2018 Amounts for HSAs; Retroactive Medicare Coverage Effect on Contributions

Great article from our partner, United Benefit Advisors (UBA) by Danielle Capilla.

IRS Releases 2018 Amounts for HSAs

The IRS released Revenue Procedure 2017-37 that sets the dollar limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for 2018.

For calendar year 2018, the annual contribution limit for an individual with self-only coverage under an HDHP is $3,450, and the annual contribution limit for an individual with family coverage under an HDHP is $6,900. How much should an employer contribute to an HSA? Read our latest news release for information on modest contribution strategies that are still driving enrollment in HSA and HRA plans.

For calendar year 2018, a "high deductible health plan" is defined as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 for self-only coverage or $13,300 for family coverage.

Retroactive Medicare Coverage Effect on HSA Contributions

The Internal Revenue Service (IRS) recently released a letter regarding retroactive Medicare coverage and health savings account (HSA) contributions.

As background, Medicare Part A coverage begins the month an individual turns age 65, provided the individual files an application for Medicare Part A (or for Social Security or Railroad Retirement Board benefits) within six months of the month in which the individual turns age 65. If the individual files an application more than six months after turning age 65, Medicare Part A coverage will be retroactive for six months.

Individuals who delayed applying for Medicare and were later covered by Medicare retroactively to the month they turned 65 (or six months, if later) cannot make contributions to the HSA for the period of retroactive coverage. There are no exceptions to this rule.

However, if they contributed to an HSA during the months that were retroactively covered by Medicare and, as a result, had contributions in excess of the annual limitation, they may withdraw the excess contributions (and any net income attributable to the excess contribution) from the HSA.

They can make the withdrawal without penalty if they do so by the due date for the return (with extensions). Further, an individual generally may withdraw amounts from an HSA after reaching Medicare eligibility age without penalty. (However, the individual must include both types of withdrawals in income for federal tax purposes to the extent the amounts were previously excluded from taxable income.)

If an excess contribution is not withdrawn by the due date of the federal tax return for the taxable year, it is subject to an excise tax under the Internal Revenue Code. This tax is intended to recapture the benefits of any tax-free earning on the excess contribution.

See the original article Here.

Source:

Capilla D. (2017 June 8). 2018 amounts for HSAs; retroactive medicare coverage effect on contributions  [Web blog post]. Retrieved from address http://blog.ubabenefits.com/2018-amounts-for-hsas-retroactive-medicare-coverage-effect-on-contributions


Rising Healthcare Costs Hurting Retirement Contributions

The rising costs of healthcare are starting to have a negative impact on employees. Find out how employees are having trouble saving for their retirement thanks to the rise of healthcare costs in the interesting article by Paula Aven Gladych from Employee Benefit News.

Rising healthcare costs have had a dramatic impact on the ability of workers to save for retirement and other financial goals.

The latest Bank of America Merrill Lynch Workplace Benefits Report finds that of the workers who have experienced rising healthcare costs, more than half say they are contributing less to their financial goals as a result, including more than six in 10 who say they are saving less for retirement.

What’s more, financial stress also is playing a big role in employee physical health with nearly six in 10 employees saying it has had a negative impact on their physical well-being. This stress weighs most heavily on millennials at 68%, compared with baby boomers at 51%, according to the research.

Because of these dire statistics, more and more employees are looking to their employer to help them through financial challenges.

“We spend a lot of our waking time working and a lot of our finances are made up of the compensation and benefits our employer provides,” says Sylvie Feast, director of financial guidance services for Bank of America Merrill Lynch. “[Employer’s] healthcare and 401(k) plans are really valued by employees. I don’t think it’s surprising that they are looking to their employer that provides essential benefits to help provide access to ways to better manage their finances.”

And because employers offer healthcare and retirement benefits, it isn’t a stretch for workers to expect their employers to offer financial wellness as a benefit as well, Feast says.

“There’s no silver bullet, but a continuing evolution of trying new things to see what works and has an impact with the workforce,” Feast says. “Culture has something to do with it.”

Online tools, educational content, professional seminars in the workplace and personal consultations can be especially effective offerings, Feast says, adding that those options can help employees get more comfortable talking about their finances at work and at home with their family.

“People are pretty private about their finances,” Feast says. “I think there’s this access the employer needs to provide, but there also needs to be an arms-length distance so it is not the employer delivering it.”

