The Rapid Increase of Healthcare Premiums

There’s no question that healthcare premiums have gone up in recent decades. In particular, health insurance premiums have seen a sharp uptick in the last 10 years compared to the rate of increase observed at any time in recent history.

According to some healthcare surveys, while rate increases hovered around 2% in 2020, experts predict that rates could increase as much as 5% by the end of 2022. This represents a big shift in expenses for both employers and workers who get their health insurance from employer-sponsored plans.

What’s Behind the Rise in Premiums?

There are several factors behind the rise in premiums, not the least of which are inflation concerns and stock market volatility. Many people, including those in the health insurance industry, are rightfully concerned about the cost of goods and services going up, and this can lead to a shift in premium prices to cover ever-increasing expenses.

Additionally, healthcare regulations introduced over the past 10 years have placed insurance providers and healthcare service providers in a tight spot. They now have to offer more services to more people which may end up costing more money. In addition, the uncertainty that affects the stock market has also affected the healthcare service and insurance sectors as it remains to be seen how severe the long-term effects of changing regulations will be.

What Can Be Done?

Although employers who provide healthcare insurance benefits often have little to do with what goes on in Washington or on Wall Street, employers can take a look at their 2022 benefits planning strategy to see if things make sense. Your 2022 benefits planning strategy may have looked solid on paper going into 2022, but perhaps it isn’t working out so well as the year has gotten started.

You’re now experiencing the effects of higher premiums on your bottom line, and you may be looking for ways to curb costs. This may be a time to consult with an insurance brokerage to discuss your company’s needs and see if other plan options may work better, both now and into 2023.

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Can I Open an HSA Without My Employer?

There’s no question that medical expenses take a big chunk out of most people’s budgets these days. Even simple doctors visits can run into the hundreds of dollars, and comprehensive care for hospital stays can be much, much more. While insurance can be useful in offsetting the cost of healthcare expenses, private insurance doesn’t cover all medical expenses.

For example, over-the-counter medications are generally not considered a covered expense through private insurance. Likewise, dental care is often not included in a health insurance plan unless your provider offers an add-on dental option. To pay for these types of expenses, you may have to dig into your own pocket, but there is another way – a health savings account.

What is a Health Savings Account?

A health savings account (HSA) is a private savings account that allows you to place money into it tax-free. Unlike insurance benefits, these funds can be spent on a variety of healthcare expenses, including over-the-counter medications and dental care.

Most people access an HSA through an employer-sponsored insurance plan. In many cases, access to an HSA will be offered alongside a group health insurance policy. This allows all of your benefits to be administrated under one provider, making it easier and more convenient to keep up with everything.

Opening a Private HSA

Despite most HSA accounts being available through employers, you can opt for private health saving account administration. This can be done through investment firms as well as banks, and some people with individual health insurance plans that are not employer-sponsored may also be able to access private health saving account administration through their insurer.

These plans typically operate on the same principles of allowing you to save tax-free funds to be used for healthcare expenses. Because each account administrator is different, you might consider shopping around to find the provider that’s right for your unique needs. Additionally, you will want to check with local healthcare providers to ensure that they accept HSA funds for their products and services.

Read a similar article about HSA account providers here at this page.

Do I Need to Use a Third Party Administrator for My HSA?

Running a business of any size can be difficult, especially with how fast the digital economy moves these days. You already have a lot on your mind, and managing benefits is often just one more thing to worry about. This becomes particularly challenging when you have a large workforce that is spread out across the country or even the world. Different states and countries have different laws and regulations, and keeping up with everything can be a chore.

For some business owners, the solution to these problems is to hire an HR team to handle tasks like health savings account (HSA) management. For others, it may make more sense to go with a third party administrator (TPA) to handle HSA benefits. Which one you choose is up to you, but there are pros and cons to each approach.

Why Choose a TPA?

An HSA TPA can take a lot of the burden off of your shoulders when it comes to managing plans, accounts and benefits. Your HSA TPA acts as an advocate for your company and its employees so that you can focus on other important tasks.

A TPA can also take care of other benefit programs that you provide to employees, including mental health benefit programs and return-to-work programs. Essentially, your TPA functions as an all-in-one administration team for medical benefits.

The Benefits of Handling Your Own HSA Administration

If you choose to keep your benefits administration in-house, you’re going to have much more control over how things are managed. Of course, this means more work for you and your team, but some business owners find this trade-off worth the extra hassle.

Employees may also prefer to deal one-on-one with your company through HR to handle questions and concerns about HSA and other benefits. Working through a third party often means more phone calls, emails and other communications bouncing back and forth. In-house benefits administration cuts out a lot of the bureaucracy and provides a more efficient route for your employees to gain access to the information they need most.

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What Is a Dependent Care FSA?

