Insights and Actions from AHIP Institute & Expo 2018

Insights and Actions from AHIP Institute & Expo 2018

07/10/2018

by Becky Wagner

 

At this year’s America’s Health Insurance Plans’ (AHIP) Institute & Expo 2018, which I and several of my WEX Health team members attended, one session—“Navigating Uncertainty, Health Reform and Market Transition”—hinted at the great need to simplify the business of healthcare. WEX Health works to do just that—through feedback from real members, it powers CDH account and COBRA administration forms that make managing healthcare engaging and easier to understand.

With sessions like “Technology, Trends and Business Insight,” “Data, Analytics and Actionable Intelligence” and many others, one thing that struck me above all is that technology was part of every conversation. It’s clear that technology sits front and center among the methods and tools to improve healthcare for consumers, payers and providers. Needless to say, its value goes way beyond creating engaging consumer portals and one-to-one journeys. It stretches into how new technologies can help people better manage their health to cut down on the need for unnecessary care and help reduce healthcare costs. And WEX is committed to advancing technology to better serve its customers for all those reasons and more.

 

Some additional highlights we gleaned from the San Diego Convention Center include:

Consumer-health literacy remains a problem. This means that it is more important than ever for health plans to simplify messaging and documents they share with their members. For consumer-directed healthcare to continue on its growth trajectory, consumers must be provided with not just accurate information but information that is presented in ways that are easily understood.

There is a continued desire to slow the growth of and reduce healthcare costs by providing innovative ways to seek care. Some of these methods include telemedicine, cost comparison tools and machine learning. Though the tools are available, they have been met with some resistance from consumers in deploying them. Therefore, the next step is to encourage people to take advantage of tools to make smarter decisions.

Leaders in this industry must learn to build a team of people with a wide array of expertise to ensure organizational success, because the field requires such wide-ranging skills as it expands and seeks to meet the needs of consumers. Successful leadership, in other words, means realizing that it’s not always about being the best and the brightest individually—but it’s more about being the best team for the business.

AHIP CEO Matt Eyles gave an engaging presentation on the growing recognition from payers that social determinants significantly impact chronic disease. These factors must be accounted for—and mitigated, whenever possible—by efforts to address them earlier in the consumer healthcare journey.

 

We left the expo with the conviction that consumer-directed healthcare is on the path to flourish. The businesses and organizations who tend to the industry are engaging in lively conversations and smart and strategic plans to ensure that it does.

It’s no secret that using technology to influence smarter healthcare decisions is top of mind. The WEX Health Clear Insights Report sheds light on how members prepare for open enrollment and saving for healthcare expenses.

Click here to view the report: https://wexhealthinc.com/clearinsights-ahip2018/.

 


BeckyWagner_WEXHealth

Becky Wagner

Senior Marketing Manager at WEX Health

As the Senior Marketing Manager for the Health Plan Vertical, Becky connects market-driven insights to develop campaigns and content that resonate with consumer-directed healthcare account administrators and consumers. She is an experienced marketer with an MBA from the University of Minnesota – Carlson School of Management. With over three years in the healthcare industry, Becky has experience in marketing, product development and account management at Blue Cross and Blue Shield of Minnesota and Further.

What to Expect at Partner Conference Next Week

04/23/2018

by Jeff Young

 

Around the WEX Health offices, we’ve got all hands on deck to prepare for next week, when our go-to industry event Partner Conference 2018 will be held in Scottsdale, Arizona, from April 30 – May 2. Once again, we anticipate record-breaking attendance from our WEX Health Partners.

 

As our Partners, you help us connect WEX Health to more than 300,000 employers and more than 25 million consumers across the U.S. and Canada. Because you work tirelessly with us to reduce costs and simplify the business of healthcare, we’re committed to providing a superior value proposition for you in multiple ways. One of these is through Partner Conference, which gives our Partners the opportunity to come together for an intense agenda of learning, networking and celebrating. Here are some of the good things to look forward to this year:

 

A motivational keynote message will be delivered by two-time New York Times best-selling author Sally Hogshead, the creator of Fascination Advantage®, the first communication assessment that measures how others perceive you.