Retirement savings is the area most workers want help with, according to Bank of America Merrill Lynch’s survey. More than half of baby boomers (54% ), 53% of Generation X and 43% of millennials say they need help saving for retirement, with 50% of all respondents ranking it as their No. 1 financial issue.

For millennials, good general savings habits and paying down debt were their next most important financial priorities. For Generation X, paying down debt, good general savings habits and budgeting all tied for second, and for baby boomers, planning for healthcare costs and paying down debt were their next biggest financial priorities.

Eighty-six percent of employees surveyed say they would participate in a financial education program provided by their employer, according to Bank of America Merrill Lynch.

Financial education is a slow, but worthy process, Feast says.

“People don’t just automatically start to show an immediate impact to their behavior,” she says. But, “if [employees] take steps, [they] will start to gain control and get more confidence.”

See the original article Here.

Source:

Gladych P. (2017 June 7). Rising healthcare costs hurting retirement contributions [Web blog post]. Retrieved from address https://www.benefitnews.com/news/rising-healthcare-costs-hurting-retirement-contributions


Millennials Lead Generational Split on Health Benefits

Did you know that millennial employees are more likely to focus on the benefits and costs associated with their healthcare plans compared to older employees? Take a look at this article by Amanda Eisenberg from Employee Benefit Adviser on why millennials are so much more involved with their healthcare plans.

Millennials are more likely to partake in cost-saving healthcare decisions than their older counterparts, according to new analysis from EBRI.

Employees born in 1977 or later, the millennial age range in this analysis, are well informed about their health plan and report higher levels of satisfaction with the health plan choices and financial aspects of their health plans than baby boomers and Gen Xers, according to the 2017 “Consumer Engagement in Health Care and Choice of Health Plan” report.

Millennials also are more likely to ask for a generic instead of a brand name drug (47%), develop a budget to manage healthcare expenses (35%) and check whether the health plan would cover care or medication (57%) compared to Generation X or baby boomers, according to the Employee Benefit Research Institute, a nonpartisan research institute based in Washington, D.C.

Paul Fronstin, co-author of the study, attributed the generational attitude differences to the frequency employees interact with the health system and familiarity with technology.

“Older people are not used to using tools like online calculators to figure out health costs,” says EBRI’s director of health research and education program.

On the other hand, older generations have more experience buying and using healthcare than millennials, who are unlikely to contact cancer, heart disease and other illnesses that generally plague middle-aged and older employees, says Fronstin.

“It may be less stressful to pick the wrong plan and it may be coming out in [millennials’] attitudes,” he says. “Millennial attitudes could easily change as they get older and use more healthcare.”

The data comes from a 2015 poll of polled 3,590 adults between the ages of 21 and 64 who had health insurance provided through an employer (82%), purchased directly from a carrier or purchased through a government exchange.

The data, while two years old, doesn’t change the underlying attitudes toward healthcare options and costs, says Fronstin.

Yet determining those attitudes and a corresponding benefits plan is a major struggle for employers, he says.

Baby boomers and millennials “are both big segments of the population that most employers rely on,” Fronstin says. “You’ve got different groups here. If you want to be as effective as possible and get the most productivity, you need to understand where they’re coming from.”

See the original article Here.

Source:

Eisenberg A. (2017 May 29). Millennials lead generational split on health benefits [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/millennials-lead-generational-split-on-health-benefits?brief=00000152-1443-d1cc-a5fa-7cfba3c60000


How the Senate Better Care Reconciliation Act (BCRA) Could Affect Coverage and Premiums for Older Adults

The Senate is on the verge of voting for the Better Care Reconciliation Act (BCRA) a new replacement to the ACA. Find out how the passing of the BCRA will impact older Americans and their healthcare in this informative article by Kaiser Family Foundation.

Prior to the Affordable Care Act (ACA), adults in their 50s and early 60s were arguably most at risk in the private health insurance market. They were more likely than younger adults to be diagnosed with certain conditions, like cancer and diabetes, for which insurers denied coverage. They were also more likely to face unaffordable premiums because insurers had broad latitude (in nearly all states) to set high premiums for older and sicker enrollees.

The ACA included several provisions that aimed to address problems older adults faced in finding more affordable health insurance coverage, including guaranteed access to insurance, limits on age rating, and a prohibition on premium surcharges for people with pre-existing conditions. Following passage of a bill to repeal and replace the ACA in the House of Representatives on May 4, 2017, the Senate has released a discussion draft of its proposal, called the Better Care Reconciliation Act of 2017 (BCRA) on June 26, 2017, that follows a somewhat different approach.

