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Employee Benefits

2023 Health FSA And Other Benefit Limits

Revenue Procedure 2022-38 includes the inflation-adjusted 2023 contribution limits for certain employee benefit programs. Below is a summary of some of those contribution limit adjustments.
Health Flexible Spending Accounts (Health FSAs)
  • The payroll deduction contribution limit for 2023 plan years is $3,050 (an increase of $200).
  • Up to $610 of unused funds can be carried over from the 2023 plan year to the 2024 plan year (an increase of $40). Carryover is an optional feature that employers can have with the Health FSA they offer to their employers.
Dependent Care Flexible Spending Accounts (Dependent Care FSAs)
  • The maximum contribution limit is $5,000 for the 2023 calendar year (or $2,500 if married and filing taxes separately). This contribution limit is not inflation adjusted.
Commuter Programs
  • The monthly contribution limit for mass transit is $300 (an increase of $20).
  • The monthly contribution limit for qualified parking is $300 (an increase of $20).
Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)
  • The maximum annual contribution for single-only coverage for 2023 plan years is $5,850 (an increase of $400).
  • The maximum annual contribution for family coverage for 2023 plan years is $11,800 (an increase of $750).
Earlier this year, the IRS issued a separate Revenue Procedure with the limits for High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs). To see those limits, please click here.
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Medicare

The Great Unwinding

The Great Unwinding

The Great Unwinding is the undoing of several health coverage requirements that were implemented by legislation, regulation, and executive order because of COVID-19. The following provisions are particularly noteworthy.

It’s hard to believe that we are still under a national public health emergency because of the COVID-19 pandemic, but many are predicting that will finally come to an end later this year. From the perspective of the Centers for Medicare and Medicaid Services (CMS), this is what they are referring to as the “Great Unwinding.”

The Great Unwinding is how CMS refers to the undoing of several health coverage requirements that were implemented by legislation, regulation, and executive order because of COVID-19. Amongst many healthcare and coverage provisions that were implemented over the past 2.5 years, the following provisions are particularly noteworthy:

  • Medicaid eligibility was expanded. States have been required to provide continuous eligibility for Medicaid to anyone who was enrolled in coverage as of March 18, 2020.
  • Advanced Premium Tax Credits (APTCs) on Marketplaces were increased, and eligibility for APTCs expanded to additional individuals.
  • Extensions to elect COBRA coverage and make COBRA premium payments have been provided. Extensions to make a special enrollment election for group coverage has also been provided.
  • Cost-sharing for COVID-19 vaccines and testing was eliminated in many circumstances.
  • Telemedicine coverage was expanded for Medicare, Medicaid, and CHIP beneficiaries.

These provisions expire when the national public health emergency is declared over, or by the end of 2022 as it relates to the changes to APTCs. The so-called Great Unwinding is expected to cause anywhere between 8-15 million people to lose coverage. Additionally, there is an expectation that some individuals may forgo certain medical care as some of the coverage provisions expire.

 

The national public health emergency is set to expire on July 15, 2022, but it is likely to be extended beyond that date. The Biden administration has told states that it would provide them with at least 60 days’ notice of the end to the national public health emergency. Congress could also act to extend some of the provisions and/or make them permanent. The Great Unwinding could be a topic of debate in the upcoming November elections.

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Medicare

New Bill Would Relax HSA Eligibility for Individuals with Medicare

New Bill Would Relax HSA Eligibility for Individuals with Medicare

Recently, a bipartisan bill was introduced in the House of Representatives (House) that would change the eligibility requirements to make contributions to a Health Savings Account (HSA).

Recently, a bipartisan bill was introduced in the House of Representatives (House) that would change the eligibility requirements to make contributions to a Health Savings Account (HSA).

Referred to as the Health Savings for Seniors Act, the House bill would let those individuals who are enrolled in a high deductible health plan (HDHP) and Medicare contribute to an HSA. Under current rules, anyone enrolled in Medicare coverage cannot make contributions to an HSA even if they also have coverage under an HDHP. With more and more people working beyond age 65, the bill aims to preserve HSA contribution eligibility for those who have an HDHP and Medicare Part A and/or B.

The House bill does come with some tradeoffs. The bill would eliminate the ability to use HSA funds tax-free for Medicare premium expenses. Currently, all Medicare premiums other than those for Medicare Supplement plans can be paid tax-free from an HSA.