 

I’ll also be speaking at the conference, as will these keynote speakers:

  • Jeff Bakke, chief strategy officer, WEX Health
  • Chris Byrd, executive vice president and corporate development officer, WEX Health
  • Matt Dallahan, senior vice president, WEX Health
  • Sarah Gordon, chief strategy officer, Center for Financial Services Innovation
  • Brad Holmes, managing vice president, Gartner

 

This year’s conference will also include concurrent breakout sessions, innovation demo stage presentations, spotlight sessions, hands-on labs and partner panels. Additionally, there will be numerous networking opportunities, a sponsor expo and the annual Partner Awards dinner and program.

 

And as Partners, you will get a sneak peek of the exciting new features and functionality in the upcoming WEX Health Cloud June 2018 release, which will include user interface refreshes and mobile payments for COBRA.

 

You will also hear about upcoming WEX Health 2018 Marketing & Sales Bootcamps planned for June 12-13 in Buffalo, New York, and July 17-18 in Boston, Massachusetts.

 

Find the full agenda here.

 

We look forward to hosting you, and encourage you to share your Partner Conference 2018 experience in real time via Twitter #WEXPC2018.


Jeff Young

President, Health | WEX Inc.

Jeff joined WEX in 2014 when the company acquired Evolution1 to expand its healthcare payments business. He spearheads the company’s efforts to simplify the business of consumer-driven healthcare and is responsible for WEX’s growing healthcare business, with a focus on industry-leading technology and a strong partner network. Before joining Evolution 1 as CEO and chairman in 2008, Jeff was the vice president of business applications at Microsoft Corporation in the U.S., and prior to that, he held senior leadership positions at Great Plains Software, helping lead Great Plains through its successful IPO and eventual sale to Microsoft for more than $1 billion. A graduate of the University of Jamestown (N.D.), Jeff serves on the boards of Bell Bank in Fargo and West Fargo (N.D.) Baseball.

3 Ways to Help Your Employees Manage Their Healthcare Expenses

3 Ways to Help Your Employees Manage Their Healthcare Expenses

03/30/2018

 

The United States now spends almost twice as much on healthcare as other advanced industrialized countries, even though just a few decades ago our healthcare spend was closely aligned to that of other countries. As a result of the rising cost of healthcare, changes to employment and benefits laws and the availability of new benefits options, the employee benefits landscape in the U.S. has also been dramatically altered. One in four Americans now report that the cost of healthcare is the biggest concern facing their family, according to a Monmouth University poll. This makes it more important than ever for employers to offer their employees the guidance and tools they need to manage their healthcare plans and costs. Here are three approaches that can be used alone or in combination:

 

  1. Educate your employees about the financial benefits of HSAs, HRAs and FSAs.

Consumer-directed health plans (CDHPs) are the lowest overall cost option for employees in 65 percent of companies that offer them. They are typically paired with a triple-tax-advantaged health savings account (HSA), a health reimbursement account or a flexible spending account that allows employees to save for out-of-pocket expenses. The National Bureau of Economic Research reports that employees save an average of more than $500 per year by selecting a high-deductible health plan.

The HSA contribution limit for 2018 is $3,450 for singles and $6,850 for families, but employees just getting started with an HSA can be encouraged to save as little as one to three percent of their salaries into their HSA. By building a small amount of health savings, they won’t “feel” incremental healthcare costs as sharply and will be better prepared to handle both expected and unexpected medical expenses in the future. Want more information about HSAs and how to communicate their value to your employees? Read our blog post.

 

  1. Provide your employees with benefits-based incentives related to their health and wellness.

Incentivizing employees to take an active role in improving their poor health behaviors can reduce their health risks and subsequently their healthcare costs. One WellSteps study, for example, found that post-implementation of a corporate employee wellness program there was a dramatic difference in the cost of medical care between program participants and non-participants ($3,280 versus $6,177).

Employers can also help their employees save money by offering them benefits-based incentives for participating in a workplace wellness program. Such incentives may include lower office copays, reduced deductibles or monthly premium discounts in exchange for health risk assessment completion, participation in weight-loss or smoking cessation programs or other workplace wellness activities.

 

  1. Give your employees tools to manage and plan for their healthcare expenses.

Analytics programs such as the WEX Health Cloud Consumer Dashboard make it easy for employees to get an aggregate view of all their healthcare claims, debit card transactions, distributions and expenses. Expenses can be viewed by category, individual or provider, and employees can initiate payments for expenses including reimbursements, pay the provider and bill pay.