The Senate BCRA discussion draft would make a number of changes to current law that would result in an increase of four million 50-64-year-olds without health insurance in 2026, according to CBO’s analysis.

The Senate proposal would disproportionately affect low-income older adults with incomes below 200% of the federal poverty level (FPL): three of the four million 50-64-year-olds projected to lose health insurance in 2026 would be low-income. CBO projects the uninsured rate for low-income older adults would rise from 11% under current law to 26% under the BCRA by 2026.

The increase in the number and share of uninsured older adults would be due to several changes made by the BCRA to private health insurance market rules and subsidies, as well as changes to the Medicaid program.

CHANGES AFFECTING PRIVATE HEALTH INSURANCE

Age Bands. Under current law, insurers are prohibited from charging older adults more than 3-times the premium amount for younger adults. The Senate bill would allow insurers to charge older adults five-times more than younger adults, beginning in 2019. States would have flexibility to establish different age bands (broader or narrower). CBO estimates that age rating would increase premiums significantly for plans at all metal levels for older adults. The impact of age rating would be such that, for a 64-year-old, the national average premium for an unsubsidized bronze plan in 2026 would increase from $12,900 (current law) to $16,000 (BCRA). The wider age bands permitted under the BCRA would result in higher premiums for an unsubsidized bronze plan than the premium for an unsubsidized silver plan under the current law age-rating standard.

Tax Credits. The Senate’s BCRA makes three key changes affecting premium tax credits for people in the non-group insurance market. First, it changes the income eligibility for tax credits, extending eligibility to people with income below the FPL but capping eligibility at income of 350% FPL. Under current law, income eligibility for tax credits is 100%-400% FPL. This change has the effect of reducing premiums for people with incomes below poverty in the marketplace who are not otherwise eligible for Medicaid (discussed further below) while increasing premiums for people with incomes between 350%-400% FPL.

Second, BCRA changes the level of subsidy for people based on age. Under both current law and the BCRA, individuals must pay a required contribution amount, based on income, toward the cost of a benchmark plan; the premium tax credit equals the difference between the cost of the benchmark plan and the required individual contribution. Under current law, the required contribution rate is the same for all people at the same income level regardless of age. However, under the BCRA, the required contribution amount would increase with age for people with an income above 150% FPL. For example, under current law, at 350% FPL, individuals are required to contribute the same percentage of income toward the benchmark plan, regardless of age (9.69% in 2017). Under the BCRA, starting in 2020, a 24-year-old would contribute about 6.4% of income, while a 60-year-old would have to contribute 16.2% of income.1

Third, the Senate proposal reduces the value of the benchmark plan used to determine premium tax credits from a more generous silver-level plan (under current law) to the equivalent of a bronze plan (under BCRA). Deductibles under bronze plans are much higher than under silver plans (in 2017, on average, $6,105 for bronze plans vs. $3,609 for silver plans). Under current law, silver plan deductibles are further reduced by cost-sharing subsidies for eligible individuals with incomes below 250% FPL (on average to $255, $809, or $2,904, depending on income). The BCRA eliminates cost-sharing subsidies starting in 2020. As a result, people using tax credits to buy a “benchmark” bronze plan would face significantly higher deductibles under the Senate proposal than under current law.

For older adults with income above the poverty level, the combined impact of these changes would be to increase the out-of-pocket cost for premiums at all income levels. For example, a 64-year old with an income of $26,500 would see premiums increase by $4,800 on average for a silver plan in 2026; a 64-year old with an income of $56,800 could see premiums increase of $13,700 in 2026, according to CBO.

Premium tax credits under the BCRA would continue to be based on the cost of a local benchmark policy, so results would vary geographically. Older adults living in higher cost areas could see greater dollar increases, while people living in lower cost areas could see lower increases.

For a bronze plan, the national average premium expense for a 64-year old could increase by $2,000 for an individual with an income of $26,500 in 2026 and by as much as $11,600 for an older adult with $56,800 in income.

Under current law, people with income below 100% FPL generally are not eligible for premium tax credits. The ACA extended Medicaid eligibility to adults below 138% FPL, but the Supreme Court subsequently ruled the expansion is a state option. To date 19 states have not elected the Medicaid expansion, leaving 2.6 millionuninsured low-income adults in this coverage gap.

