Leading Thoughts on Benefits

HSA: An Opportunity for Both Employers & Employees to Save

Employers across the country are starting to embrace high deductible health insurance plans. These plans offer a long-awaited opportunity for companies to rein in ever-rising healthcare costs while encouraging employees to be more accountable for their own well-being. In 2012, over 13.5 million people were covered by high deductible health insurance plans, 2 million more than the previous year.

One exciting component of high deductible plans is the Health Savings Account (HSA) benefit. HSAs allow employees to put away pre-tax earnings that can be applied to qualified healthcare expenses. The beauty of these plans is that unlike other benefits, with HSAs the money stays with the individual forever, even if he or she changes jobs. In addition, funds roll over from year to year and may be invested.  And, so long as the funds are used for qualified medical expenses, an individual will not be taxed on withdrawals from the account.

For both employers and employees, HSA-Eligible High Deductible Healthcare plans offer a great opportunity to save. Currently, individuals can put away $3,250 and families $6,450 per year in an HSA. Depending on their size, companies can save anywhere from thousands to millions of dollars a year on premiums by switching from a co-pay-based plan to a high-deductible plan.

But while there are many benefits to offering an HSA benefit, there are also many complexities. For example, the coordination rules between HSAs, Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs) are intricate and somewhat confusing.

A few basic distinctions:

• FSA accounts are established by the employer and funded by the employee. Any unused funds revert to the employer at year’s end. HRA accounts are established and funded by the employer. HSA accounts can be opened and funded by the employer, employee, or another third party. All funds stay with the employee.
• Employees cannot contribute to an HSA and be enrolled in an employer-sponsored HRA or Health FSA unless the HRA or Health FSA is a Limited Purpose (covering only dental and vision expenses).
• In the case of married couples, if one spouse contributes to an HSA, the other spouse cannot be in a Health FSA.

For more information on the benefits and limitations of high deductible health plans, please speak to a Sentinel representative, or visit https://www.sentinelgroup.com/main/Members/Member-Services/FAQ--Health-Savings-Accounts-(HSAs).aspx to learn more.

Also, don't miss out on our upcoming webinar Prepare for a Healthy Future: Understanding Health Savings Accounts (HSAs) on June 13, 2013 at 2:00 p.m. 

Employers' Responses to the Affordable Care Act

The Affordable Care Act continues to significantly affect employers across the nation. In fact, many employers plan to make some organizational changes—from offering wellness-based care to hiring fewer total employees—as a result of health care reform. As provisions continue to take effect, how are employers reacting to and coping with the changes? For more than three-quarters of respondents to the 2013 Health Care Reform Survey (approximately 3300 people), health care reform has increased, or is expected to increase, their organization’s health benefit costs.

Check our the complete survey for more on the following:

• Demographics
• Broker-provided Services
• Health Plans
• Pay or Play Decision
• Election Results
• Compliance
• Health Insurance Exchanges
• Workplace Wellness
• Cadillac Plans
• Health Care Reform Administration
• Overall Changes

Top 5 Best Practices for Investment Committee Success

Does your investment committee follow clear guidelines for managing your company’s 401k plan? If not, then the risk of liability is higher than it should be.

Investment committees serve an important role in overseeing defined contribution plans.

While they do not (and should not) make day-to-day investment decisions, they do bear fiduciary responsibility to ensure that decisions are made in the best interest of plan participants. Their role includes: establishing the 401k programs, hiring investment professionals, overseeing the investments, and insuring that the plan’s fees are reasonable.

As retirement plan fiduciaries, investment committees must be careful, or they could face significant trouble. Regulators are turning up the heat on fiduciaries by enacting a number of oversight requirements, while plan participants have been filing lawsuits of late. In fact, last spring, the U.S. District Court for the Western District of Missouri awarded plaintiffs more than $35 million for breaches of fiduciary duty related to 401k plan expenses.

So, what can investment committees do to protect plan participants as well as their members? Here are five practices that every investment committee should follow:

• Create an investment policy statement that clearly outlines the goals for your retirement plan’s investments and sets guidelines for diversification, acceptable and unacceptable asset classes, and for choosing specific investment choices.
• Avoid conflicts of interest by hiring an independent, fee-only investment advisor to assist your investment committee with fulfilling its fiduciary responsibilities.  At a minimum, any conflicts of interest must be identified, disclosed and monitored.
• Document all decisions made at each Investment Committee meeting. There may come a time when your committee will be asked to demonstrate how and why a decision was made.  Most regulators will focus on your process more than the result of your decisions.  To assure good documentation,   the committee should keep minutes to demonstrate how it arrived at decisions.
• Control expenses and account for them. Investment committees must have a clear understanding of the costs associated with the investments they select. This requires knowledge of the types of expenses that different share classes command, among other variables. It also requires committees to have the ability to benchmark their costs against those of other comparable plans.  
• Monitor the activities of the program by meeting regularly. Ideally, investment committees should meet more than once a year in order to keep a close eye on the performance of the plans they are overseeing and to measure performance against indices and peer models.

By following clear guidelines, investment committees are likely to achieve better outcomes for plan participants, while, at the very least, protecting themselves should things go awry.

Click here for the complete article.

WEB-014-04232013

Confused at Checkout? What the PIN option means for Benny card users

A new regulation that gives users of Benny pre-paid benefits cards the option of assigning a personal identification number (PIN) to their card is generating some confusion.

To be clear, Benny Card subscribers do not need to use a PIN number. However, consumers need to be aware of the slight modification in the checkout procedure.

If you wish to use a PIN number with your card, then you will have to select “debit” as a payment method at the checkout counter. Upon selecting the debit option, you will be asked to enter your PIN number prior to signing.

If you do not wish to use a PIN number or you do not want to enter your PIN number just select “credit” as the payment option. You will then be asked to sign for your purchase.

Whether you choose debit or credit, the purchase amount will be deducted from your Flexible Spending Account with no additional charges of interest or fees.

Families with more than one Benny Card will share the same PIN number, which will be a number of your choosing.

The PIN option is the result of the Dodd-Frank Wall-Street Reform and Consumer Protection Act that requires benefits programs to offer consumers the ability to pay using a PIN at the point of sale, in addition to the current signature process.

How Does Your Health Plan Measure Up?

Did you know that the average office visit copay in 2012 was $27.00?

Check out the 2012 Health Plans Benchmarking Report to see how your plan measures up! This comprehensive report consists of data gathered from nearly 50,000 employers and more than 73,000 health plans during the 2012 calendar year and offers benchmarking information on:

• Individual Out-of-Pocket Maximums
• Individual Deductibles
• Emergency Room Copays
• Coinsurance
• Office Visit Copays
• Prescription Drug Deductibles

To help you compare your offerings against similar organizations and plans, the benchmarking report has broken down the data by region, group size, industry and plan type for each item.

To learn more, download the complete 2012 Health Plans Benchmark Summary here.