Archive for the ‘HSA Bank’ Category
Using A Section 125 HRA Plan to Fund Individual Medical Purchases in Lieu of a Group Plan
Has group insurance seen its best days? I had to ask myself that today. In 2016 medical underwriting of individual policies will no longer be allowed. There will no longer be uninsurables that get treated differently under group plans than they do under individual policies. Why would an employer continue to stay on the back of a bronco that has been trying to throw it off for 20 years?
If the employer thinks it has a financial incentive to keep the group plan in place, that is likely not true. Changes in the Internal Revenue Code effective in 2009 makes purchase of individual policies with pre-tax HRA salary reduction amounts, as well as pre-tax employer HRA contribution amounts, permissible. The HRA contributions become “defined” in that the employer can fix the amount, if any, per class of employee, often at a level less that group plan levels. How the employee uses it is entirely employee driven. The employer steps out of the equation for everything except the regulatory framework of a Section 125 HRA approach. Employees make their own product purchase and just file the required paperwork with the administrator.
This is an exciting new concept about which only a few really knowledgable consultants are assisting employers. Let BBCG show you how this might work for your workforce. Please click here to open a link to a preseentation from one of our strategic partners which is a nationally recognized leader in the implementation of this concept.
Please note that this concept is not carrier dependent. Employees can buy any healthplan they desire. However, for ease of transition BBCG can make available to the purchasing employees from one up to three individual plan carriers and assist with the purchase process. For very large employers considering this transition, BBCG would actually put enrollers on site to assist. Note that with 3 carriers, three basic plans, and dozens of variable alternatives within the plans the decision points can exceed 100 for an employee. Using lowest cost as the driver can often be very dangerous for some employees.
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