Tag: healthcare flexible spending account

Year End Health Plan Checklist to Avoid Costly Decisions

Before you head into a new calendar year, now’s the time to take inventory and prepare yourself for the unexpected with your health insurance plan. Here are a few items to consider:

Is your health plan changing?
Remember, deductibles and out-of-pocket credits don’t rollover
Did you get your preventive care check-up this year?
Spend your FSA plan balance or risk loosing it

While the majority of health plans renew as of January 1, a small number of plans renew at some point during the calendar year so these items can be applied when your plans’ renewal comes up.

Is your health plan changing as of January 1?

Whether your insurance company is changing (moving from say Aetna to Cigna) or you elected a new health plan through the same insurance company, pay attention to slight variations that may impact you personally.

Changing your health plan could mean a change in the In-Network providers. Is your doctor still in the plan? If you have out-of-network coverage with your plan, you can continue to see your doctor if they are no longer in-network, but you will now be required to pay higher out-of-pocket costs. What if you have a medical procedure scheduled for early next year or you frequent a specific laboratory for frequent blood work, will your procedures be covered as expected?

Prescription benefits can change even if your plan is remaining the same, especially the formulary drug list. A formulary drug list is a list of prescription drugs covered by a prescription drug plan. Lists are typically created as a means of negotiating better prices to due volume. You could have been taking one medication made by one manufacturer, but come to find out that it’s no longer on the formulary list. You may be forced to take a new drug made by a different manufacturer, or pay a higher price to keep the prior one.

Speciality medications are becoming more prevalent and also cost more money. As a result, special procedures and firms are now managing the fulfillment of speciality drugs. You may not be able to just visit your local pharmcy to get a drug filled. Specialty medications are often triaged to a pharmacy team at your health plan to help you manage your condition. This requires planning to ensure drug supplies are delivered timely, and if necessary that healthcare professionals are in place to administer the drug in your home. Check to see if your health plan instituted a new specialty medication process.

Deductibles and maximum out-of-pocket credits earned during the year do not rollover

You may want to get that visit in now before December 31 especially if you’ve met your deductible and you only have to pay co-insurance. Come January 1, your deductible resets to zero and you’ll have to pay out of pocket from dollar until you meet your deductible again.

Preventive Care is Covered Annually, Every 365 days

Whether its your medical, dental or vision plan, many services including preventive care are covered annually. However, this does not mean if you get your physical on November 15 you can get another physical on January 15. Most plans require you wait 365 days before your next preventive care visit is covered at 100%. Otherwise services will either be denied or covered like a sick visit (subject to deductible or not at 100%). In rare cases, your plan may cover preventive care on a true calendar year basis. Dental plans may cover check-ups in this manner.

Also, keep in mind that preventive care may be tied to your age. Most health plans must cover a set of preventive services — like shots and screening tests — at no cost to you when provided by a doctor or other provider in your plan. This includes plans available through the Health Insurance Marketplace®. You or your children may have crossed over into a new age bracket whereby preventive care tests may or may not be covered anymore. Recommend you read your health plan’s Summary Plan Description or the Summary of Benefits & Coverage to learnn more about what’s covered. You can also visit the Healthcare.gov site to learn more about preventive care.

Flexible Spending Accounts: Use it or Lose It

Healthcare FSA plans typically have a rollover feature for unused balances at the end of the calendar year. If you have more than the rollover limit, ideal for you to spend the excess funds now or make sure to submit your receipts to reimbursement before the claims deadline. The IRS rollover limit for 2021 is $550, but that does not mean all plans are required to allow the limit. In 2022, the IRS will allow plans to carryover $570 into 2023.

Summary of Action Items

Read your 2022 health plan materials and communications now to learn what changes to expect for 2022.
Visit your health plan online account to verify where you stand on your deductible and maximum out of pocket met YTD. Schedule visits before the end of the year.
Check to see if your prescription drug will be covered by the new plan.
Review your FSA account to identify balances and file claims timely. Visit the FSA Store if you need a way to spend down your FSA funds.
Contact your Human Resources/Benefits team or health plan to ask questions.

To learn more about increasing your health insurance literacy, order Maximize Your Health Insurance available on Amazon.

Know your HSA, HRA & FSA plans

Do you pay for out-of-pocket healthcare expenses using a health savings account, health reimbursement account and/or a flexible spending account?

Confused over which to use, how they overlap or whether to tap into them? You’re not alone. The rules can be complicated and unclear. If you’re not careful, you could leave money on the table.

FSA claim filing deadlines for 2019 calendar year are just around the corner.