A corresponding mobile app also lets employees view, budget, plan, analyze and manage their healthcare-related accounts and expenses, helping them more wisely manage their healthcare spending.

Employers and HR managers who facilitate healthcare consumerism among their employees will help them save money on healthcare costs. As a result, employers stand to gain a real competitive advantage over others in their industry—a workforce that is not only easier to hire and retain but also perhaps better informed and even healthier because of the tools you’ve provided.

 

Related Posts:

Employers, These Are the Current Benefits Issues You Need to Know About

What You Need to Know About Data Security and Wearable Devices in the Workplace

Employers, This Is the Comparative Data You Should Use to Evaluate Your Benefit Plans

The IRS Has Lowered the HSA Family Contribution for 2018

New: The IRS Has Lowered the HSA Family Contribution for 2018

03/07/2018

 

On Monday, March 5th the IRS said in a service bulletin that it has recalculated the maximum amount that a family can contribute to a health savings account (HSA) in calendar year 2018, reducing it by $50 to $6,850. It had previously announced the 2018 figure would be increased to $6,900.

 

This change was made, effective immediately, to reflect the Tax Cuts and Jobs Act of 2017, signed into law on Dec. 22, 2017. The law ties HSA limits and other employee benefits such as health flexible spending accounts (FSA), commuter plans and adoption assistance benefits to the chained consumer price index (chained CPI), reflecting a change in the way it previously calculated cost-of-living increases.

 

The HSA contribution limit change only applies to family-level coverage, leaving the individual contribution limit for HSAs in 2018 at $3,450. FSA limits were also not affected.

 

2018 Contribution and Out-of-Pocket Limits
for Health Savings Accounts and High-Deductible Health Plans

  2018
HSA contribution limit (employer + employee) Self-only: $3,450
Family: $6,850*
HSA catch-up contributions (age 55 or older)* $1,000
HDHP minimum deductibles Self-only: $1,350
Family: $2,700
HDHP maximum out-of-pocket amounts (deductibles, co-payments and other amounts, but not premiums) Self-only: $6,650
Family: $13,300

*IRS announced change on Monday, March 5, to the family HSA contribution limit.

 

Ensure your employees aren’t taxed for excess contributions

Any contribution to a family HSA account over $6,850 in 2018 will be considered an excess contribution, and will be hit by a 6 percent excise tax. To ensure that none of your employees are taxed in this way, you need to be able to identify those who have already contributed the maximum amount into a family account for 2018 (the excess contribution will need to be refunded). There is no grandfathering in for HSA accounts that were fully funded at $6,900 prior to the March 5, 2018 IRS notice.

 

There are two options for those that have already fully funded their family HSA account in 2018 at the previously announced 2018 amount of $6,900:

  • Leave the full amount ($6,900) in the HSA account and include the $50 as other income and pay the penalty
  • Take a distribution for HSA excess contribution for the $50, leaving the HSA balance at the new IRS family maximum of $6,850

 

You should also evaluate your employees’ payroll elections to determine if their contribution amounts need to be adjusted so that they don’t end up exceeding the annual limit.

In its recent bulletin, the IRS additionally defined a high-deductible health plan as a plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 for self-only coverage or $13,300 for family coverage. This definition has not changed since its previous announcement.

 

Stay up to date on the latest HSA news by following WEX Health on Twitter @wexhealthinc. And learn more about HSAs with our blog post that tells you everything you need to know about these tax-advantaged accounts.

Everything You Need to Know About Health Savings Accounts

Everything You Need to Know About Health Savings Accounts (HSAs)

02/27/2018

 

If you have questions about health savings accounts, we have answers:

 

1. What is an HSA?

A health savings account (HSA) is a tax-advantaged account established to pay the current and future qualifying medical expenses of the account holder, the account holder’s spouse and all of the account holder’s tax dependents. With money from this account, you pay for healthcare expenses that are not covered by the account holder’s HSA eligible health plan.

 

2. Am I eligible to have an HSA?

To put money into a health savings account, you are required to have an HSA eligible health plan— sometimes referred to as a consumer-directed health plan (CDHP) or high-deductible health plan (HDHP)—in effect on the first day of the month.  Additionally, you are not permitted to have any other health coverage that reimburses non-preventative products and services below the deductible, and you cannot be enrolled in Medicare or be claimed as a tax dependent on someone else’s tax return.