For older adults with income below 100% FPL who are not eligible for Medicaid, CBO estimates the extension of premium tax credit eligibility will significantly reduce the net premium expense for a 64-year-old in 2026 relative to current law (e.g., by more than $12,000 for an individual at 75% FPL).

However, CBO estimates that few low-income people would purchase any plan. Even with relatively low premiums, older adults with very low incomes may choose to go without coverage due to relatively high, unaffordable deductibles. For example, an individual with an income of $11,400 (75% FPL) who is not eligible for Medicaid, would pay $300 in premiums in 2026 under BCRA but face a deductible in excess of $6,000 – which amounts to more than half of his or her income that year.

On average, 55-64 year-olds would pay 115% higher premiums for a silver plan in 2020 under the BCRA after taking tax credits into account. Low-income 55-64-year-olds would pay 294% higher premiums relative to current law.

CHANGES TO MEDICAID

Changes to Medicaid proposed in the Senate bill also contribute to the increase in the projected increase in the number of uninsured older adults nationwide. The BCRA would limit federal funds for states that have elected to expand coverage under Medicaid for low-income adults, phasing down the higher federal match for these expansion states over three years (2021-2023). This provision, coupled with a new cap on the growth in federal Medicaid funding over time on a per capita basis, would result in an estimated 15 million people losing Medicaid coverage by 2026 according to CBO, some of whom are counted among the four million older adults projected to lose health insurance under the BCRA, shown in Figure 1. In 2013, about 6.5 million 50-64-year-olds relied on Medicaid for their health insurance coverage, a number that has likely increased due to the Medicaid expansion.2 Since 2013, Medicaid enrollment overall has grown by nearly 30%.

IMPACT ON OLDER ADULTS ON MEDICARE

The loss of coverage for adults in their 50s and early 60s could have ripple effects for Medicare, a possibility that has received little attention. If the BCRA results in a loss of health insurance for a meaningful number of people in their late 50s and early 60s, as CBO projects, there is good reason to believe that people who lose insurance will delay care, if they can, until they turn 65 and become eligible for Medicare, and then use more services once on Medicare. This could cause Medicare spending to increase, which would lead to increases in Medicare premiums and cost-sharing requirements.3

The proposed BCRA changes to Medicaid are also expected to affect benefits and coverage for older, low-income adults on Medicare. Today, 11 million low-income people on Medicare have supplemental coverage under Medicaid that helps cover the cost of Medicare’s premiums and cost-sharing requirements, and the cost of services not covered by Medicare, such as nursing home and home- and community-based long-term services and supports. The BCRA reduces the trajectory of Medicaid spending, with new caps on the growth of benefit spending per person; these constraints are expected to put new fiscal pressure on states to control costs that could ultimately affect coverage and benefits available to low-income people on Medicare. Under the BCRA, the growth in Medicaid per capita spending for elderly and disabled beneficiaries is dialed down to a slower growth rate, from CPI-M+1 to CPI-U beginning in 2025, below currently projected growth rates, just as the first of the Boomer generation reaches their 80s and is more likely to need Medicaid-funded long-term services and supports.

DISCUSSION

The Senate bill to repeal and replace the ACA, known as the Better Care Reconciliation Act of 2017 (BCRA), if enacted, would be expected to result in an increase of four million uninsured 50-64-year olds in 2026, relative to current law. The increase is due to a number of factors, including higher premiums at virtually all income levels for older adults, potentially unaffordable deductibles for older adults with very low incomes, , and reductions in coverage under Medicaid. Reductions in coverage could have unanticipated spillover effects for Medicare in the form of higher premiums and cost sharing, if pre-65 adults need more services when they age on to Medicare as a result of being uninsured beforehand. The BCRA would also impose new, permanent caps on Medicaid spending which could affect coverage and costs for low-income people on Medicare.

Other changes in BCRA will affect Medicare directly. The BCRA would repeal the Medicare payroll tax imposed on high earners included in the ACA. This provision, according to CMS, will accelerate the insolvency of the Medicare Hospital Insurance Trust Fund and put the financing of future Medicare benefits at greater risk for current and future generations of older adults – another factor to consider as this debate moves forward.

See the original article Here.

Source:

Nueman T., Pollitz K., Levitt L. (2017 June 29). How the senate better care reconciliation act (BCRA) could affect coverage and premiums for older adults [Web blog post]. Retrieved from address http://www.kff.org/health-reform/issue-brief/how-the-senate-better-care-reconciliation-act-bcra-could-affect-coverage-and-premiums-for-older-adults/


Coverage Losses by State for the Senate Health Care Repeal Bill

The Congressional Budget Office has just released its score on the Better Care Reconciliation Act (BCRA).  Find out how each state will be impacted by the implementation of BCRA  in this great article by Emily Gee from the Center for American Progress.

The Congressional Budget Office (CBO) has released its score of the Senate’s health care repeal plan, showing that the bill would eliminate coverage for 15 million Americans next year and for 22 million by 2026. The CBO projects that the Senate bill would slash Medicaid funding by $772 billion over the next decade; increase individual market premiums by 20 percent next year; and make comprehensive coverage “extremely expensive” in some markets.

The score, released by Congress’ nonpartisan budget agency, comes amid an otherwise secretive process of drafting and dealmaking by Senate Republicans. Unlike the Senate’s consideration of the Affordable Care Act (ACA), which involved dozens of public hearings and roundtables plus weeks of debate, Senate Republican leadership released the first public draft of its Better Care Reconciliation Act (BCRA) just days before it hopes to hold a vote.

The Center for American Progress has estimated how many Americans would lose coverage by state and congressional district based on the CBO’s projections. By 2026, on average, about 50,500 fewer people will have coverage in each congressional district. Table 1 provides estimates by state, and a spreadsheet of estimates by state and district can be downloaded at the end of this column.

The coverage losses under the BCRA would be concentrated in the Medicaid program, but the level of private coverage would also drop compared to the current law. The CBO projects that, by 2026, there will be 15 million fewer people with Medicaid coverage and 7 million fewer with individual market coverage. Our Medicaid numbers reflect that states that have expanded their programs under the ACA would see federal funding drop starting in 2021 and that the bill would discourage expansion among states that would otherwise have done so in the future.

Like the House’s repeal bill, the Senate’s version contains a provision allowing states to waive the requirement that plans cover essential health benefits (EHB). The CBO predicts that half of the population would live in waiver states under the Senate bill. The CBO did not specify which states it believes are most likely to secure waivers; therefore, we did not impose any assumptions about which individual states would receive waivers in our estimates. Even though the demographic composition of coverage losses would differ among waiver and nonwaiver states, for this analysis we assume that all states’ individual markets would shrink.

CBO expects that state waivers could put coverage for maternity care, mental health care, and high-cost prescription drugs “at risk.” CBO projects that “all insurance in the nongroup market would become very expensive for at least a short period of time for a small fraction of the population residing in areas in which states’ implementation of waivers with major changes caused market disruption.” Note that health insurance experts have noted that in addition to directly lowering standards for individual market coverage, waivers would also indirectly subject people in employer coverage to annual and lifetime limits on benefits.

The CBO’s score lists multiple reasons why out-of-pocket costs for individual market enrollees would rise under the bill. One reason is that bill’s changes to premium subsidies means that most people would end up buying coverage resembling bronze-level plans, which today typically have annual deductibles of $6,000. In addition, EHB waivers would force enrollees who could not afford supplemental coverage for non-covered benefits out of pocket while also allowing issuers to set limits on coverage.

In summary, the CBO projects that the effects of the Senate bill would be largely similar to those of the house bill: tens of millions of people would no longer have coverage, and those who remained insured see the quality of their coverage erode substantially. In just a few days, the Senate will vote to turn these dire projections into reality.

Methodology

Our estimates of coverage reductions follow the same methodology we used previously for the House’s  health care repeal bill. We combine the CBO’s projected national net effects of the House-passed bill on coverage with state and local data from the Kaiser Family Foundation, the American Community Survey from the U.S. Census, and administrative data from the Centers for Medicare & Medicaid Services (CMS).

Florida, North Carolina, and Virginia redrew their district boundaries prior to the 2016 elections. While the rest of our data uses census estimates corresponding to congressional districts for the 114th Congress, we instead used county-level data from the 2015 five-year American Community Survey to determine the geographic distribution of the population by insurance type in these three states. We matched county data to congressional districts for the 115th Congress using a geographic crosswalk file provided by the Kaiser Family Foundation.