Here’s a good primer from Cigna.

https://www.cigna.com/individuals-families/understanding-insurance/hsa-hra-fsa

Use it or Lose It: Healthcare Flexible Spending Account

clear glass with red sand grainer — Photo by Pixabay on Pexels.com

If you have a Healthcare Flexible Spending Account, you may be familiar with the Use it or Lose It concept. What exactly does this mean for you? As you approach the end of the year, focusing on your Healthcare Flexible Spending Account now may help save you money before it’s too late.

A Healthcare Flexible Spending Account, or “FSA,” is a pre-tax benefit account that you can use to pay for eligible medical, dental, and vision care expenses that aren’t covered by your health insurance plan. Additionally, the IRS who determines eligible expenses allows for reimbursement of expenses of many other healthcare related items if not reimbursed by your insurance plan.

You decide how much to contribute to your Healthcare FSA each year, and funds are withdrawn automatically from each paycheck for deposit into your account before taxes are deducted. The total amount you elect to contribute to your Healthcare FSA each year is available on the first day of your plan year. The benefit of a Healthcare FSA is two-fold: first, you lower your taxable base salary meaning you reduce the amount of tax paid, which then provides you more take home pay; and second, you pay for eligible healthcare items using pre-tax dollars.

The IRS determines the annual maximum contribution allowed, with employers determining whether to allow you to contribute that full amount or not. The annual IRS contribution limit to a Healthcare FSA in 2020 is $2,750.

Deadline to spend the funds?

Generally, you need to spend the funds in your Healthcare FSA within the plan year which constitutes the 12-month calendar year. However, your employer may provide you a grace period of 2-½ months after the end of the plan year to spend funds left in your account. Or your employer may allow you to carry over up to $500 left in your account into the next plan year.

Grace Period

If you have unused funds in your Healthcare FSA on December 31, you can use out-of-pocket expenses incurred through March 15 of the following calendar year to claim and get reimbursed for those unused funds. The claim filing period may be March 31 or April 30, best to check with your employer or the FSA vendor. After March 15, the unused funds are forfeited.

Carryover

If you have unused funds in your Healthcare FSA on December 31, up to $500 will rollover into the next calendar plan year. The $500 can be used to cover any eligible expense throughout the next calendar year, so you don’t lose it per se. The $500 rollover would be added on to any new Healthcare FSA goal you contribute to for that new calendar year. In 2020 the HCFSA contribution limit is $2,750. If you carried over $500, you would then have $3,250 available to claim in 2020, for example.

Get the Full Annual Goal Amount Back right away

One of the great features of a Healthcare FSA is the ability to get reimbursed for your full annual contribution goal before you’ve actually contributed the full amount through payroll contributions.

Say you set an annual Healthcare FSA contribution goal of $2,750 for the 2020 calendar year, and then get medical treatment on January 30 with an out of pocket of $2,750 (possible you had to meet your deductible first and pay 20% coinsurance). You could use the full $2,750 from your Healthcare FSA in February 2020 even though you haven’t contributed the full amount yet. Your employer will not come after you if you happen to leave the company later than year. One the flip side, there’s a small number of people in a plan who forfeit their Healthcare FSA balance. Therefore, it’s almost a wash for the plan. The employer tends to benefit as any forfeited amounts go back to the plan to help offset administrative costs associate to run the plan.

Still Have FSA Funds with a Prior Employer Account?

If you had a healthcare Flexible Spending Account with a prior employer, and then enrolled in a Healthcare FSA with a new employer, unused funds from that prior employer account don’t rollover into the new FSA. Typically, once you leave an employer the prior Healthcare Flexible Spending account funds expire and cannot be used for expenses with dates of service after the last day that plan was in effect. More importantly, those funds typically have a claim filing date which may be 2 ½ months into the calendar year.

Best advice is to spend any unused Healthcare FSA dollars prior to the termination date of that account.

Have Unused Funds to Spend?

The FSA Store (https://fsastore.com/) is a great option if you need to spend your Healthcare FSA dollars, especially if it’s near the end of the calendar year and you don’t expect to have any further healthcare expenses like visits to the doctor, dentist or vision provider to claim.

Items listed for purchase are already approved by the IRS.
You can use your Healthcare FSA debit card to purchase items.

Resources

Log into your Flexible Spending Account or call your FSA vendor for assistance.

Visit the IRS website to learn more about eligible FSA expenses https://www.irs.gov/forms-pubs/about-publication-502 .

Contact the Human Resources or Benefits team at your employer for support.

Share this:

Like this:

Share this:

Like this:

Share this:

Like this: