Employer Insurance 101 – The Basics

Employer Insurance 101 – The Basics
Employer Refresher HMIAT003930

Employer 101 Overview Part 1 – The Basics
What are Employer Benefits? Small Group Insurance Under the ACA Part 2 – Health Plans and Underwriting Networks Underwriting Criteria Plan Funding Part 3 – Additional Products Ancillary Products Benefit Accounts

Agenda The purpose of this module is to explain basic employer insurance concepts You’ll learn Why employers offer benefits Who qualifies for group insurance What differences exist between large and small employers Small group plan requirements Key legislation impacting employers

The Basics Part 1

Why Do Employers Offer Benefits?
Employers provide benefit packages for two key reasons Attract new talent to their business Retain existing employees Employers may also offer benefits because They feel it’s the right thing to do So they can personally gain access to group insurance for their family Reduce absenteeism Benefit packages play a key role in both attracting and retaining employees Some employers offer benefits out of a sense of duty to their employees while others offer them in order to access the benefits for themselves and their family. Employees who have coverage typically miss work less frequently than those who do not.

What makes up a benefit package?
Health insurance is typically the key offering of an employer’s benefit package Common additional benefits include a variety of products Dental insurance Vision insurance Life insurance Short and long term disability insurance Critical illness insurance Accident insurance Gap insurance Many employers also offer retirement benefits 401K Pension Obviously, health insurance is the bedrock of employer benefit offerings, but just like the individual market, there are many additional products that employers and employees may find valuable (go through the list).

Additional Benefits Depending upon the employer, additional benefits may be provided As an employer paid benefit Usually offered as either being 100% employer-funded or cost- shared with the employee As a voluntary benefit Sponsored by the employer and paid by the employee As an individual supplemental or worksite benefit These are typically underwritten at the group level (e.g. industry, participation) or individual level (e.g. Surebridge) The additional benefits can be offered in several ways: Employer paid specialty benefits are offered to employees as either fully funded by the employer or the employer offers them on a cost share basis with the employee Voluntary benefits are those “sponsored” or offered by the employer but paid for by the employee Individual and worksite benefits are usually individually underwritten and may have no association with the employer

Introduction to Employer Small Group Health Insurance

What is Group Health Insurance?
Many Americans have group health insurance coverage through their employer or their spouse’s employer Group health insurance is purchased by an employer and is offered to eligible employees as a key part of a benefits package Eligible employees meet the state’s mandated definition of a full-time employee and meet the employer’s established waiting period Coverage is required to be offered for employees’ dependents (children up to age 26). Coverage is not required to be offered for employees’ spouses, but most employers choose to do so State and federal law differentiate between small- and large- group plans In most states, small-group plans are groups of 50 or fewer people Group health insurance is offered to eligible employees of the company. Eligibility is determined at the state level based on the employee being full time and having met the established waiting period. Coverage may be offered to employees’ families but this is not required. State and federal law distinguishes between small and large group plans. Most states recognize small group as being 50 or fewer people.

What is Employer Health Insurance?
Employers with fewer than 50 full-time employees (FTE) and equivalents are considered small employers by the ACA and are not required to offer health insurance to employees Large employers are required to offer health insurance and face a tax penalty if they don’t Small employers have between 2 – 50* employees on 50% - 80% of the work days during the preceding year An eligible employee works 30+* hours per week Excludes part time or seasonal employees who work only part of the year Maximum waiting period for a new employee to qualify for coverage is 90 days Employers who have less than 50 FTE’s and equivalents are Small employers under ACA guidelines and not required to offer health insurance Large employers are required to offer and face a penalty if the don’t Review the qualifications in the second bullet point. If your state varies from these numbers point that out to agents. Small Business Majority – HealthCoverageGuide.org *Varies by state

Group Health Premiums Typically, employers cover at least 50% of the premium for covered employees – a requirement intended to encourage more employees to join the plan Helps prevent “adverse selection” – where only those anticipating claims are motivated to sign up, creating a much higher risk-group for the insurer The ACA sets guidelines insurance carriers must follow when establishing new and renewal premium rates Employers may contribute to premiums for dependents and spouses, but are not required to do so Employers must offer the same benefits and subsidies to all eligible employees Employer contribution rates may be adjusted formulaically based on an employee’s tobacco use and the number of family members receiving benefits Employers are required to cover at least 50% of premiums for health insurance offerings Not required to contribute to dependent premiums An employer cannot offer different benefits or cost sharing to different employees. Everyone has access to the same benefits. HealthCare.gov – The Employer Shared Responsibility Payment

Small Group Plan Requirements
Federal law (and all states) requires all small group plans be sold on a guaranteed issue basis. Small groups cannot be turned down by an insurer based on their health status Small Group plans must also Cover the 10 essential health benefits Meet actuarial value levels (Metal Plans) defined by the ACA Participate in the risk adjustment program and be a part of a single risk pool for setting premiums (not based on existing conditions) Limit rate calculations to age, geographic location, family composition and tobacco use Small group plans are GI and carriers cannot decline a group based on health status Small group plans are also required to meet the 4 points listed HealthCare.gov Small Business Majority – Group Coverage Basics

Grandfathered Plans Plans in existence as of March 23, 2010 and remain in force are exempt from these ACA requirements Inclusion of all Essential Health Benefits Cover all preventive services with $0 cost sharing Plans must still cover certain preventive services without cost sharing Annual limit on out-of-pocket expenses Prohibition of premium rating based on health status Coverage for emergency care out-of-network Rate reviews for premium increases of 10% or more Grandfathered status for plans is set to expire for most states in Q4 of 2017, creating a huge market opportunity this year

Enrollment Period An employee can enroll in an Employer Group Plan in the following situations When the plan is newly offered When an employee is newly hired During the plan’s Annual Open Enrollment Period Should the employee have a Special Enrollment

Special Enrollment Triggers
Loss of essential health coverage: Employee or a dependent loses health coverage that meets minimum standards Change of family structure: Gaining, adding or becoming a dependent due to marriage, death in the family, or birth/adoption Change in citizenship status Experience government error: Losing, changing, or enrolling in coverage due to an error by the Exchange or the Dept of HHS Change in subsidy eligibility due to change in income Move to a new coverage area Employer-sponsored coverage reducing benefits such that it no longer provides minimum value, or becomes unaffordable Employee pays more than 9.69% of income for just their portion of coverage “Qualifying Events that can get you coverage”, healthinsurance.org

COBRA Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
Establishes requirements for “continuation coverage” - a temporary extension of health coverage when the plan would normally end Applies to employers with ≥ 20 employees in the prior year Employers are required to notify employees who are eligible for COBRA continuation Most states have continuation coverage laws for companies with <20 employees; details vary Employee is typically responsible for the entire premium Insurance through the individual marketplace may be a better option than COBRA

ERISA Employee Retirement Income Security Act of 1974
Regulates the operation of employee benefit plans, including group health plans that are insured or self-insured Establishes fiduciary responsibilities a Plan Sponsor, such as the employer, must meet Establishes standards that employers must meet for providing information to employees (plan participants) and the government Example 1: Providing timely notice of plan changes to employees Example 2: Filing the plan’s Summary of Annual Report (Form 5500) Plans with <100 lives do NOT need to file Form 5500 if they are fully insured, unfunded (benefits are paid solely and directly out of the general assets of the employer) or a combination thereof Agents should always refer their clients to their tax or legal professional for advice regarding ERISA compliance

Small Business Health Options Program (SHOP)
SHOP establishes marketplaces for small employers to obtain health and dental coverage for their employees. We are not contracting with SHOP at this time SHOP has not been widely adopted and suffers structural issues like the individual exchanges SHOP exchanges often do not provide agent-specific commission data allowing HealthMarkets to pay agents HealthMarkets agents will not be compensated for plans sold through SHOP

Group vs. Individual Scenario Small Group Health Individual Health
Employees can keep the plan when they switch jobs No COBRA/state continuation Yes Employees choose the network and doctors Some carriers allow choices Yes Plan/Carrier selection Premium tax credits may be available to employees No Yes Coverage for pre-existing medical conditions Yes Premium is pre-tax Yes No Coverage for essential health benefits Yes How is the health plan paid for? Employer purchases plan. Employees contribute a percentage via payroll reduction Employees purchase and pay for their own plan ZaneBenefits – “Small Business 101 – Group Health Insurance vs. Individual Health Insurance”

Test Your Knowledge Please return to the course in CourseMill (EMPREFRPreIns101SS) to answer a few questions.

