Category:
Legislation

There’s a New Way to Test Americans’ Financial Health and It’s the Most Comprehensive Yet

11/26/2018

by Chris Byrd

 

Our friends at the Center for Financial Services Innovation (CFSI) have been contributing incredible work to the cause of both understanding and improving the financial health of Americans. Now, in new groundbreaking research on the financial lives of Americans, they explore this critically important issue more deeply than ever before. The report, called the U.S. Financial Health Pulse, argues that though facts are readily available on how millions of Americans are struggling with everything from credit card debit to student loans to insufficient retirement savings, it’s not enough to look at these individual markers to measure their financial health.

 

Instead, CFSI recommends looking at a bigger picture that considers the totality of an individual’s financial life: “Unlike abstract figures like GDP, financial health is a nuanced metric that assesses whether Americans are spending, saving, borrowing and planning in a way that will set them up to be resilient and pursue opportunities over time.” To assess financial health, CFSI has created a framework called the CFSI Financial Health Score that leverages consumer surveys and transactional data for demographic characteristics, financial behaviors and socioeconomic trends. The score sorts Americans into three financial health tiers: Financially Healthy (28 percent of Americans); Financially Coping (55 percent of Americans); and Financially Vulnerable (17 percent of Americans).

 

The entire report is worth a close read, but we pulled out some kernels that we think are the most relevant for WEX Health Partners:

 

Nearly half of Americans say their spending equaled or exceeded their income in the last 12 months.

 

Among respondents who said this, 43 percent said it’s because their spending was unusually high, their income was unusually low, or both. We know from other research that unplanned medical expenses are a leading cause; this squares with what 20 percent of the consumers (across the socioeconomic spectrum) who participated in our Clear Insights report earlier this year told us—that they would have to put a $1,000 unexpected medical bill on their credit card.

 

Low savings balances obscure the fact that many Americans are saving when and where they can.

 

CFSI points out that 79 percent of respondents said they are saving regularly or whenever possible in savings accounts, while 76 percent said are saving regularly or whenever possible in cash. Further, 70 percent of respondents said they are saving regularly or whenever possible in personal savings vehicles like mutual funds, money market accounts, stocks, certificates of deposit and annuities. Financially Healthy individuals reported liquid savings balances approximately four times higher than Financially Coping individuals and 30 times higher than Financially Vulnerable individuals. While many Americans lack sufficient liquid savings, it’s interesting and encouraging to learn that a full 28 percent of Americans (those in the Financially Healthy category) have money to save into tax-favored accounts that can be carried over and invested—i.e., health savings accounts (HSAs).

 

Forty-two percent of Financially Vulnerable individuals said debt has delayed or prevented them from seeking or receiving medical care.

 

With respect to the effect of health insurance on these decisions, 71 percent of Financially Vulnerable individuals and 88 percent of Financially Coping individuals have health insurance, compared with 98 percent of Financially Healthy individuals. This is key, as it shows the value of what many of us do to provide employees with an increasingly greater number of options that help employers balance and manage costs while providing safety-net coverage for employees.

 

Americans who experience workplace instability are falling behind as they strive for financial health.

 

Employees who have unpredictable schedules and volatile wages are less likely to be Financially Healthy than those who have predictable schedules and steady wages. Lower-income Americans are most affected by instability in the workplace; this group also stands to gain the most from employee-provided benefits, such as healthcare and paid leave. In so many ways, this underscores the importance of our work at WEX Health to deliver products that help minimize the volatility of unexpected healthcare spending on overall financial challenges.

 

For more insights on Americans’ financial health, read CFSI’s U.S. Financial Health Pulse in full here.

 


Chris Byrd

Executive Vice President, WEX Health Operations & Corporate Development Officer

Chris Byrd brings more than 25 years of experience in employee benefits and banking to his role at WEX Health. A founder of Evolution Benefits in 2000, Chris played a key role in designing the proprietary architecture for the company’s prepaid benefits card.

Chris oversees the daily execution of WEX Health’s business and leads the company’s operations and service delivery, corporate development, merger and acquisition activity, and legal, industry, and government relations efforts.

He began his career in commercial banking, and prior to 2000, he focused on finance, strategy, and business development for Value Health and two start-up healthcare companies. He joined WEX Health in July 2014.

