1.



September 3, 2010

HR Fact Friday: Long Term Care Benefits – A Less Visible Part of Healthcare Reform

Filed under: Benefits — Tags: , , , , , 7:17 am

The recently enacted Patient Protection and Affordable Care Act, otherwise known as healthcare reform is a complicated piece of legislation with many parts.

One part, that hasn’t gotten a lot of press, is the Community Living Assistance Services and Support (CLASS) Act.

CLASS creates a national voluntary long term care insurance program.   The program is set to begin in 2011.  The Department of Health and Human Services still needs to develop guidelines, so we don’t know much about it.   However, employers should begin to think about whether they’ll participate in the program and stay tuned as facts become available. The program is to be fully funded by employees and benefits will be available to employees after they have paid premiums for at least 60 months.

CLASS provides small supplementary benefits for in home care, and is not enough to pay for assisted living facilities or nursing homes.


June 21, 2010

New Healthcare Law Requires New W-2 Reporting Requirements

Filed under: Employment Law — Tags: , 1:49 pm

Recent healthcare reform will bring a lot of changes.  One of those is the new requirement that employers report the cost of employer provided health coverage on W-2s.  This new rule applies beginning in 2011 so employers will need to be prepared for its implementation in late December.  Costs for various plans must be reported, including: medical and drug plans, executive checkups, Medicare supplemental policies, on-site clinics, and EAPs.  Dental and vision plans are also included unless they are “stand alone” plans.  Flexible spending plans are excluded.   More information regarding how to value these plans, whether such valuations must occur monthly (it seems they must), and other important details is forthcoming from the government.   So, stay tuned for more developments.  And, in the next few months when you have nothing to do (like that ever happens) start figuring out how you’ll handle this requirement.


June 11, 2010

HR Fact Friday: Most Employers to Wait to Cover Adult Children

Filed under: Insurance — Tags: , , , , 8:38 am

Many companies do not intend to comply early with a provision in the new health care reform law that will require group health care plans to extend coverage to employees’ young adult children up to age 26, according to a survey released Tuesday, June 8.

Among the 501 large employers responding to a Hewitt Associates Inc. survey, 77 percent said they will wait until the effective date before offering the coverage. Ten percent of respondents said they will extend coverage early to all eligible adult children, 9 percent said they will continue coverage for graduating students already covered in their plans, and 4 percent were undecided.

The law requires the extension to be made on the first day of the plan year starting after September 23, 2010. For calendar-year plans, which are the most common, the effective date of the provision would be January 1.

Source: Jerry Geisel, Business Insurance, a sister publication of Workforce Management.


December 23, 2009

HR Fact Friday: Congress Approves COBRA Premium Subsidy Extension

The U.S. government gave thousands of unemployed workers an early Christmas gift when the Senate, in a rare session Saturday, December 19, approved a military spending bill that would extend federal COBRA health insurance premium subsidies for the unemployed.

H.R. 3326, which the House approved this week, cleared the Senate on an 88-10 vote.  President Barack Obama signed the bill Monday, December 21. The bill would extend the nine-month, 65 percent premium federal subsidy by six months. The change would apply to those who are involuntarily terminated through February 28, 2010.

Under current law, employees who lose their jobs after December 31 are ineligible for the subsidy.  The legislation also would provide another six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.  In addition, the legislation would give beneficiaries whose subsidy expired and who didn’t pay the full premium the opportunity to receive retroactive coverage. For example, a beneficiary whose nine months of subsidized coverage ran out November 30 and who didn’t pay the unsubsidized premium for December could pay his or her 35 percent share in January and receive COBRA coverage for December.

The legislation would require employers to notify current and future COBRA beneficiaries of the new 15-month premium subsidy.

The fate of the legislation has been followed closely by terminated workers—eager to know whether the subsidy will be extended—as well as employers who need to tell beneficiaries the COBRA premium they should pay.

The legislation makes clear that employers can offset future COBRA premiums or issue refund checks for beneficiaries who overpaid their COBRA premium. That could happen if a beneficiary whose subsidy ran out in November paid the full premium rather than the 35 percent share in December.

Source:, Jerry Geisel

p.s. Yes I know today is not Friday . . . because Christmas Day is on Friday I am posting this a bit early. Merry Christmas! PH


March 20, 2009

HR Fact Friday: Bright Spots Exist in Job Market

Filed under: Hiring & Jobs — Tags: , , , , , , 5:00 am

Glad to see some positive news in the March 2009 issue of HR Magazine in regard to employment prospects.  An article by Bill Leonard in the HR News section caught my attention because it actually found a bright spot in an otherwise dismal quarter of staggering  job losses. Mr. Leonard writes . . .

According to the U.S. Bureau of Labor Statistics, employment in the health care industry increased by 32,000 in December 2008, making it the only major private industry sector to add a significant number of jobs at year-end. The health care industry added mor than 370,000 jobs in 2008, surpassing all other private-industry categories.

Although demand for health care workers is strong in nearly every position, including managerial and administrative jobs, nursing outstrips all other occupations and is listed as the top “in-demand occupation” by the federal Career Voyages web site, a project of the U.S. departments of Labor and Education (see Top Ten list below).

The strength of the health job market isn’t enough to offset the massive job losses in sectors such as finance, manufacturing and retail. However, demand for skilled workers in information technology and green and renewable energy industries could help stabilize the job merket as the need for qualified workers in those sectors should remain strong, recruiting and industry analysts predict.

A survey by ExecuNet, an online career service for executives found in December 2008 that 40% of the respondents reported that they saw signs of rising demand for managerial talent — a strong increase compared to 26% reported just a month earlier.

Education should be another strong sector, analysts agree. Qualified elementary and secondary school teachers will remain in high demand.

When it comes to green technnology the hottest job prospects will be in areas such as forestry, wind turbine manufacturing, solar-energy research and development, and environmental engineering. However growth in this industry will depend heavily on policies of the Obama administration, proposed tax incentives, and potential government funding.

Top 10 ‘In-Demand’ Occupations

1. Registered Nurses
2. General and Operations Managers
3. Physicians and Surgeons
4. Elementary School Teachers
5. Accountants and Auditors
6. Computer Software Engineers
7. Sales Representatives and Managers
8. Computer System Analysts
9. Management Analysts
10. Secondary School Teachers

Source: Career Voyages,


March 6, 2009

HR Fact Friday: Survey Finds Nearly 20 Percent of Employers Plan to Drop Health Benefits

Filed under: Insurance — Tags: , , , , , , , 11:15 am

A sign of the troubled times is that most new HR related survey data tends to fall on the negative side. Here is the latest case in point and it is sobering news indeed for employees of small businesses who currently have the option of enrolling in an employer provided health benefit plan.

Nineteen percent of employers responding to a new Hewitt Associates survey are planning to stop offering health benefits over the next three to five years, nearly five times as many as the 4 percent that said they were planning an exit strategy last year.

For those employers planning to continue to provide health benefits, keeping employees healthy has become the primary workforce issue in 2009, up from the number 2 position in 2008, according to Lincolnshire, Illinois-based Hewitt’s survey, “The Road Ahead: Emerging Health Trends 2009.”