 

3. What is a high-deductible health plan (HDHP)?

An HDHP is simply health insurance that meets certain minimum deductible and maximum out-of-pocket expense requirements set forth by the IRS.

 

4. What are the benefits of having an HSA?

Health savings accounts in many ways offer something for everyone, offering you a way to gain some financial security today and in the future. As triple tax-advantaged accounts, health savings account contributions can be deducted pretax from your paycheck, lowering your taxable income; any interest or investment gains on the money is tax free; and withdrawals from an HSA are tax free, as long as the money is spent on qualified medical expenses.

 

5. What qualifies as IRS-qualified medical expenses?

HSA funds may be used tax-free when paying for qualified medical expenses as described in section 213(d) of the Internal Revenue Service Tax Code.  A list of these expenses can be found on the IRS website at www.irs.gov in publication 502 – Medical and Dental Expenses.

 

6. Can I take money out of my HSA for non-medical expenses?

Yes, but if you withdraw money to pay for something other than a qualified medical expense, you will have to include that distribution as other income when filing taxes and pay an additional tax of 20 percent penalty on the amount used for a non-qualified expense.

 

7. Do HSA funds rollover?

Yes, any unused funds are yours to retain in the health savings account and accumulate toward future healthcare expenses. Your HSA is portable, meaning that you can take it with you if you change employers and into retirement where funds may be used for non-qualified medical expenses without being subject to the 20 percent penalty.

 

8. What’s my HSA contribution limit?

The IRS provides inflation-adjusted health savings account contribution limits each year. For 2018, if you’re covered by an individual HSA eligible health plan, sometimes referred to as a consumer-directed health plan (CDHP) or high-deductible health plan (HDHP), the IRS allows you to put as much as $3,450 into your health savings account (HSA). If you’re contributing to an HSA and on a family CDHP, the maximum amount that you can contribute is $6,900.

 

If you’re 55 or older, you can contribute an extra $1,000 annually for a total of $4,450 or $7,900 for account holders on a family plan—with catch-up contributions accepted at any time during the year in which you turn 55. These HSA contribution limits are new for 2018 and just slightly higher than in 2017—$50 more for self-only coverage and $150 more for those on a family plan.

 

Need help determining how much you should set aside in your HSA each month to reach your retirement savings goal? WEX Health provides a free HSA Goal Calculator that you can use to determine the right amount for you.

 

9. Are HSAs used to pay for current medical expenses or to save for retirement?

Either or both. Because healthcare costs during retirement can be daunting, HSAs have become a favorite way to put money away for future medical bills while lowering taxable income. One oft-cited estimate from Fidelity: A 65-year-old couple retiring in 2017 can expect to spend an average of $275,000 on medical expenses throughout retirement. This is up from $260,000 in 2016, so one can only imagine how staggering this figure will become for those retiring a few decades from now.

 

10. What’s this I hear about investing my HSA dollars?

An health savings account is an excellent savings vehicle for healthcare costs during retirement, but few people have discovered that they can maximize their account’s long-term savings potential by investing their contributions in stocks, mutual funds and other investment vehicles. Studies show that HSA holders who take advantage of investments often have substantially higher account balances. Devenir reports that the average balance of an HSA investment account is six times larger than a non-investment holder’s average HSA balance. Over time, the savings advantage continues to multiply: The Employee Benefit Research Institute found that HSA investment accounts opened in 2005 had an end-of-year balance in 2016 that averaged $31,239 compared to average balances of $7,233 in accounts without investments.

 

11. What does WEX Health have to do with HSAs?

Through our WEX Health Cloud platform and our vast network of partners, WEX Health is currently powering more health savings accounts than any other HSA platform in the country.

 

We provide a variety of user-friendly tools to HR professionals, benefits leaders and consumers that empower them to find ways to save money and control healthcare costs with HSAs and other consumer-directed healthcare accounts.

 

For consumers: With the WEX Health Cloud Consumer Portal, Mobile App and WEX Health Payment Card, consumers have the ease of paying for their out-of-pocket healthcare expenses in a quick and efficient manner. Not only can they use the app to check available balances, view HSA transaction details, make contributions and take distributions, but also they can now conveniently log in using Touch ID. Consumers can also simply swipe their WEX Health Payment Card, and the funds are automatically deducted from their HSA for payment.