The bill would also impose a 20% penalty when HSA funds are used for non-medical expenses by someone age 65 or older. That penalty is currently waived for people aged 65 or older.

This isn’t the first time this bill has been introduced by Congress, and numerous other bills have been introduced in the past that would make changes to various HSA rules and regulations. It’s unclear if this bill will earn enough votes in both chambers of Congress to become law, but it does have at least some bipartisan support. The bill is being co-sponsored by Ami Bera (D-CA) and Jason Smith (R-MO).

HSAs continue to be a valuable healthcare resource for individuals in the United States. It’s estimated that 32-33 million individuals have an HSA. HSAs let people set aside money tax-free for the future use of healthcare expenses. Unlike Flexible Spending Accounts (FSAs) or Health Reimbursement Arrangements (HRAs), HSAs let people invest their funds into stocks, bonds, exchange traded funds (ETFs), mutual funds, and other publicly traded vehicles with earnings accumulating tax-free. As long as the money is withdrawn and used to pay for out-of-pocket medical expenses, the funds are never taxed.

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Medicare

Individual Market Commissions

Individual Market Commissions

The CMS recently issued guidance on broker compensation for the sale of plans in the individual health insurance market. Here's what you need to know.

On June 7, 2022, the Centers for Medicare & Medicaid Services (CMS) issued guidance in the form of Frequently Asked Questions (FAQs) on broker compensation for the sale of plans in the individual health insurance market. The guidance is in response to some health insurance carriers who have eliminated or reduced commissions for health insurance plans that are sold during a Special Enrollment Period (SEP).

Of particular importance is the following FAQ and the response from CMS:

Is it permissible for an issuer to differentially compensate agents or brokers who assist consumers with enrollments in individual market coverage in the same benefit year based on whether the enrollment is completed during an SEP or during the applicable benefit year’s Open Enrollment period (OEP)?

No. Arrangements that pay reduced (or no) commissions and other forms of compensation to agents and brokers who assist consumers with enrollment in individual market coverage during an SEP and pay higher amounts for OEP enrollments for the same benefit year violate the guaranteed availability provisions of the Affordable Care Act.

The guaranteed availability provisions in section 2702 of the Public Health Service Act (PHS Act), as added by the Affordable Care Act, generally require issuers to accept “every employer and individual in the State that applies for such coverage.” This requirement applies to issuers offering non-grandfathered health insurance coverage in the group or individual markets, through or outside of the Marketplaces. As implemented in the individual market, issuers are required to guarantee issue such coverage during the annual OEP to all individuals, as well as during an SEP to an eligible individual.

Issuers’ normal conduits for receiving applications and offering coverage must also be open to individual market consumers for OEP and SEP enrollments, as applicable. Issuers commonly use agents and brokers as an important part of their marketing and sales distribution channels. The way an issuer structures its compensation to agents and brokers influences the marketing to, as well as enrollment and retention of, individual market consumers. An arrangement that reduces or eliminates the commission or other compensation an agent or broker receives for SEP enrollments compared to the commission or other compensation received for OEP enrollments in the same benefit year discourages agents and brokers from marketing to and enrolling individuals eligible for an SEP. These practices therefore violate the guaranteed issue protections afforded to these individuals under the statute. Exceptions may be made for cases in which state regulators make specific recommendations for issuers to address solvency concerns or financial capacity limitations.

In a 2016 FAQ, CMS previously stated that payment of agent/broker commissions or other forms of compensation is a marketing practice covered under 45 CFR 147.104(e) and 156.225(b). Specifically, the 2016 FAQ explained that compensation arrangements structured to discourage agents and brokers from marketing to and enrolling consumers with significant health needs constituted a discriminatory marketing practice prohibited under §§ 147.104(e) and 156.225(b). Consistent with this previous guidance, to the extent arrangements which pay reduced or no compensation for SEP enrollments discourage agents and brokers from marketing to and enrolling consumers with significant health needs, the arrangements would also constitute a discriminatory marketing practice prohibited under 45 CFR 147.104(e) and 156.225(b).

As the latest FAQ guidance is still recent, we will now need to wait and see how the health insurance carriers who have altered their SEP commissions respond.