Health Plans & Underwriting
Part 2

Agenda In this module we will focus on the following topics based on the Market Analysis document supplied by Excelsior Types of plans offered Networks Plan underwriting considerations and funding options The Market Analysis is a summary of carrier and plan options in your area This presentation uses the Dallas area analysis for illustration purposes

(% of small employers)*
Health Plan Types Plan Definition Offered by (% of small employers)* HMO Health Maintenance Organization 21% PPO Preferred Provider Organization 51% POS Point of Service 23% HDHP High Deductible Health Plan 32% EPO Exclusive Provider Organization <1% POS’s are a type of PPO/HMO hybrid Like an PPO, insureds may go outside of the network for health care services Like an HMO, insureds must designate an in-network PCP EPO’s are also a type of PPO/HMO hybrid Like a PPO, insureds have access to a broad network of providers they may see without a referral Like an HMO, there is no coverage if the insured seeks treatment outside of the network * Some companies offer >1 type of plan. Data source:

Networks

Network Considerations
Employers can choose between a broader network of providers or a more narrow or “skinny” network Often, networks for small group plans are more extensive than those for individual plans Size of provider networks can directly impact the premium cost of a health plan Broader networks typically result in higher premiums Some carriers may offer a choice of networks based on geography National State-wide or regional Metro Area

Sample Market Analysis – DFW
Market Analyses are available in the Employer section of the Resource Center

Plan Underwriting and Funding

Underwriting Guidelines for Small Groups
In general there are 9 categories of information that determine how carriers underwrite small groups Large Group calculation Composite/age rate Participation Employer Situs 1099 Employees Husband/Wife eligible One life group Mid-year plan change Smoker rates *The following slides were developed from sales experience and collaborations with various carriers contracted with Excelsior Insurance Brokerage

Market Analysis

Large Group Calculation
Today, HealthMarkets only sells small group plans The rules around calculating an applicable large employer for the employer mandate are not the same as the rules for calculating which groups are eligible for large vs. small group plans There are 3 methods for calculating large vs. small group Full-Time Equivalent (FTE) Average Total Number of Employees (ATNE) Eligibles Calculation method is determined by each state Calculation of small group plans include part-time employees; contractors are not included How PT employees are counted varies by calculation method

Large Group Calculation - Eligibles
Eligibles is the simplest calculation method Eligibles includes all eligible employees The exact criteria are determined by the states Generally, eligible employees are those working 30+ hours per week, 48 weeks per year 2016 State Methodology Map from United Healthcare * Small group upper limit = 100

Large Group Calculation – FTE Method
Full-Time Equivalent calculation includes Full-time employees – those who worked 30+* hours per week in any month Full-time equivalents – calculated by dividing the hours of all part- time employees by 30 Seasonal employees (those working <120 days per year) are NOT included #1 32 hr 1 FTE 2 FTE’s #2 10 hr #3 10 hr #4 10 hr 30 1 FTE *varies by state

Large Group Calculation – ATNE Method
Average Total Number of Employees (ATNE) Counts any individual for whom a company issues a W-2, including full-time, part-time and seasonal employees Takes the average number of employees throughout a 12 month period The table below shows an example of an ATNE calculation These calculations are complex – talk to your sales rep if you think a customer might qualify as a large employer

Modified Community Rating
Small group insurance plans use a rating method referred to as modified community rating to set premium rates All small groups in the same geography share the same pricing for a given plan This method allows health plans to set rates based on factors such as age, geography or tobacco status Example: With modified community rating with a variation for age, the insurer would have to use the same rate when calculating premiums for a 27-year old male employee who suffers from juvenile diabetes as it would for healthy employee of the same age.

Composite Rates Composite rates are only final for the company when the specific employee elections are completed Example 1: census = final enrollment: composite rates during quote process are accurate Example 2: census <> final enrollment: composite rates will have to be re-calculated All quotes truly are approximations of the final price

Composite/Age Rate Two methods are used to determine premiums for group health insurance when using the modified community rating Age rating assigns premium rates for each individual on the plan based on their actual age Composite rating assigns rates based on the overall company profile Rates are divided into member levels Employee-Only, Employee + Spouse, Employee + Child, and Family Composite rates are calculated by adding up all the member- level rates for the enrolling employees to create an average for each level

Fully Insured vs. Self-Insured
An employer offering health insurance as an employee benefit can fund the coverage in one of two ways Fully Insured Employer contracts an insurance company to cover the employees and possibly dependents Self-insured AKA “Alternative Funding” and “Level Funding” The employer assumes the direct risk, up to a threshold, for payment of claims Employers can mitigate this risk by purchasing stop loss insurance which limits the amount of exposure on both a specific claim and aggregate claims basis

Self-Insured Plans Level funded self-insured plans are designed to look and feel like fully-insured plans The employee has the same experience as under a fully- insured plan Self-insured plans avoid ACA rules and are underwritten As a result, they can have lower costs for healthy groups Employers may receive a return of some of their costs if their claims are is lower than anticipated We plan to offer some self-insured plans later in 2017

Permitted Rejections by Carriers
Carriers can reject small groups based on: Employer contribution: small employers may be required to contribute a minimum percentage (typically 50%) of the premium payment on behalf of employees There are no requirements for contributions to dependents’ premiums Participation: a minimum percentage of employees may be required to participate in the health plan – typically 50% to 75% This is intended to encourage more employees to join the plan Helps prevent “adverse selection” – where only those anticipating claims sign up, creating a much higher risk-group for the insurer Employees with a valid waiver are excluded from the calculation Can we add the open enrollment exceptions here? HealthCare.gov Small Business Majority – Group Coverage Basics

Open Enrollment for New Groups
Participation and contribution requirements are waived for groups joining a new carrier This annual enrollment period runs from 11/15 – 12/15 Upon renewal, the group would be subject to participation and contribution requirements

Participation Waivers
A valid waiver exists when other group-sponsored coverage is provided to the employee Examples include: Coverage through a spouse’s group coverage Medicare Medi-Cal TRICARE – Military The employee must provide proof of this coverage Individual insurance coverage counts as a valid waiver in some states Not wanting coverage or claiming affordability issues without evidence are not valid reasons for waivers Can we add the open enrollment exceptions here? HealthCare.gov Small Business Majority – Group Coverage Basics

Employer Situs Situs is defined as the state where the policy must be written and whose mandates must be applied Situs can be determined based on: Majority - the state where the majority of employees works Headquartered - the state the business recognizes as its’ primary location (primarily used with the Blues) State Filing - the state where the business was incorporated

1099 Contractors 1099 contractors are typically not eligible to receive access to a group health insurance plan However, some states do mandate offering coverage Additionally, some carriers in states that do not mandate coverage may allow 1099 contractors to be included

Very Small Groups Husband/Wife Eligible One Life Group
A business operated by spouses (“Mom and Pop” business) One Life Group A single individual owns and operates a business (aka Sole Proprietorship or Business Group of One) Can also be an owner not participating but providing coverage to a single employee These businesses are usually ineligible to access group health plans Plus, those few carriers who will underwrite them often do not pay commissions for these cases However, some states do mandate offering coverage

Other Plan Considerations
Mid-Year Plan Change Some carriers allow a group to change from one plan to another under that same carrier during the plan year This not state mandated Smoker Rates The ACA allows separate rating categories for smoking vs. non-smoking employees When a carrier quotes Smoker Rates, these are actually tobacco rates They include any form of tobacco use

Sample Underwriting Analysis – DFW

Additional Products Part 3

Agenda While health insurance is the foundation of an employer’s benefit offering, additional products and services are usually added in order to create a wall of protection In this session you will learn about additional offerings available to employers Ancillary products Benefit accounts

Ancillary Products

What are Ancillary benefits
Many employers offer ancillary products in order to enrich their benefit packages Common ancillary benefits include a variety of products Dental insurance Vision insurance Life insurance Critical illness / Cancer insurance Accident insurance Gap insurance Short and long term disability insurance Obviously, health insurance is the bedrock of employer benefit offerings, but just like the individual market, there are many additional products that employers and employees may find valuable (go through the list).

Who pays for Ancillary? Depending upon the employer, ancillary product may be offered in three ways As an employer paid ancillary benefit Usually offered as either being 100% employer-funded or cost-shared with the employee As a voluntary ancillary benefit Sponsored by the employer and paid by the employee As an individual supplemental or worksite benefit These are individually underwritten most of the time

Ancillary Products An employer may choose to sponsor specialty products as part of a benefits package Employers may contribute to the premiums of these products but are not required to do so Availability of specialty product types varies widely based on region and carrier Product offerings can also vary based on the size of the group A standard product portfolio often includes a combination of dental, vision, life, STDI, LTDI and Trans Gap

Additional Product Offerings
Additional product offerings include Critical Illness Accident Cancer Hospital Indemnity We are not currently marketing these products for employers except in under 5 life cases in connection with the TransConnect Gap product

Group Dental & Vision Insurance
Group Dental insurance is very similar to Individual Dental insurance Covered expenses include preventive and restorative services, which are tiered The one crucial difference is waiting periods Most group dental plans will not include waiting periods for preventative services (cleanings, routing office visits) Restorative care (filings, crowns) usually do have waiting periods When moving to a new group dental plan with waiting periods, carriers may credit time on the old plan to the waiting periods Group Vision insurance works identically to Individual Vision insurance A dental insurance policy will cover regular checkups and cleanings twice a year, although there may or may not be an out-of-pocket copay required for each appointment. Most dental insurance plans will also cover the majority or all of the expenses related to cavity fillings. In addition to check-ups and fillings, dental insurance should cover annual X-rays, crowns, root canals, and other necessary repair work. However, it is possible that policy holders will be responsible for paying a deductible before coverage will kick in for these types of procedures.

