2012 HSA & FSA CHANGES TO KNOW ABOUT

Health savings accounts and flexible spending accounts are growing in popularity. Many people aren't aware of the changes that take place in these plans from year to year. It's important to discuss account details with an agent each year to be fully aware of the current rules or upcoming changes.

Flexible Spending Accounts
These accounts are sometimes called flexible spending arrangements. They are tax-advantaged accounts that let employees automatically deposit a specific amount of each paycheck into them. After funds accumulate, they can be used to pay for qualified medical expenses. These accounts are different from HSAs and HRAs in the respect that they are usually offered with traditional medical plans. They also differ from HSAs in the respect that the unused funds in the account may not be carried over to the next year. Debit cards or forms are used to access funds from the account if money is needed.

Flexible spending accounts allow account holders to contribute to the FSA for any costs that aren't covered by insurance. Some examples of such expenses include coinsurance, copay amounts and deductibles. If a health insurance won't cover a treatment or related health expense, FSA funds can be used to pay for it. The specified limits saw some changes from 2011 to 2012.

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Contribution Limits
It was decided that 2012 would be the last year for no limits on FSA contributions. While there may not be limits in place, plans must specify a maximum percentage of compensation to be contributed to the FSA or a maximum dollar amount. The changes from 2010 to 2011 included over-the-counter medicines being eliminated from coverage if they weren't prescribed by a doctor. The year 2013 will likely see one of the biggest changes: FSA contribution limits of $2,500 annually with yearly inflation increases.

Health Savings Accounts
HSAs are medical savings accounts that also have tax advantages. Taxpayers who are enrolled in HSA-qualified health plans with high deductibles are able to obtain them. At the time of deposit, the funds contributed to these accounts are not subject to federal income tax. Any unused funds that remain in the account at the end of the year are carried over to the next year and added to further contribution amounts. Since contribution also change with these plans each year, it's important to be aware of the changes. The changes from 2011 to 2012 include an increase in out-of-pocket HDHP maximums and HSA contribution limits. However, there are no changes with the HDHP required minimum deductibles.

HSA Contribution Limits
Family: $6,250
Individual: $3,100
Catch-Up Contributions: $1,000

The individual amount of $3,100 reflects an increase of $50 from 2011's limit. The $6,250 limit for families is an increase of $100 from 2011. Catch-up contribution limits, which are for people over the age of 55, remain the same between 2011 and 2012.

HDHP Minimum Required Deductibles
Self: $1,200
Family: $2,400
HDHP Out-Of-Pocket Maximum - Family: $12,100
HDHP Out-Of-Pocket Maximum - Self: $6,050

The HDHP limit increased by $100 between 2011 and 2012 for singles and by $200 for families. Another change between 2011 and 2012 is eligibility of over-the-counter medicines. Insulin is the only OTC medicine approved for reimbursement in 2012 under a health FSA, HSA or HRA without a prescription. In addition to this, it was decided that the penalty of 10% for ineligible expenses paid for using HSA funds would increase to 20% in 2012.

THE NEW AMENDMENT FOR WOMEN'S PREVENTATIVE CARE

The Department of Health and Human Services, commonly called HHS, recently added an update to the Interim Final Regulations for Women's Preventative Care on August 1, 2011. This preventative program is regulated under the Patient Protection and Affordable Care Act, which is commonly called PPACA. Recent changes were developed by the Institute of Medicine to make the plan more beneficial. The institute's orders to review which services are necessary for women's health came from HHS. This new amendment outlines additional guidelines for Preventative Services and the needed alterations of policy provisions in health plans in the near future. The change applies to all plans that are classified as Non-Grandfathered. This includes health policies, insured plans and self-insured group health policies. With this change, health plans must cover Preventative Services. The outline includes a provision for birth control without deductibles or copay amounts.

This change applies to Non-Grandfathered plan year starting on or following August 1, 2012. After this time, they will be required to provide coverage without cost sharing for the following women's Preventative Services:

• Annual well-woman visits to a healthcare provider
• Breastfeeding support, supplies, and counseling
• Gestational diabetes screenings
• Counseling for STIs
• HPV DNA testing for women over 30 years of age
• FDA-approved contraception methods and counseling for contraceptive users
• HIV screenings and counseling
• Domestic violence counseling and risk screening

There are some exemptions to these plans. Group health plans that are sponsored by some religious employers are exempt from the contraceptive coverage requirement. In addition to this, group health insurance coverage that has connections to such plans is also exempt from covering birth control for women. In definition, a religious employer is one that has the inculcation of religious values and its purpose, primarily serves people sharing religious tenets, is a non-profit organization under the IRC and is one who has a majority of employees sharing religious tenets.

Although these changes are nearly a year into the future, it is important to analyze the additional services' impact on pricing. While these changes will benefit thousands of women across the country, the changes will certainly come with a price. Benefits Account Managers should keep abreast of of any additional changes and amendments affecting the Patient Protection and Affordable Care Act.

ADVANTAGES OF TELEMEDICINE

Telemedicine, which is already being used by many, is expected to become more popular in the future. Every employer should consider the advantages of this option for their employees. Although there are many vendors available, it's best to choose one of the top three. To use telemedicine, patients call a phone number to speak to a trained representative. The representative completes a health profile for the patient. By doing this, the representative is able to determine what type of medical issue the patient may be facing. If the nature of the call isn't an emergency, the representative ensures that a physician will call the patient back within a few hours. However, if the patient indicates a situation that is considered an emergency, the representative will urge that individual to seek emergency care or dial 911.

After speaking with the patient, the physician makes a diagnosis. If the physician feels that the patient needs further tests, the patient must schedule an appointment at a medical facility. However, most patients who use telemedicine programs have a cold, mild infection or a virus that can be cured with medication. If the patient needs medication, the physician calls a nearby pharmacy to order the prescription. Most physicians advise patients to schedule a visit with their regular physician after completing the recommended treatment.

Although telemedicine isn't able to solve every problem a patient has, those who are fairly healthy can benefit from this program. Emergency room visits can cost thousands of dollars. Even a simple office visit costs more than what most people have in their pockets. In many cases, a visit to the doctor or emergency room isn't necessary. Patients may simply be worried and need assurance. In some cases, they may only need a medication to solve their problem. For example, a patient who has chronic infections may have to spend a considerable amount of money to visit the doctor each time symptoms appear. However, if telemedicine is used, the patient is able to get the required antibiotics quickly. There is no need to risk contracting another virus to by going to a clinic. Patients may not have to take time away from work to wait for a doctor. The cost of telemedicine is much less than paying upfront for a doctor visit. However, patients who have extremely low copay amounts may pay slightly more for telemedicine. It's definitely an affordable price to avoid the hassle of going to the doctor for a simple issue. This is also beneficial for people who live in rural areas.

Employers who wish to save money should consider telemedicine as an addition to their health plan. Employees who use telemedicine won't need to take time away from work as often to see the doctor for simple or routine things. In addition to saving time, this plan also saves money. Healthier employees with more time to devote to work are a financial asset to the company. Employers considering this coverage should speak to an agent about the various options available.