Chris, who serves on numerous industry boards, is a frequent speaker on emerging trends in financial services and benefits and is active in industry and government relations. He earned a degree in economics from Brown University.  


6 Best Practices for Engaging Employers and Members with CDHP Plans

10/26/2018

by guest blogger Kathy Anderson, senior manager CDHP operations, HealthPartners

 

I recently worked with Jeff Bakke, WEX Health’s chief strategy officer, to cohost an America’s Health Insurance Plans (AHIP) webinar on consumer-directed healthcare plans (CDHPs) and how they can be used to improve employer partnership and member engagement. In addition to sharing the full webinar with WEX Health Partners (access it here), I’m highlighting some of the best practices that Jeff and I have come across in our work at our respective companies.

 

As uncertain out-of-pocket expenses and rising deductibles combine to put financial strain on more Americans, Jeff and I have both become passionate about the role that CDHPs can play in reducing financial stress and empowering employees to successfully manage their healthcare expenses. But first the challenge is to educate both employers and employees about the plans and to engage them with the accounts before and after open enrollment. Here are six of the chief learnings that Jeff and I shared in our webinar about maximizing engagement with CDHPs:

 

  1. Get involved as early as possible with a new employer. Getting on the same page with an employer is a must. If possible, review their existing plan documentation early on, and gain an understanding of their employee populations and how to best reach them. Not only will this inform your recommendations going forward, but it will allow you to inject account-based plans into the conversation from the beginning.

 

  1. Don’t overwhelm employees with information during open enrollment. Instead, give them the personalized experiences and communications they need when they need it. People can consume only what’s relatable to them in the present. Consider how you can deliver individual employee guided tours, and when certain tips and resources will be best received. Learn more about what consumers care about during open enrollment.

 

  1. Maintain personal touches with employees post-enrollment. Look for ways to continue to create in-person touchpoints with employees, whether with an outreach call after they experience their first medical claim with an HRA account or by hosting a brown-bag session where employees can have their individual questions about their CDHP answered. Here are some more examples of effective uses of personalization in healthcare benefits.

 

  1. When person-to-person isn’t feasible, email is the next best way to communicate. Some employees prefer paper, depending on industry and demographics, but overall, email is the preferred method for employees to receive information about their CDHP accounts. We’ve also learned that, for quick updates, people prefer text messages or automated notifications—e.g., “Your HSA available cash balance is below $250.00.”

 

  1. Help employees track and measure their healthcare goals online. Beyond just working with employees to establish an HSA or HRA savings goal at open enrollment, it’s important to provide tools for employees to be able to measure and track their progress toward that goal and to make changes as needed. Learn more about consumer-driven health and mobile technology.

 

  1. Give employees ongoing access to online tools and resources. Employees need to be able to have their account information at their fingertips when they want it. Dashboard views can give employees a consolidated snapshot of their experience and how their plan is working. People generally don’t spend a lot of time making decisions about their healthcare benefits, but if we can give them the data in an easy-to-use, accessible way, they’re more inclined to make better decisions as they move forward with their plans.

 

We invite you to watch our webinar in full here. And learn more about how personalizing is a key strategy for simplifying the business of healthcare.

 


Kathy Anderson

Senior Manager, CDHP Operations at HealthPartners

At HealthPartners, Kathy Anderson oversees the successful implementation of all Health Reimbursement Account and Flexible Spending Account plans. She partners with Sales to build and maintain strong client relationships and manages the daily administration of these products. She was also the Business Project Manager for the implementation of the WEX Health platform in 2016.

Prior to joining HealthPartners in 2001, Kathy worked as Manager of Health Plan Accounting at United Health Group and was an auditor at KPMG. Mrs. Anderson earned a Bachelor of Science degree in Management and Accounting from Drake University.


Trump Administration Proposes Plan for Employers to Use HRAs to Pay for Premiums

10/23/2018

by Chris Byrd

 

The Trump administration proposed a new regulation this morning that would expand the use of health reimbursement arrangements (HRAs), giving employers of all sizes additional flexibility to provide greater choice to their employees. The proposed regulations issued by the Departments of Labor, Health and Human Services, and Treasury, allow employers to offer HRAs for reimbursement of individual health insurance premiums. In addition, employers who offer group health insurance would be able to offer HRAs of up to $1,800 (indexed for inflation) to reimburse certain excepted benefits, such as standalone dental benefits and premiums for a short-term health insurance plan.

 

HRAs are employer-funded plans that reimburse employees for medical expenses not covered by company-sponsored insurance, but the Obama administration had forbidden the use of them to pay for premiums on the individual market.

 

Building on President Trump’s executive order from October 2017, which called for expanded availability and permitted use of HRAs, the newly proposed rule would seek to “expand opportunities for working men and women and their families to access affordable, quality healthcare” through changes to regulations under various provisions of the Public Health Service Act, the Employee Retirement Income Security Act and the Internal Revenue Code.

 

The proposed regulations will be open for comment for 60 days from the date of publication. The proposed effective date is for plans beginning on or after Jan. 1, 2020.

 

At a high level, the proposed regulations build on the Qualified Small Employer HRAs (QSEHRAs) that were created by the 20th Century Cures Act in 2016. QSEHRAs allow small employers (1-49 employees) to offer HRAs to reimburse individual insurance premiums and/or out-of-pocket healthcare expenses. The proposed regulations expand the use of HRAs for premiums to all employers, regardless of size.

 

Whether this will lead mid-sized and large employers to get out of the business of offering group health insurance remains to be seen and will depend in large part on such factors as relative costs in the individual and group markets (current big advantage to group health) and tax advantages associated with the employee-paid portion of group health premiums.

 

Another possible trend would be for employers to offer the HRA as an option on a menu alongside group health, so that the employee has a wider choice of insurance plans and, for lower-income workers, access to subsidies on the public exchanges.

 

The excepted-benefit HRA represents a new product that provides employers with another way to provide benefits beyond traditional health insurance. Keep in mind that, to offer this HRA, the employer must also offer group health insurance.

 

One thing is certain: The proposed regulations open up new product opportunities for administrators to provide to employers, and they would benefit those employers by enabling them to offer a wider choice of benefit options to their employees. This is consistent with other recent moves by the current administration, such as the expansion of short-term health insurance plans.

 

WEX Health will be studying the regulations carefully, commenting on them to regulators, working with our colleagues in the industry and making any platform changes required to accommodate these new and expanded products.

 

Learn more about HRAs on our blog, and follow us on Twitter to keep up with the latest changes impacting consumer-directed healthcare in the United States.

 


Chris Byrd

Executive Vice President, WEX Health Operations & Corporate Development Officer

Chris Byrd brings more than 25 years of experience in employee benefits and banking to his role at WEX Health. A founder of Evolution Benefits in 2000, Chris played a key role in designing the proprietary architecture for the company’s prepaid benefits card.

Chris oversees the daily execution of WEX Health’s business and leads the company’s operations and service delivery, corporate development, merger and acquisition activity, and legal, industry, and government relations efforts.

He began his career in commercial banking, and prior to 2000, he focused on finance, strategy, and business development for Value Health and two start-up healthcare companies. He joined WEX Health in July 2014.

Chris, who serves on numerous industry boards, is a frequent speaker on emerging trends in financial services and benefits and is active in industry and government relations. He earned a degree in economics from Brown University.  


Data Talks. Are You Listening

Data Talks. Are You Listening?

09/18/2018

by Becky Kinder

 

At the World Congress Health Plan Consumer Experience and Retention Summit last week, I spoke alongside two other panelists about the importance of listening to the many ways that data talks. My fellow panelists shared that by listening to data extracted from their call center, they had been able to improve the experience of their members—many of whom had questions about how much of their health plan deductible they had met. A simple analysis of call data allowed them to significantly improve an online experience for their members. When paired with the stat from our 2018 WEX Health Clear Insights report that nearly two-thirds of employees are somewhat or very worried about unexpected healthcare needs and associated costs, you get a sense that people can have high levels of anxiety about pre-deductible and unexpected out-of-pocket spending.

Data-listening made simple and actionable

At WEX Health, we work hard every day to help consumers be better prepared—and less worried—about healthcare expenses. One of the ways we do this is by listening to the vast amount of data that’s collected as consumers interact with their benefit accounts.

Data is only useful if you have the right tools to make it actionable.

 

To help our partners leverage data to guide consumers to take the next step, we built powerful analytics tools that reveal useful insights for us and our partners: administrators, employers and consumers.