 

For employers/HR pros/benefits leaders: WEX Health Cloud was designed to make things easier for employers, not harder. With our WEX Health Cloud Employer Portal and Employer Dashboard, employers and benefits professionals can gain access to an overview of employees’ healthcare spending and saving habits. As of November 2017, the dashboard also includes an innovative new method for assessing an employee base’s ability to pay for out-of-pocket expenses through the Health Financial Viability Index. This data is a key indicator of employees’ financial health and helps employers gain visibility into how their employees are spending their HSA dollars, so they can select plans that best fit their needs. The new HSA Advance functionality gives employers the option to offer employees the ability to “borrow” from their future HSA contributions while providing flexibility in employer management of the program.

 

Today’s workers and employers are utilizing HSAs more than ever. We tell you why on

What You Need to Know About Your HSA at Tax Time

What You Need to Know About Your HSA at Tax Time

02/19/2018

 

While many of us are already planning how we’ll spend our tax refund, we have to get our returns filed first. Before you decide to spend it on a vacation or your next remodel project, how can you invest your money to go further and help you tackle the rising cost of healthcare? In this post, we offer a suggestion along with a few other things that health-savings accountholders should keep in mind during tax season:

 

HSA contributions and distributions are non-taxable—unless you withdraw money to pay for something other than a qualified medical expense. If this is the case, you will have to pay an additional tax of 20 percent on the taxable portion of your distribution. You will calculate this tax amount using Form 8889 and will need to report the taxable amount on the “other income” line of your tax return, writing “HSA” beside it.

 

You can direct-deposit your refund into your HSA.

 

The average tax return last year was $3,120. By directing your refund to deposit directly into your HSA account, you’ll be ahead of the game for saving for medical expenses in 2018—or for healthcare expenses during retirement. (The annual HSA contribution limit for individuals with single medical coverage in 2018 is $3,450.) While this may not be the most exciting use of your tax refund, it may be among the wisest, especially when planning for retirement, as retirees who take money out of an IRA or 401(k) to pay for medical expenses will be taxed on these withdrawals. When they pay medical bills from an HSA, however, they will never be taxed. E-filing and selecting the direct deposit option is also the quickest way to get your return. Ninety percent of returns that are filed this way are received within a few weeks, while mailing in a paper return can require a six- to eight-week wait.

 

You will need to file a Form 1099-SA if you’ve taken money out of your HSA for any reason.

 

To report distributions from an HSA, you must file this form, which the custodian of your HSA is required to file and send to you. The form essentially notifies the IRS that money has left your HSA account. Because the government will also want to be sure you’ve spent any money you’ve withdrawn from your account on qualified medical expenses, this is the form where you will note whether or not you’ve held up your end up the HSA bargain with the government, so to speak.

 

You will also need to file Form 8889 to verify that you spent your distributions on qualified medical expenses.

 

If you made contributions to, or received distributions from, an HSA in 2017, you will also need to attach Form 8889 to your tax return. On this form, you will report these deposits and withdrawals (including those made on your behalf or by an employer) and determine your HSA deduction and the amounts you must include in income. Form 8889 will also help you figure the tax you will owe if you withdrew money from your HSA to pay for things other than qualified medical expenses.

 

On the subject of tax returns, the Internal Revenue Service urged taxpayers again this week to watch out for erroneous deposits from the IRS in their accounts. Following a breach of tax practitioners’ computer files, scammers have now filed several thousand false returns, using taxpayers’ real bank accounts for the deposits. The taxpayers who receive the deposit then receive an automated call purported to be from the IRS. According to the IRS, “Thieves are then using various tactics to reclaim the refund from the taxpayers, and their versions of the scam may continue to evolve.”

 

Americans have until April 17, 2018, to file their 2017 tax returns—this year, we get two extra days because April 15 falls on a weekend and April 16 is Emancipation Day, a legal holiday recognized in Washington, D.C.

 

To determine how much you should contribute to your HSA each month, read this post by Jason Cook, WEX Health’s vice president of healthcare emerging market sales.

What Is a QSEHRA?

What Is a QSEHRA?

