Health Savings Accounts Section 223

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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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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.

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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.

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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?

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HSAs Reduce Insurance Premiums

• Together, a HIGH deductible insurance plan
  (1000single/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!

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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.

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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

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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.

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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

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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?

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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)?

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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
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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?

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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?

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Sample HSA Daily Valuation Screen
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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).
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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 [phone] or
• hrconsultinggroup_at_msn.com, or www.hrconsultinggro
  up.com for a listing of qualified vendors and
  software firms.