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Press

The Midwestern Higher Education Compact (MHEC) Selects IXSolutions as its
Private Health Insurance Exchange Provider Option for Institutions

The Midwestern Higher Education Compact (MHEC) Selects IXSolutions as its
Private Health Insurance Exchange Provider Option for Institutions

College students in 12 Midwestern states will now have expanded access to affordable healthcare

ROSEMONT, Ill. and Minneapolis, Minn. -September 17, 2015 – The Midwestern Higher Education Compact (MHEC) announced today its agreement with provider IXSolutions (IXS) for a private health insurance exchange offering direct access to affordable health insurance options to students at higher education institutions in 12 Midwestern states.

IXS is offered as a plug‐and‐play health insurance solution for institutions that do not or are unable to offer a school‐sponsored plan. Using this solution will save administrative time in assisting students in selecting insurance and providing value by offering students access to a wide range of coverage options and
additional IXS resources and personal support.

Student access to affordable health care coverage is closely aligned with MHEC’s mission. MHEC sponsors a variety of programs to reduce costs and increase student access to college. “We want to make sure that every student on MHEC campuses can have access to health insurance,” said Larry Isaak, president of MHEC. “IXSolutions offers a program that is easy for us to adopt and make available to each school in our region that wishes to offer an opportunity for students to purchase insurance.”

The private exchange is available to any of MHEC’s nearly 1,000 institutions within the 12-state compact, including two-year, four-year, and graduate-level higher education institutions. Once an institution enrolls in the program, students can shop for health insurance in an online marketplace that makes the confusing job of shopping for and purchasing health insurance a bit easier. IXS is also supported by licensed
insurance professionals who can answer students’ questions, determine if they are eligible for federal subsidies under the Affordable Care Act, and even help enroll them in coverage.

“We’re delighted to announce this agreement with MHEC,” said John DiVito, president and CEO of IXS. “Access to affordable healthcare is important for everyone, but students on college campuses sometimes get lost in the fray as they age out of their parent’s plans or don’t have access to group plans through family or work. Our solution makes it possible for them to quickly and easily get the coverage they need so they can focus on their education.”

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level funding vs self funded
Employee Benefits

Level Funded vs. Self Funded Health Insurance

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Benefits of Level Funded Insurance Plans

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Press

IXSuite Private Exchange Changing Health Care Delivery for Employers

IXSuite Private Exchange Changing Health Care Delivery for Employers

Small business employees get help during final days of 2015 open enrollment period

ROSEMONT, Ill. (January 15, 2015) With only one month remaining in the 2015 health insurance open enrollment period, IXSolutions is continuing to help Illinois small businesses give their employees access to coverage. IXSolutions offers the IXSuite private insurance exchange, designed exclusively for small businesses as a time and money saving alternative to group coverage.

While the open enrollment period is scheduled to end on February 15, small businesses still have time to help their employees get covered. Any individual without health insurance after Feb. 15 will be at risk for paying a tax penalty of up to two percent of their annual household income.

“It’s safe to say that most employers do not want to see their employees paying more money in taxes just because they don’t have health insurance,” said John DiVito, president and CEO of IXSolutions. “But, nearly 70 percent of small businesses in Illinois don’t offer health insurance, mostly due to the high costs of traditional group coverage. IXSuite allows these small businesses to help their employees get access to affordable coverage without putting a financial strain on their budgets.”

IXSuite features an online health insurance marketplace for employees, which allows them to shop for plans offered by the nation’s leading insurance companies. IXSuite gives employees the opportunity to choose a health plan that meets both their health care and financial needs.

Employees can also take advantage of lower health care costs, currently offered through government subsidies. Qualifying for these subsidies can allow them to pay a lower monthly premium for their health plan and possibly even lower costs for the health care services they receive. IXSuite offers employees assistance from licensed insurance professionals to determine subsidy eligibility and help enrolling in subsidy eligible plans.

The exchange can also be used for employers looking for a health care solution for their part-time employees. While these part-time employees may not qualify to be covered under their employer’s group plan, they are still legally required to have health insurance. IXSuite offers an easy way for employer’s to help their part-time employees get access to the coverage they need for 2015.

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Level Funded vs. Self Funded Health Insurance

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Press

Exclusive partnership brings better benefits to association members

Exclusive partnership brings better benefits to association members

The Chicago Bar Association and IXSolutions Announce Exclusive Health Insurance & Benefits Partnership

Partnership will deliver an all-in-one health insurance and benefits solution for individuals, families, and employers


CHICAGO, IL—The Chicago Bar Association and IXSolutions have announced an exclusive partnership that will provide CBA members with a simple, easy benefits solution. With IXSolutions, members will receive access to quality health insurance and benefits options at an affordable price. Employers will receive an online benefits platform built to help effortlessly manage employee benefits, onboarding, and payroll in one single location.

