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Health Savings Accounts (Section 223)

Health Savings Accounts (Section 223). HOW TO SELECT A VENDOR, CONSULTANT, & SYSTEM- by Rob Thurston of HR Consulting Group. HSAs are the most innovative alternative for reducing the high cost of medical insurance, even better than a HRA/FSA.

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Health Savings Accounts (Section 223)

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  1. Health Savings Accounts (Section 223) HOW TO SELECT A VENDOR, CONSULTANT, & SYSTEM- by Rob Thurston of HR Consulting Group. • HSAs are the most innovative alternative for reducing the high cost of medical insurance, even better than a HRA/FSA.

  2. The number one concern for business owners providing employee benefits... • Is the high cost of medical insurance. • How do you reduce health care yet increase employee satisfaction? Look at HSAs. • Do you need a consultant, vendor, or software program to do a HSA? Probably Yes in 2004-2005. • Is there a way to quickly and economically find a consultant, vendor, or software program in 2004-2005? Yes. • How do I know if I have found a good consultant, vendor, or software program? You need to read the rest of this PowerPoint and check out references they provide.

  3. The HSA Difference • Combine affordable HIGH deductible medical insurance with a Health Savings Account (HSA). Allowed since 1/1/2004 under Section 223 of the IRS Code. • Go ask your existing FSA or HRA consultant, vendor, software provider if they have a HSA solution today.

  4. So Where do I begin? • HSAs are the newest way for employers to give their employees freedom of choice in healthcare planning while controlling their own costs. So find the consultant, TPA, or vendor with the most experience. But is willing to reduce their price. • You must ask for current references. Can they show you sample Legal/SPD documents, Trust Agreements, Source Code, and put in writing contractually what they promise to do?

  5. HSAs Reduce Insurance Premiums • Together, a HIGH deductible insurance plan ($1000+single/$2000+ family) and a HSA can provide the perfect combination of affordability, flexibility and security. You must first find an insurance carrier or TPA/self funding expert to find the right High Deductible insurance plan. • For employers with groups who are willing to assume a little more risk, they will achieve significant premium savings!

  6. HSAs Offer Enhancements Over Other Funding Methods • HSAs enable you to use tax deductible dollars to reimburse your employees for qualified medical expenses. • HSA funding can come from the premium savings from an expensive, benefit rich, low deductible health insurance plan to a low cost high deductible plan. Both Employer and Employee contributions can be pre-tax. They work with self funded or fully insured plans.

  7. Who offers a High Deductible Plan to employees? • Go to www.SIIA.org for a list of TPAs and vendors • Go to Aetna, Fortis, United Health Care, Golden Rule, WellPoint/UniCare, Blue Cross Blue Shield, Humana, Pacificare, etc.. • Hire a top consultant who has self funding experience- look at quality TPA/carriers • Ask your actuary if the High Deductible rates quoted are cost effective

  8. Advantages for Employers • You do need to fund the account/hold in trust with qualified Trustee/Custodian • So look for a qualified Trustee/Custodian from the bank, insurance company or IRA/MSA administrators you already know- ask at the www.cdhcc.com site for vendors. • Contact www.hrconsultinggroup.com for a list of Trustee/Custodians • There should be 100% ownership by the employee of contributions/earnings- and it can be invested by the employee • HSAs are available to any size group • HSAs allow employers to offer a high deductible plan and allocate the savings to the HSA for future employee-directed healthcare.

  9. How to find Software • Go to www.cdhcc.com, to www.ecfc.org , to www.siia.org, to www.ihrim.org, to www.benefitnews.com, www.businessinsurance.com, or www.hrconsultinggroup.com and ask for a listing of vendors, SourceBooks, & firms. Will the software vendor either license or lease the software? Can the Source Code be escrowed/released to you for internal use? The amount that can be rolled over to the next year • What happens to Employer unused funds when an employee leaves • The timetable for making your contributions

  10. Conditions • An HSA may reimburse qualifying medical and dental expenses (i.e., the diagnosis, prevention and/or treatment of disease, remedying a structure or function of the body, and certain related transportation expenses), over-the- counter drugs, LTC, COBRA and Medicare insurance premiums, etc.. Does the software you are looking at track and handle all these types of expenses?

  11. HSA Software Features • Can it be linked to the deductible, copay, coinsurance maximums? Can it track tiered or multi layered benefit options? Can it track HSA expenses by both the employee and the dependent? Can software handle reimbursements for different coverage periods? The reimbursement limit need not be the same for each employee? Therefore, an employer may provide a higher reimbursement limit for an employee with a higher coinsurance payment (e.g., for one who selects family coverage under the company's medical plan)?

  12. 1. In this area all category information maybe entered 2. OOP refers to Out of Pocket 3. Here each benefit line may be set up, viewed and edited 4. CL clears the corresponding associated accumulator 5. Here each additional accumulator may be set up, viewed and edited 6. Here each tier in the selected category may be set up, viewed and edited. The Percentage in a tier is the percentage that the Plan/Category pays on that tier. 7. Click on the Advanced tab to view the advanced optional functionality of a category

  13. HSA Software (continued) • A HSA may cover both current and former employees(including retirees) and their spouses and tax dependents? The surviving spouse and dependents of a deceased employee may also be covered? • Linked to major Debit, Credit, Stored Value cards, can do Direct Deposit, and Checks to employees and to Providers?

  14. HSA Software (continued) • HSA can be linked to a HRA, FSA, and Cafeteria plan for coordination of benefits and claims payments? Real-time sharing of same database? • HSA, HRA, & FSA contributions can be invested in wide variety of investment funds with daily valuation and coordination with claims payments? • Import/Export capabilities to accept Excel spreadsheets, ASCII and Text files? • Ad Hoc Report Writer available with custom reports?

  15. Sample HSA Daily Valuation Screen

  16. In this screen you may view all of the entered fund values by date range. After specifying the date range you wish to view click [Refresh Table] (1). A file containing the list of funds and their corresponding new values is regularly imported using the [Import Fund Values] button (2). At the conclusion of each day to generate the buy/sell batch file click on the button listed as (3). Finally, a list of all fund symbols and their full name or description is shown as (4).

  17. Now Is the Time • Control your insurance expense with a HSA. • Offer a high deductible plan and allocate the savings to the HSA for future employee- directed healthcare. • Contact HRCG at (801) 765 4417 or hrconsultinggroup@msn.com, or www.hrconsultinggroup.com for a listing of qualified vendors and software firms.

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