Healthcare Benefits Could Increase Significantly
Despite the many criticisms, there are still a number of positive things to expect under the new healthcare bill.
According to a report by HSA Bank, the bills proposed concentrate on providing more employee benefits in the form of health savings plans (HSAs).
Changes to HSAs under the New GOP Bill
HSAs are similar to retirement plans where employees or employers deposit contributions to the HSA account to be used for medical expenses which are not covered by their high-deductible health plans (HDHP). The contributions are tax-free, and will remain so if withdrawn by the employee when he or she turns 65.
Here are some changes that you can look forward to once the new GOP healthcare bill is approved and implemented.
1. Contribution limits for a health savings account of a High-deductible Health Plan will increase.
The 2017 contribution limits for HSAs is currently at $6,750 for a family coverage and $3,400 for a single employee benefits plan. These amounts are expected to increase to $13,100 for a family plan and $6,550 for a single employee benefits plan.
2. The ACA contribution limit for a flexible spending account (FSA) will be repealed.
Hourly workers who don’t have an HDHP will still get to enjoy a significantly higher amount of healthcare benefits to assist them in huge out-of-pocket expenses.
3. Spouses will be allowed to do catch-up healthcare benefits contributions to the same health savings account.
The biggest hindrance to maximizing contributions of spouses is the intensification of needing to create a 2nd account. Seniors can now maximize their employee benefits for retirement in terms of reduced administration costs and simplified benefits contribution process.
4. Requiring prescriptions for OTC medicines will be repealed as qualified healthcare benefits distribution from healthcare reimbursement arrangements (HRAs), FSAs and HSAs.
Even though the prices for buying OTC medicines have increased, repealing the requirement will instantly decrease healthcare expenses for those who use FSAs, HSAs and FSAs.
5. Penalties for non-qualified HSAs distributions made by hourly workers with age less than 65 will become lower.
These penalties were made to make sure that the HSAs are being used by hourly workers as healthcare benefits, and not as a tax shelter for their assets. Decreasing the fringe benefits penalty from 20% to 10% will make HSAs more enticing.
6. Qualified distributions will be allowed to reimburse healthcare benefits expenses that were made within 60 days coverage of HDHP and before the HAS account is created.
Even though hourly workers have HSA-qualified fringe benefits, they cannot claim medical costs as qualified distributions unless they have already fulfilled the legal requirements for creating their HSA. A 60-day window is given to hourly workers for this scenario.
ARCHER JORDAN Helps You Be in the Know
Employers giving hourly workers healthcare benefits should always be updated of the changes made or are being made by the current legislation. This will ensure that not only do companies remain compliant with the law, but that the hourly workers likewise get the employee benefits that they are entitled to.
Need help managing employee benefits? Let us do the leg work for you! ARCHER JORDAN is a reliable third-party fringe benefits administrator. Contact us and let’s discuss how we can help you.