The data-driven insights found within WEX Health Cloud can be used by our partners to drive a consumer experience that is highly personable and relevant to the next step that a consumer may need to consider. That next step can be small, like contributing through payroll to a health savings account (HSA) or enrolling in a tax-saving dependent care account. Or it can be very daunting—like deciding how and whom to pay when you or a family member succumb to illness. Regardless of where consumers are in their healthcare journey, we want to be there with technology that helps make a difference in their lives.

Using data to personalize outreach to different consumer groups

Listening to data is also important when it comes to understanding how to personalize and reach different consumer segments. For instance, by analyzing aggregate consumers’ interaction with our portals and mobile apps, we found the 35 – 44 age group was more engaged than the 18 – 25 age group. This was a bit of a surprise to some who assumed that the younger population of users would be more likely to use these online tools. Armed with this information, you would want to vary the experience. Online campaigns and engagement may be preferred for the older segment, while outbound phone calls, employer-sponsored events or more interactive experiences may work better for younger audiences. This example is also a good reminder that we must listen to data with “open ears” to avoid missing insights that don’t map to our preconceived notions.

Data inevitably reveals a wealth of ideas that you can translate into action. I’m excited for what WEX Health will uncover as we continue to listen to data, and I’m even more excited about what we will be able to deliver into the hands of consumers through our continuous study. My hope is that we will reduce stress and anxiety and help consumers feel better about their financial wellness.

 

If you have not yet seen the 2018 WEX Health Clear Insights report, you can download it using this link. Also, see this recent blog post exploring the ways that WEX Health Cloud capabilities can be used to analyze, segment and effectively engage with consumers.


What Is a QSEHRA? by Becky Kinder

Becky Kinder

Director, Product Management at 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.

 

Everything You Need to Know About Last Week’s Congressional Hearings on HSAs

Everything You Need to Know About Last Week’s Congressional Hearings on HSAs

06/14/2018

by Chris Byrd

 

Last week, two separate congressional committees convened to explore how consumer-directed healthcare plans (CDHPs) and high-deductible health plans (HDHPs), when paired with health savings accounts (HSAs), can make healthcare more affordable and accessible for Americans. American consumers have established more than 22 million HSAs, a figure that has grown steadily in recent years and is expected to reach 27.5 million by 2019.

 

On Wednesday, the House Ways and Means health subcommittee held a Capitol Hill hearing on the role of CDHPs in expanding access to healthcare, lowering healthcare costs and increasing the number of choices available to consumers. The hearing addressed everything from trends in HSA enrollment to policies that would give more consumers access to tax-advantaged savings accounts.

 

It began with a testimony by Health Subcommittee Chairman Peter Roskam, who said, “Healthcare reform should empower individuals and families to make decisions for themselves based on what fits their needs and budget. One of the best tools we have to accomplish this goal is consumer-directed health plans that are paired with HSAs. These plans offer lower premiums and a higher deductible to encourage better use of healthcare services. Engaging consumers in their healthcare spending is critical to reining in our system’s ever-increasing costs.”

 

Other experts who spoke at the hearing include Roy Ramthun, president of HSA Consulting Services; Matt Eyles, president and CEO of America’s Health Insurance Plans (AHIP); Jody Dietel, chief compliance officer for WageWorks; and Sherry Glied, dean of New York University’s Robert F. Wagner Graduate School of Public Service.

 

The following day, the Joint Economic Committee also met to discuss the potential for HSAs to engage patients and bend the healthcare cost curve. Including members of both the House and the Senate, the committee reviews economic conditions and recommends improvements in economic policy. Among those who spoke at its most recent hearing, Kevin McKechnie of the HSA Council, Tracy Watts of Mercer and the American Benefits Counsel and Dr. Scott Atlas of the Hoover Institution explored statistics on the adoption and usage of HSAs, their effect on healthcare expenditures and both the short and long-term effects of greater adoption of CDHPs and HDHPs/HSAs respectively.

 

Dr. Atlas concluded his testimony with this call to action: “Expanded, liberalized and transferable HSAs represent a key instrument in an overall strategy of broadening access to affordable, high quality healthcare for everyone. If appropriately designed, HSAs represent a strong incentive to consider price and value for those seeking medical care. HSAs offer more effective incentives than tax deductions for health expenses. HSAs have been proven to reduce the cost of medical care for individuals, and also to improve health by increasing the use of validated wellness programs. While expanded HSAs alone are not necessarily a panacea, they are a critically important and effective step.”