02/13/2018

by Becky Kinder

 

We know, there are far too many acronyms in healthcare, but QSEHRA is an important one! And since it’s on the newer side, it’s led more than a few people straight to the Google search bar.

 

QSEHRA stands for “Qualified Small Employer Health Reimbursement Arrangement” (HR 5447). Also known as “a small business HRA,” it’s becoming a popular employee health coverage option that was established and signed into law in December 2016 as part of the 21st Century Cures Act.

 

QSEHRAs have effectively provided small business owners with smarter healthcare options with less overhead and more cost effectiveness. These plans are designed to assist employees with insurance premiums from a plan of their choosing, and in some cases, the HRA will also cover other medical expenses.

 

It’s a great option for small employers: employers set the amount that they can afford to provide employees (as long as it falls within the legal limits) and employees are reimbursed for the expenses the plan allows for.

 

Employers who offer QSHRAs must have fewer than 50 full-time employees and must not offer traditional employer-sponsored group health offerings (including dental or vision) to any of its employees.

 

With its Notice 2017-67, the IRS issued further guidance on QSEHRAs, including the rules and requirements for providing a QSEHRA, the tax consequences of the arrangement and the requirements for providing employees with written notice of the arrangement.

Public comments on the IRS’s guidance were accepted through Jan. 19. The notice also established that the deadline to submit initial notices for 2017 QSEHRAs and 2018 QSEHRA plans beginning Jan. 1, 2018, is Feb. 19, 2018.

 

To learn more about QSEHRAs and the QSEHRA-related guidance issued by the IRS, review our post here.


What Is a QSEHRA? by Becky Kinder

Becky Kinder

Product Manager, WEX Health

As a seasoned member of our Product Management team, Becky drives the definition and development of features for several different functional areas of the software, serving as the voice of our partners, employers, and consumers to our development teams. Specific areas of focus include notional accounts, debit card, admin operations, and the consumer and employer portals. Becky has over 15 years’ experience collaborating on the delivery of technology solutions for the IT and healthcare industries. Since joining the team in 2007, she has defined and launched hundreds of features on WEX Health Cloud platforms.

 

What You Need to Know About Data Security and Wearable Devices in the Workplace

What You Need to Know About Data Security and Wearable Devices in the Workplace

02/02/2018

 

Now that wearables and smart technology devices are frequently used to incentivize and measure participation in workplace wellness programs, activity trackers have emerged as an important—and sometimes debated—link between employee and employer.

 

Concerns about personal data and activity trackers made the news (again) this week, with reports that U.S. soldiers may have inadvertently revealed the locations of remote military bases in Iraq, Afghanistan and Syria by publicly sharing their jogging routes via the Strava fitness app.

 

And during a series of meetings last year between Apple and Aetna, Aetna employees’ questions about the safety of the data on their employer-provided Apple Watches ended up dominating the discussion—and the news media’s coverage of that discussion. By way of background, Aetna partnered with Apple in 2016 to provide select large employers and individual customers with Apple Watches, as well as offering to reimburse all 50,000 of its own employees for the watches. Apple has stressed that health information is only shared with user consent, and Aetna is continuing to gather feedback from its employees about whether or not the watches have had an impact on their nutrition and exercise habits.

 

Of the Apple/Aetna meetings, CNBC reported, “One of the biggest concerns with companies like Apple and Fitbit collecting health information, like steps and heart rate, is that it could get into the wrong hands. These fears are amplified as technology companies strike deals with self-insured employers and health plans.”

 

So what are employers and health insurers doing with the data they collect from activity trackers? The large majority of those employers are doing nothing with it and are providing employees and/or their customers with wearable devices only to encourage health and wellness in hopes of increased productivity and engagement and decreased healthcare costs.

 

Though it’s now common across industries, the trend of doling out activity trackers to employees and customers was popularized by healthcare companies. Back in 2014, tech startup Oscar made headlines when it partnered with Misfit, a wearable device company, to link its customers’ biometric information straight to their health insurance, presenting Amazon gift cards to those who met their fitness goals.