Value of Dental to Employees
Glassdoor Q Employment Confidence Survey

Group Life Insurance Coverage purchased through a group carrier on a "wholesale" basis Coverage costs each employee much less than if they had to purchase an individual policy Group Life insurance adds very little cost to the overall cost of an employer’s benefits offering Voluntary group life plans are often portable, but will be rerated should an employee leave the group and take the policy with them, making premiums more expensive Another reason why you should discuss individual life insurance even if they are getting a group policy Group carriers typically offer term life, however, some permanent group life policies may be available depending upon carrier and geography Those receiving coverage may not have to pay anything "out of pocket" for policy benefits or they may elect to have their portion of the premium payment deducted from their paycheck. The employer purchasing the policy for its workers or members retains the master contract.

Group Life Insurance As the policy owner, the employer keeps the actual insurance policy (master contract) Insureds typically receive a certificate of insurance or other evidence of insurance as proof of coverage but it is not the actual policy Group life insurance allows you to choose your beneficiary

Disability Insurance Product Types
Benefits can vary, but generally cannot exceed 60% of the individual’s gross income Two types of disability insurance Short-Term Disability (STDI) Depending on the plan, STDI generally pays a percentage of income for 9 weeks - 1 year once elimination period* is met Long-Term Disability (LTDI) Depending on the plan, LTDI pays a percentage of income for a specific number of years (2 or 5 years) or until reaching a specific age (65 or 67) once elimination period* is met *The elimination period is the period of time from the date the insured is considered totally disabled until the benefits begin to accrue

Medical Gap Insurance Medical gap plans are designed to reduce out-of-pocket expenses Lowers exposure to medical inflation Increases first-dollar coverage Improves persistency Helps cover deductibles, co-insurance and copays Gap plans allow employers to take on higher deductible health plans with lower premiums which also have lower renewal rate increases Having major medical insurance doesn’t mean paying your premium and enjoying an all-access pass to healthcare. In reality, you are responsible for coinsurance, copayments and non-covered expenses, as written in your health insurance policy regardless of whether you buy your own health insurance or get it through a parent, partner or employer. The expenses your health insurance company doesn’t reimburse you for are known as out-of-pocket costs. The amount of out-of-pocket costs you incur is dependent on several factors including your healthcare needs and your health insurance benefits.

Work with your GA Sales Representative
Sales reps will support all products and carriers you are currently appointed to sell GAs like Excelsior are experts in the A-to-Z of all small group insurance products Sales reps goal is to present a “holistic” approach to group benefit solutions and help you create a well- rounded benefits package Reps will assist in evaluating carrier options and also present cross selling opportunities with other employer-paid group products Your sales rep will also receive the quote and can help you navigate what to propose It’s usually best to present no more than 3 options just like in the individual world

TransConnect Gap Product Overview
Covers (see benefit summary for full details) Does Not Cover (see benefit summary for full details) Inpatient hospitalization (including doctors) (100% of policy max) Drug / Alcohol/ Mental Therapy Outpatient surgery / diagnostic imaging (50% of policy max) Prescription drugs, including chemotherapy Accident related ER/urgent care visits Non-accident ER visits Ambulance: $350 Doctors office visits / standard xrays Office surgery: $100 Outpatient therapy, including radiation / labs / rehab / The Gap plan that we offer is a plan from Transamerica called TransConnect We considered using the Surebridge gap product for this purpose, but it’s tough to recommend this product to a group because of underwriting and we know that our products can’t be employer paid The TransConnect product can be written to cover up to $10,000 / member of expenses, so it can be paired with a high deductible plan and cover a lot the difference in costs so employees are financially insulated in many ways from the transition to a higher deductible major medical plan And, the product provides for direct provider payment to make it easy to use the benefit Note that the gap product does not cover basic medical services, drugs or outpatient therapy, so not all employees will be affected equally Plans are guaranteed issue with no pre-existing/waiting conditions, min participation requirements TransConnect ID card for direct provider payment Not an indemnity benefit…reimburses actual costs