 

At the crux of both hearings last week was the assertion that as CDHPs become of increasing importance to Americans, more legislation is needed to make them even more beneficial to consumers; this would require numerous amendments to the tax code.  According to McKechnie “These ideas are vetted, bipartisan, and affordable. Some would actually save taxpayer money. Individually and together, they can dramatically strengthen the proven, successful HSA model.”

 

The House Ways and Means health subcommittee hearing, which streamed live on the web, can be viewed in full below.

 

 
The Joint Economic Committee’s hearing on HSAs can also be viewed in full below:

 

Health savings accounts in many ways offer something for everyone. To learn more about their advantages, read our blog post here.

 


Chris Byrd

Executive Vice President, WEX Health Operations & Corporate Development Officer

Chris Byrd brings more than 25 years of experience in employee benefits and banking to his role at WEX Health. A founder of Evolution Benefits in 2000, Chris played a key role in designing the proprietary architecture for the company’s prepaid benefits card.

Chris oversees the daily execution of WEX Health’s business and leads the company’s operations and service delivery, corporate development, merger and acquisition activity, and legal, industry, and government relations efforts.

He began his career in commercial banking, and prior to 2000, he focused on finance, strategy, and business development for Value Health and two start-up healthcare companies. He joined WEX Health in July 2014.

Chris, who serves on numerous industry boards, is a frequent speaker on emerging trends in financial services and benefits and is active in industry and government relations. He earned a degree in economics from Brown University.  


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

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

3/20/2018

by Chris Byrd

 

We’ve just returned from Capitol Hill, where WEX Health attended the nonprofit Employers Council on Flexible Compensation (ECFC) 37th annual conference, March 14-16, to promote choice in benefit solutions. Much of the conversation in D.C. this year was around three major issues which affect tax-advantaged health benefit accounts that are a central element of a Consumer-Directed Health strategy:

 

  1. The Excise Tax on High-cost Health Plans.

Commonly known as the Cadillac Tax, this provision of the Affordable Care Act has been delayed yet again until 2022. Although this is helpful for employers concerned by the implications of this tax – especially those in high-cost states – a delay only defers this issue and does not represent a final resolution.  Given that many employers set their benefit strategies years in advance, 2022 is not terribly far away.  Among the actions employers are already taking or evaluating is curtailing or eliminating Flexible Spending Accounts (FSA) and Health Savings Accounts (HSAs) from their benefit offerings.  Employee contributions to these accounts are counted toward the computation of whether the employee’s benefit plan exceeds the excise tax threshold.  Efforts continue to repeal the tax entirely, but if full repeal cannot be accomplished, to reform the tax by excluding employee contributions to CDH accounts.

 

  1. Strengthening HSAs.

Numerous bills have been introduced in both chambers of Congress to increase the availability and utility of HSAs to help individuals and families plan for and fund their health care needs.  The focal point of discussion is around the HSA “gold standard” bills – S. 403 and H.R. 1175.  These bills include a broad range of important provisions, including an increase in contribution amounts, allowing Medicare-eligible workers to continue contributing to an HSA, and restoring the tax-advantaged treatment of over-the-counter drugs and medicines.  In addition to these bills, there is increased discussion regarding a proposal to allow HSA-qualified health insurance plans to cover certain chronic-care conditions below the deductible.  This idea actually originated with the employer community and is now gaining traction.

 

  1. Supporting and Enhancing FSAs.

As are an important option for employees, particularly since surveys indicate the vast majority of employers offer traditional health insurance that is not HSA-qualified as one of their options in their benefit plans. H.R. 1204 would raise the limit that an employee may contribute to an FSA from $2,650 to $5,000.  This would benefit individuals and families with high healthcare costs, particularly those dealing with chronic conditions.

 

Based on what we heard in D.C., prospects for near-term action on these issues are somewhat limited.  It is, after all, an election year, and as the calendar advances, the ability to move legislation that isn’t “must pass” becomes more challenging.  In the healthcare arena, the biggest issues are the opioid crisis, stabilizing the individual insurance market, and prescription drug pricing/affordability.  In addition, the administration continues to advance regulatory reform, including supporting innovation and flexibility in plan design, distribution, and state regulation and programs (e.g. Medicaid).  With all this said, however, HSAs also continue to occupy an important place in the administration’s healthcare policy, and so there may be an opportunity to advance provisions that would strengthen these accounts.

 

As we have seen in the past, the healthcare landscape in Washington is highly fluid, so the best advice is to stay tuned for updates and developments as they happen

 


Chris Byrd

Executive Vice President, WEX Health Operations & Corporate Development Officer

Chris Byrd brings more than 25 years of experience in employee benefits and banking to his role at WEX Health. A founder of Evolution Benefits in 2000, Chris played a key role in designing the proprietary architecture for the company’s prepaid benefits card.

Chris oversees the daily execution of WEX Health’s business and leads the company’s operations and service delivery, corporate development, merger and acquisition activity, and legal, industry, and government relations efforts.

He began his career in commercial banking, and prior to 2000, he focused on finance, strategy, and business development for Value Health and two start-up healthcare companies. He joined WEX Health in July 2014.

Chris, who serves on numerous industry boards, is a frequent speaker on emerging trends in financial services and benefits and is active in industry and government relations. He earned a degree in economics from Brown University.  


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.

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.

 

IRS Issues Guidance on Small Employer HRAs

IRS Issues Guidance on Small Employer HRAs

11/03/2017

by Chris Byrd

 

This week, the IRS released guidance (Notice 2017-67) addressing qualified small employer health reimbursement arrangements (QSEHRA).

In the form of 79 questions and answers, the IRS explains the rules and requirements for providing a QSEHRA under section 9831(d) of its code, the tax consequences of the arrangement and the requirements for providing written notice of the arrangement to employees. A qualified small employer HRA may be offered by employers that have fewer than 50 full-time employees and do not offer group health plans to any of their employees.

The proposed guidance attempts to respond in part to President Trump’s executive order of Oct. 12, which called for expanded availability and permitted use of HRAs. It should be noted, however, that the response is only in the context of QSEHRAs and does not address potential further expansion of HRAs. The primary purpose of the proposed guidance is to address many questions that have arisen since QSEHRAs were created last December.

The guidance is intended to be incorporated into proposed regulations to be issued by the IRS and Treasury Department. It provides for public comments on the guidance and the proposed regulations through Jan. 19, 2018.

Chris Byrd, WEX Health’s executive vice president of operations, says, “The IRS ruling is proposed and not final. It answers many, if not most, of the questions that the industry had asked it to. That’s good, as it eliminates some of the uncertainty about how these accounts are to be administered, which should help adoption of QSEHRAs. Much of what is outlined is helpful, but it’s not perfect, and I would expect we and other industry participants will provide input during the comment period.”

HRAs were created by the IRS in 2002 to allow employers to fund medical care expenses for their employees on a pre-tax basis. In December 2016, the 21st Century Cures Act additionally created QSEHRAs, amending the IRS code, Patient Protection and Affordable Care Act and other laws to exempt QSEHRAs from certain requirements that apply to group health plans.

To read the IRS’s notice in full, go here.

 


Chris Byrd

Executive Vice President, WEX Health Operations & Corporate Development Officer

Chris Byrd brings more than 25 years of experience in employee benefits and banking to his role at WEX Health. A founder of Evolution Benefits in 2000, Chris played a key role in designing the proprietary architecture for the company’s prepaid benefits card.

Chris oversees the daily execution of WEX Health’s business and leads the company’s operations and service delivery, corporate development, merger and acquisition activity, and legal, industry, and government relations efforts.

He began his career in commercial banking, and prior to 2000, he focused on finance, strategy, and business development for Value Health and two start-up healthcare companies. He joined WEX Health in July 2014.

Chris, who serves on numerous industry boards, is a frequent speaker on emerging trends in financial services and benefits and is active in industry and government relations. He earned a degree in economics from Brown University.  


Retirement Savings Account Limits to Increase in 2018, as Tax Reform Brings Talk of Capping 401(k) Contributions to Forefront

Retirement Savings Account Limits to Increase in 2018, as Tax Reform Brings Talk of Capping 401(k) Contributions to Forefront

10/27/2017

 

Last week, two notable retirement savings stories made the news: First, the IRS announced that it would increase the annual 401(k) contribution limit to $18,500—up $500 from this year’s limit. To reflect an increase in the cost-of-living index, new contribution limits will also apply to 403(b), most 457 plans and the federal government’s Thrift Savings Plan. Continue reading