It’s no secret that child care is expensive. If you’re looking for ways to stretch your budget to cover the cost of child care, a dependent care FSA can help.

What is a dependent care FSA?

A dependent care FSA is a pre-tax benefit account you can use to pay for eligible dependent care services. For example, you can use the funds to pay for preschool, daycare, summer camp, and before or after school programs. You can even use the funds in a dependent care FSA to pay for adult daycare in eligible situations.

To use a dependent care FSA for your child, he or she must be under the age of 13. To use the funds for adult dependent care services, the adult must be a physical or relative that lives in your home and is physically or mentally incapable of caring for themselves.

Benefits of a dependent care FSA

The primary benefit of a dependent care FSA is that any money you set aside in the account is tax-free. That means you reduce the amount of your income that is subject to taxes by contributing pre-tax dollars to your account. Additionally, according to the The Federal Flexible Spending Account Program (FSAFEDS), you can save an average of 30 percent on dependent care services like daycare or after school programs.

One of the main concerns people have about a dependent care FSA is the burden of submitting required documentation and getting reimbursed for the dependent services. Although you have to cover the cost of dependent care services upfront, with a dependent care FSA, it’s easy to get reimbursed for those expenses. You can easily submit and view the status of claims online, look up eligible expenses, and check your account balances. You can even have the money directly deposited into your checking account for fast and hassle-free repayment.

Dependent care FSA contribution limits

Although this type of benefit account may sound like it’s a perfect solution for you, you should also note that some dependent care FSA contribution limits apply. A dependent care FSA lets you set aside up to $5,000 per household to pay child care expenses for kids under age 13 while you and your spouse work or look for work. If you are confident that your child care expenses will meet or exceed dependent care FSA contribution limits, the FSA might be an ideal option for you and your family.

Read a similar article about how to maximize your HSA here at this page.

Long-Term Care and Health Savings Accounts

Planning for long-term care isn’t something that most people like to think about, but failing to plan for the potential need for long-term care can lead to some difficult consequences. The fact is that, as life expectancy continues to grow in the United States, more and more people are going to need long-term care.

This type of care may be provided in a nursing home, a traditional hospital or at home, and it may last months, years or even longer. Even if you’re able to pay for initial fees, are you prepared to continue paying for care that may last for years or decades?

Does Insurance Cover Long-Term Care?

Private insurance may or may not cover long-term care depending on your policy and provider. Some insurance providers offer long-term care as an add-on benefit, but most do not provide this coverage as a core offering of most plans.

You may also think that Medicare provides coverage for long-term care since the program is designed for seniors, but Medicare does not have a long-term care benefit either. Original Medicare does provide hospital care under Medicare Part A, but this is limited to 90 days per benefit period unless you have lifetime reserve days to utilize.

Using a Health Savings Account

Because private insurance and programs like Medicare are limited in their approach to long-term care, you might consider turning to a health savings account (HSA) to pay for this type of care. Perhaps you’ve already looked into the best HSA for investing to grow your wealth, but you might want to also take a look at what long-term care facilities accept HSA payments for care in your area.

After all, the best HSA for investing isn’t necessarily the best HSA for handling things like long-term care needs. You’re encouraged to examine your existing plan now to ensure your contributions are working for you and not against you. While many long-term care facilities accept HSA payments, you will also want to make sure that utilizing an HSA for this type of care is in line with financial and healthcare regulations in your state.

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Who Can You Cover With Your HSA?

Saving for the future is easier when you take advantage of the benefits that a health savings account provides. Your tax-free investments earn interest the longer they stay in the account, and you can use the money without having to pay taxes on it as long as you spend it on IRS-approved health care items and services. This HSA account FAQ can help you determine who is covered when you need to pay a health expense.

Does Our Tax Status Impact My Spouse?

Your spouse is covered under your HSA even if you file your taxes separately. You’ll also find it helpful to know that you can use your HSA funds on your spouse if they have a separate health account. Keep in mind, however, that you and your spouse have a shared contribution limit even if you have individual HSA accounts.

Can I Use HSA Funds for My Senior Parents?

If your parents lived with you during the year and you provide for the majority of their needs, then you can also use your HSA funds to help with the cost of their health care. In this instance, your senior parents fall under the guideline of being a qualified dependent. This can also apply to other people in your home such as an aging grandparent.

When Are My Children Covered?

Changes in a person’s family dynamics frequently lead to one of the most popular HSA account FAQ posts. Adult children who have moved out of your house may still be considered a qualifying dependent if they are covered under your health insurance. You can also claim your children even if they are claimed on your ex-spouse’s tax return. Step-children also fall under the category of being a qualified dependent.

Many people are unaware that they can use their HSA funds for people who are not their direct children or dependent spouse. Knowing when and how you can use your funds helps you to rely on them when you face health care expenses while being able to take advantage of those important tax-saving benefits.

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