Members will also receive a personal benefits consultant and a dedicated support team for year-round benefits support.

In tandem, the platform offers employers more time to manage their company by eliminating time spent stressing about employee benefits.

“…when searching for health insurance and other benefits, the IXSolutions team provides clarity and reduces anxiety when searching for health insurance coverage,” says Tyler Sill, Vice President of CBA Insurance Agency “The people are extremely responsive and knowledgeable. I cannot recommend working with IXSolutions more strongly.”

IXSolutions is proud to assist members with their various healthcare needs, and the recognizes that benefits continue to be a challenging topic for employers and individuals alike. As policies from insurance carriers and healthcare regulations continue to change at a rapid pace, the demand for clarity and simplicity has never been greater.

IXSolutions offers a number of products to members, including health, life, dental, and vision insurance; compliance documents; Medicare; HSAs, HRAs, FSAs, and COBRA; and more.

Now, members of The Chicago Bar Association can access comprehensive healthcare insurance options through IXSolutions. More information can be found at www.ixshealth.com/CBA or by calling 888.239.4408. For associations interested in setting up a benefits program for their members, visit www.ixshealth.com/partnership-program.

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level funding vs self funded
Employee Benefits

Level Funded vs. Self Funded Health Insurance

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Medicare

2022 PCORI Story

2022 PCORI Story

Created by the Affordable Care Act, the goal of PCORI is to help patients and those who care for them make better-informed decisions about healthcare choices.

The Affordable Care Act (ACA) created a research institute known as the Patient-Centered Outcomes Research Institute (PCORI). The goal of PCORI is to help patients and those who care for them make better-informed decisions about healthcare choices. PCORI is funded in part by fees which are charged to health plans. The following information is designed to help employers understand their upcoming payment obligations.

Fee Amount: The upcoming fee amount depends on when the plan year ended:

  • Plan years ending between January 1, 2021 and September 30, 2021 = $2.66 per covered person
  • Plan years ending between October 1, 2021 and December 31, 2021 = $2.79 per covered person

Plan Year Ending Date: This is the last day of the plan year. As an example, a plan that had a July 1, 2020, effective date would have a plan year ending date of June 30, 2021. Alternatively, a plan that had an effective date of January 1, 2021 would have a plan year ending date of December 31, 2021.

Due Date: The fees are due by July 31, 2022 for plan years which ended in 2021.

Fully Insured Health Plans: The insurance company is responsible for paying the PCORI fee, though most employers with fully insured health plans are indirectly paying these fees through slightly higher premiums.

Self-Funded Health Plans (including Level Funded Health Plans): The employer is responsible for paying the PCORI fee. The fee is determined based on the average number of covered lives in the plan year ending in 2021. An easy way to calculate the average number of covered lives is using a snapshot method. Under this method, an employer picks one day during each quarter of the plan year (e.g., Jan 1, Apr 1, Jul 1, Oct 1), adds the total number of covered lives (including spouses and dependents) for those days, and divides that number by 4.

Non-Integrated HRAs: These are Health Reimbursement Arrangements (HRAs) which are not tied to a traditional group health plan and will generally include Qualified Small Employer HRAs (QSEHRAs), Individual Coverage HRAs (ICHRAs), and certain Retiree HRAs. The PCORI fee for these types of HRAs should be calculated the same way as the self-funded health plans referenced above. However, if the non-integrated HRA only reimburses dental and/or vision expenses, no PCORI fee applies to the HRA.

Special Rules for Integrated HRAs: These are HRAs that are only available to employees who are also enrolled in a traditional group health plan. Employers that have a fully insured health plan coupled with an integrated HRA must pay the PCORI fee for the HRA, but they may treat each HRA participant as a single covered life. In other words, the fee generally does not apply to spouses or dependents covered under the HRA. Employers with a self-funded health plan and an integrated HRA may treat the coverage as a single plan assuming both plans have the same plan year.

FSAs: Flexible Spending Accounts (FSAs) are not subject to PCORI fees if they are considered an excepted benefit. To be considered an excepted benefit, employees must be offered a traditional group health plan, and if the employer contributes to the FSA, the employer may not contribute more than (the greater of) \$500 or a dollar-for-dollar match of the employee’s contribution.