 

Since 2016, UnitedHealthcare has awarded employees who meet fitness goals (as measured by their wearable devices) with monetary prizes and credits that can be applied to a health savings account or health reimbursement account. The company’s vice president of emerging products recently reported that its program, which it calls “Motion F.I.T.”, has yielded “very impressive” engagement and activity rates. And, as part of its Wellvolution program, Blue Shield of California leverages the Walkadoo app, which keeps track of activity and allows employee participants to earn awards such as Fitbits and Visa gift cards. It has since also invited some of its plan participants to engage with the app in exchange for awards. OptimaHealth, Cigna, Humana and other insurers additionally offer their members discounts and rewards tied to activity trackers.

 

Even as activity trackers have provided impetus for some corporate employees to prioritize their health, the practice of incentivizing with them has, in some ways, heightened the tension between personalized medicine and private information. Workplace wellness programs that are offered by group health plans to group health plan participants only are covered by Health Insurance Portability and Accountability Act (HIPAA) privacy and security rules, while wellness programs offered to all employees, however, are likely not covered by HIPAA.

 

Just last week we reported on a new ruling from a federal district court in Washington, D.C., in which the U.S. Equal Employment Opportunity Commission (EEOC) has been ordered to alter its rules on employer-sponsored wellness programs that financially penalize employees who refuse to provide personal medical and genetic information. As wearable healthcare technology grows more sophisticated, we suspect that the number of questions it raises will continue to grow, as will the opportunities it creates.

 

For more on the role of smartphones and apps in personal health management, read our blog about trends in remote health monitoring.

How Much Should You Be Contributing to Your HSA

How Much Should You Be Contributing to Your HSA?

01/29/2018

by Jason Cook

 

How much should I deposit into my health savings account each month?

 

The short answer: The maximum prorated amount permitted by the IRS; if that’s financially viable.

 

The slightly longer answer: If you’re covered by an individual consumer directed health plan (CDHP), the IRS allows you to put as much as $3,450 per year into your health savings account (HSA). If you’re contributing to an HSA, and on a family CDHP, the maximum amount that you can contribute is $6,900 per year.  If you’re 55 or older, you can contribute an extra $1,000 annually for a total of $4,450 or $7,900 for account holders on a family plan—with catch-up contributions accepted at any time during the year in which you turn 55.

 

These HSA contribution limits are new for 2018 and just slightly higher than in 2017—$50 more for self-only coverage and $150 more for those on a family plan. (Refer to our blog post for an explanation of all of the IRS’s changes to contribution limits on health savings accounts and high-deductible health plans in 2018.)

 

HSA holders are advised to deposit the maximum amount each year because the dollars going into these accounts are tax advantaged. Contributions made to the HSA are not taxed, earnings on interest and investment gains are not taxed and distributions for qualified medical expenses, taken today, or at any point in the future, are not taxed- The triple tax advantage!  Further, balances roll over at the end of each year, can be taken from job to job, and even into retirement.  This is the portability benefit that ensures account holders are able to save long term for future medical expenses.

 

One oft-cited estimate from Fidelity: A 65-year-old couple retiring in 2017 can expect to spend an average of $275,000 on medical expenses throughout retirement. This is up from $260,000 in 2016, so one can only imagine how staggering this figure will be for those who will be retiring a few decades from now.

 

Monthly cash flow is certainly a concern for all and if you’re uncomfortable contributing the IRS annual max to your HSA through pre-tax payroll contributions, contribute the maximum amount that you are comfortable with. An often overlooked benefit that an HSA affords is the ability to contribute post tax dollars and take an above the line deduction; essentially reducing taxable income for every post tax dollar that’s contributed to the HSA.  Further, account holders have up until tax filing of the following year to make these post tax contributions for the previous year.

 

At first glance, contributing $3,450 or $6,900 to an HSA in one year may sound unimaginable.  But when taking into account the premium savings of a CDHP, compared to a traditional health plan, plus tax savings gained through contributing to an HSA, it becomes more realistic.

 

Need help determining how much you should set aside in your HSA each month to reach your retirement savings goal? WEX Health provides a free HSA Goal Calculator that will help you determine the right amount for you, taking into account your health plan coverage type, deductible amount, number of years before retirement, monthly healthcare expense and more.

 


Jason Cook WEX Health

Jason Cook

Vice President, Healthcare Emerging Market Sales, WEX Health

WEX Health is an organization with a mission to simplify the business of healthcare and healthcare payments. As part of this mission, Jason Cook is focused on health savings account (HSA) growth across all verticals and partner channels.