Tag: HRA

The Competing Interests to Financial Well Being

by Jim McCabe, Vice President, Sales Strategy

Employee Benefit communication strategy seems to be about options for employees, but competing discretionary income options. These offerings are not necessarily about education or risk profiling of the potential participant. Whether a new colleague at orientation or an existing colleague working through open enrollment, competing interests cause concern and analysis by paralysis. This creates less than optimum participation in employer match programs and those subject to discrimination testing.

A company could be offering a HSA, HRA, 401K, Voluntary Benefits, Stock Purchase Plan, or FSA, with each option providing a separate website for information. Depending upon age and role within the firm, each option in and of itself is appealing, but which one is right for the particular circumstances of each colleague that is investigating those options?

The more discretionary income there is available, the more options that can be enrolled in. However, if you are under 30 years of age, with average educational debt of $23,000, or putting money aside to create a down payment for a primary residence, how is one to know the best way to save for future retirement, retiree medical expenses, current large deductible health plans or protection from life’s adversities or seminal events?

The competition for “Mind Share” is difficult in an age of multiple sources for information. The ability to highlight and educate about Macro and Micro economic issues affecting both investment vehicles and personal risk tolerance is not coordinated in any way, and do not address the issues effecting the potential plan participant.

The future needs to encompass individual risk profiling and subsequent advice that takes into account each individual’s unique characteristics. The day when an employee can access a singular portal with benefit offerings and recommendations based on current Life status and risk profile will be the day that Financial Well Being will be achieved as part of a companies overall communication strategy.

What are your thoughts? I would appreciate any feedback or dialogue on this subject.

Little Known Impact of Healthcare Reform: PCORI Fees

by Chris Bettner, Sterling Executive Vice President of Business Development

The Internal Revenue Service (IRS) issued a final rule on fees on health insurance policies and self-insured plans for the Patient-Centered Outcomes Research Trust Fund. The Patient Protection and Affordable Care Act (PPACA) established PCORI to promote evidence based medicine by sharing comparative data and effectiveness through research findings.  This is the funding mechanism for the research.

To fund PCORI, PPACA imposes a fee on employers who sponsor self-insured health plans and insurers providing fully insured health coverage as well.  For each policy or plan year ending on or after Oct. 1, 2012, and before Oct. 1, 2019, the first payment is due by July 31, 2013. Each year following, the fee will be due no later than July 31 following the last day of the plan year. The fee must be reported on Form 720, completed by the employer with the fee attached.

The fee is $1.00 per plan participant for the first plan year ending after Sept. 30, 2012, and $2.00 per plan participant in succeeding years.  For policy or plan years ending after Oct. 1, 2014, the fee will be increased based on increases in the projected per capita amount of national health expenditures.

The final rule clarifies that the fee required by the employer is based on the average number of lives covered under the plan during the plan year. There are several ways to calculate this.

If an employer sponsors more than one self-insured arrangement they are treated as a single plan for calculation purposes as long as the plans have the same plan year.  An example of this is a self-insured health plan and a self-insured Health Reimbursement Arrangement (HRA) attached to that health plan.

In the event that the employer has a fully insured health plan with a self-funded HRA, the fee applies to the HRA population.  Remember that the health plan will be paying the fee on the fully insured health plan side.  The employer is still required to calculate and pay for the HRA side.

This same ruling applies to employers who provide health plan coverage to a retiree population.

COBRA and other continuation coverage must also be included in the calculation.

The following plans are subject to the PCORI fee:

  • Medical plans
  • Prescription drug plans
  • Self-insured dental or visions plans (if provided without a separate election or premium charge)
  • HRAs
  • Retiree-only health plans

Excepted or Exempt Plans:

  • Self-insured dental or vision plans (if separate coverage elections and employee contributions)
  • Expatriate coverage for employees working outside the US
  • HSAs
  • Most FSAs
  • EAPs, Wellness programs, and disease management programs (that do not provide a significant benefit)

The employer can aggregate all plans that are self-insured and pay the fee once on all overlapping plan lives.  The employer must pay these fees outside of the plan, not using plan assets.

A consideration for employers who do not wish to pay the fee twice on a fully insured medical plan (the fee is added into the premium by the carrier) and again for a self-funded HRA may want to consider moving to a plan design that is HSA (Health Savings Account) compatible as HSAs are exempt from the fee. Learn more about HSAs.

Learn more about Sterling’s PCORI Fee Calculation Services.

About Chris Bettner
With over 30 years of experience in healthcare sales and management with health insurance carriers, Chris Bettner serves as executive vice president of Business Development for Sterling Health Services and was a co-founder of the company in 2004. Prior to joining Sterling, Chris was Vice President of Sales for Blue Shield of California. She held similar positions at Lifeguard, FHP, Independence Blue Cross and MetLife. Chris is also a national spokesperson on HSAs and consumer directed healthcare programs. Connect with Chris Bettner on LinkedIn.

New! Submit Receipts and New Claim Request Now Available on Our Mobile Website

Sterling mobile web users can now submit photo receipts to substantiate a debit card purchase or for pending claim documentation. Users also have the ability to submit their HRA and FSA claim requests through their mobile devices.

Two payment methods are also now available – “Pay Me” (direct deposit) or “Pay Provider” (check). To use these mobile payment methods, you must first go to www.sterlinghsa.com and set up payee and bank account information.

Contact us with any questions.