HSAs: Health Savings Account (HSAs) are not subject to PCORI fees.

Dental and Vision Plans: Stand-alone dental and vision plans are not subject to PCORI fees.

Making Payments: Employers should complete Form 720 to make payments. Be sure to use the form version that has a June 2022 revision date which can be located at this website.

Extension of PCORI Fees: At the end of 2019, Congress passed a spending bill which extended the payment of PCORI fees for 10 additional years. PCORI fees will continue to apply to applicable health plans through the fiscal year ending in 2019, with final payments now scheduled to be due in 2030.

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Telemedicine and HSAs

Telemedicine and HSAs

Everything you need to know about the new law permitting telemedicine coverage until December 2022, and what it means for your HSA eligibility.

Telemedicine Coverage and HSAs: A Recap

Many types of telemedicine coverage eliminate the ability for a person enrolled in a qualified high deductible health plan (HDHP) to make contributions to a Health Savings Account (HSA).

HDHPs have a minimum deductible threshold, and in 2022 that threshold is $1,400 for a person with single-only coverage and $2,800 for a person with family coverage. In addition, there can be no coverage for anything other than preventive care or excepted benefits (e.g., dental or vision coverage) until the minimum deductible threshold has been satisfied. This prohibition applies not only to the underlying HDHP, but also to benefits provided under another plan or program.

 

What does this mean?

This means telemedicine benefits that provide coverage with no copay or a low copay (provided through the HDHP or on a stand-alone basis) generally eliminates the ability to make contributions to an HSA; however, the CARES Act provided a temporary provision which allowed for telemedicine coverage without it impacting the ability to contribute to an HSA. The CARES Act enabled that provision for 2020 and 2021 plan years.

About the New Law

More recently, President Joseph Biden signed a spending bill into law. The new law permits telemedicine coverage of any kind between April 1, 2022 and December 31, 2022 without it impacting the ability for a person to make contributions to an HSA.

This does, however, mean there is a gap between January 1, 2022 and March 31, 2022 where some plans (generally, those plans that run on a calendar year) must apply the minimum deductible for telemedicine services in order a person to be considered HSA-eligible during the months of January through March.

Absent another law being passed, most telemedicine programs will eliminate HSA eligibility again starting in 2023.

 

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Lifestyle Spending Accounts

Lifestyle Spending Accounts

Lifestyle Spending Accounts (LSAs) have become one of the hottest new employee benefit programs. Here's what you need to know.

Lifestyle Spending Accounts (LSAs) have become one of the hottest new employee benefit programs. LSAs are sometimes referred to by other names, such as Personal Spending Accounts or some even refer to them simply as Wellness Programs. There could be a slew of other names, but we refer to them as LSAs.

LSAs are employer funded programs that reimburse employees for certain personal expenses. Employers define what expenses are eligible, which employees are eligible to participate in the plan, and the maximum reimbursement limits. Employees generally have options on how to use the funds according to their lifestyle preferences. LSAs often promote wellness and wellbeing, but the sky is the limit as to what can be reimbursed, and every LSA is unique and customizable.

 

Some Popular LSA Plan Designs

  • Health & Fitness LSAs – These could reimburse expenses such as gym memberships, yoga classes, home exercise equipment, personal training, or nutritional supplements.
  • Personal Care LSAs – These could reimburse expenses such as spa services, salon services, foot and nail care, or meditation classes.
  • Entertainment LSAs – These could reimburse expenses such as movie theatre tickets, sporting event tickets, concert tickets, museum entry fees, or art and music lessons.

 

 

LSAs do not currently have any preferential tax treatment under the Internal Revenue Code or state tax laws. That means the reimbursements to employees are included in their gross income and subject to taxes; however, the reimbursements can be written off as a business expense by the employer.

LSAs are popular amongst employees, and they’re usually perceived as a “cool” benefit. Employees generally love that they have flexibility and choice on how they spend the money in their LSA. Consider the Health & Fitness LSA as an example. Employees can use their LSA funds to pay for a membership at any gym or fitness center of their choosing. Alternatively, they may choose to exercise at home and purchase a Peloton bike or treadmill with their LSA funds. Other employees might want to purchase vitamins and supplements from GNC or a similar product provider.

The flexibility of LSAs creates desirability to have them as benefit. Employers looking to offer something new should give LSAs a consideration.

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