TransConnect Examples (for $5K Policy)
Covered Examples Maternity (inpatient) Heart Attack (inpatient) Surgery (outpatient) Dislocated knee (ER) MRI (diagnostic) Total Cost $8,000 $25,000 $11,000 $4,000 $800 Employee actual costs (net of major medical) $6,000 - TransConnect Benefit $5,000 $2,500 Employee net costs $0 $1,000 $3,500 $1,500 Excluded Examples Radiation / Chemo ER visit for kidney stones Drug/alcohol or Mental Sleep Apnea study X-ray Total Cost $10,000 $1,200 $1,800 $650 $100 Employee actual costs (net of major medical) $2,000 - TransConnect Benefit $0 Employee net costs Here are some examples of what’s included and excluded in coverage Note that unlike our Surebridge products, these are not event triggered indemnity products The employee is reimbursed for their costs up to the maximum policy amounts, but not more than their actual costs

Benefit Accounts

Benefit Accounts - Overview
Various benefit accounts exist that provide employees with reimbursement for qualified medical expenses and/or premiums through pre-tax dollars The appropriate benefit account varies based on a variety of factors, such as the type of benefit package structured by the employer and employer budget Employers should consult their tax and/or legal professional for input when structuring the type of benefit account for employee health care benefits

Section 125 (Cafeteria) Plan
Section 125 is part of the IRS code allowing employees to convert taxable cash benefits (salary) into non-taxable benefits This gives employees the choice to pay for qualified benefit expenses before taxes are deducted from paychecks Section 125 (Cafeteria) Plan grants employers the ability to set up a variety of funding options Premium Only Plan (POP) Flexible Spending Account (FSA) Limited Purpose FSA Dependent Care Assistance Plan (DCAP)

Section 125 (Cafeteria) Plan - POP
A Premium Only Plan (POP) is the foundation of Section 125 and allows certain employee contributions to group insurance premiums to be paid on a pre-tax basis A POP is the funding arrangement many companies use for their group insurance plans Employers save the FICA tax match on any premium that is withheld pre-tax from employee paychecks Saves employees Federal, State and FICA taxes

Section 125 (Cafeteria) Plan - FSA
FSA’s are accounts that accept tax-free employee contributions to pay for certain out-of-pocket health care expenses Employers may contribute funds to FSA’s but are not required to Generally, funds in an FSA must be exhausted by the end of the plan year or the money is lost Some FSA’s provide a “grace period” up to 2 ½ months or allow for a carry over of up to $500 FSA funds can typically be used for deductibles, coinsurance, copays, Rx, DME and dental expenses Funds may not be used to pay insurance premiums

Section 125 (Cafeteria) Plan – Limited Purpose FSA
This type of FSA is for employees enrolled in a high deductible health plan and a Health Savings Account (HSA) Funds in this type of FSA can only be used for qualified dental and vision expenses This preserves HSA funds for other medical expenses The IRS has an annual funding limit for these plans, but employers may set a limit lower than the allowable maximum 2017 annual limit is $2,550

Section 125 (Cafeteria) Plan - DCAP
Dependent Care Assistance Plans (DCAP) are a type of FSA allowing employees to set aside money on a pre-tax basis for qualifying dependent care Qualifying care includes daycare, preschool, before and after-school care and elder care Like a medical FSA, funds must be used before the end of the plan year Some plan options may provide a grace period

Health Savings Account (HSA)
HSA’s allow employees enrolled in a high deductible health plan to set aside money on a pre-tax basis to pay for qualified medical expenses Like an FSA, employees can use HSA funds for deductibles, coinsurance, copays, Rx, DME and dental expenses Unlike an FSA, HSA funds can roll over from one year to the next if not spent Employees may also take the HSA with them if they change jobs or leave the workforce These accounts may also earn interest

Health Reimbursement Account (HRA)
An HRA is an employer-funded plan established to reimburse employees for qualified medical expenses with tax-free money IRS defines qualified medical expenses Expenses must be verified for reimbursement consideration An HRA is the only kind of benefit account that can be used toward premiums for individual health insurance plans Employees cannot contribute funds to the account A Qualified Small Employer Health Reimbursement Arrangement (QSE HRA) can only be offered by employers with <50 FTEs (ACA definition) who don’t offer group health insurance A QSE HRA has a maximum reimbursement of $4,950 for individuals and $10,000 for families

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Employer Insurance 101 – The Basics

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