Our estimates of reductions in Medicaid by district required a number of assumptions. CBO projected that a total 15 million fewer people would have Medicaid coverage by 2026 under the Senate bill: 5 million fewer would be covered by additional Medicaid expansion in new states, and 10 million fewer would have Medicaid coverage in current expansion states and among pre-ACA eligibility groups in all states. The CBO projected that, under the ACA, additional Medicaid expansion would increase the proportion of the newly eligible population residing in expansion states from 50 percent to 80 percent by 2026. It projected that just 30 percent of the newly eligible population would be in expansion states. Extrapolating from the CBO’s numbers, we estimate the Senate bill results in a Medicaid coverage reduction of 3.3 million enrollees in current expansion states by 2026.

We then assume the remaining 6.7 million people who would lose Medicaid coverage are from the program’s pre-ACA eligibility categories: low-income adults, low-income children, the aged, and disabled individuals. We used enrollment tables published by the Medicaid and CHIP Payment Access Commission (MACPAC) to determine total state enrollment and each eligibility category’s share of the total, and we assumed that only some of the disabled were nonelderly. We then divided state totals among districts according to each’s Medicaid enrollment in the American Community Survey. Because each of the major nonexpansion categories is subject to per capita caps under the bill, we reduced enrollment in all by the same percentage.

Because we do not know which individual states would participate in Medicaid expansion in 2026 in either scenario, our estimates give nonexpansion states the average effect of forgone expansion and all expansion states the average effect of rolling back eligibility. We divided the 5 million enrollment reduction due to forgone expansion among nonexpansion states’ districts proportionally by the number of low-income uninsured. We made each expansion state’s share of that 3.3 million proportional to its Medicaid expansion enrollment in its most recent CMS report and then allocated state totals to districts proportional to the increase in nonelderly adult enrollment between 2013 and 2015. For Louisiana, which recently expanded Medicaid, we took our statewide total from state data and allocated to districts by the number of low-income uninsured adults.

Medicaid covers seniors who qualify as aged or disabled. Although the CBO did not specify the Medicaid coverage reduction that would occur among seniors under per capita caps, applying to elderly enrollees the same percentage reduction we calculated for nonexpansion Medicaid enrollees implies that 900,000 could lose Medicaid.

Lastly, our estimates of the reduction in exchange, the Basic Health Plan, and other nongroup coverage are proportional to the Kaiser Family Foundation’s estimates of exchange enrollment by congressional district. The House bill reduces enrollment in nongroup coverage, including the exchanges, by 7 million relative to the ACA. To apportion this coverage loss among congressional districts, we assumed that the coverage losses would be largest in areas with higher ACA exchange enrollment and in states where we estimated the average cost per enrollee would increase most under an earlier version of the AHCA.

The CBO projects that the net reduction in coverage for the two categories of employer-sponsored insurance and “other coverage” would be between zero and 500,000 people in 2026. We did not include these categories in our estimates.

See the original article Here.

Source:

Gee E. (2017 June 27). Coverage losses by state for the senate health care repeal bill [Web blog post]. Retrieved from address https://www.americanprogress.org/issues/healthcare/news/2017/06/27/435112/coverage-losses-state-senate-health-care-repeal-bill/


6 Favorable Changes to HSAs Under GOP Health Bill

With the passing of the AHCA, Health Savings Accounts (HSAs) are on the verge of expansion. Check out this article by Emily Zulz of Benefits Pro and see how this new legislation will impact HSA's.

Current legislature sitting in Congress -- including the American Health Care Act -- indicates favorable changes for health savings accounts.

Since the new Congress began in January, there have been more than 20 bills proposed that impact consumer-directed health care, and more specifically HSAs. In May, the House of Representatives narrowly passed the American Health Care Act.

A new report from HSA Bank provides insight into specific impacts on HSAs and consumer-directed health care outlined in the American Health Care Act, as well as examines the other proposed legislation.

“Whether they get passed or not, I don’t expect that to have a negative impact on HSAs,” Chad Wilkins, executive vice president and head of HSA Bank, told ThinkAdvisor. “We’ll continue to see that kind of growth going forward. And if they do get passed, we’ll see more wind at the back of high-deductible health plans and HSAs.”

HSAs, which can be as much a retirement savings vehicle as a health care financing plan, have grown in popularity recently.

The number of people enrolled in HSAs continues to grow, although more slowly than in previous years. According to America's Health Insurance Plan report, 20.2 million U.S. residents were covered through HSA-compatible, individual, small-group or large-group plans in 2016.

A Fidelity analysis shows a surge in health savings account in the third quarter of last year.

Wilkins, who co-authored the report with Kevin Robertson, senior vice president and chief revenue officer, attributes the growth in HSAs to both the cost standpoint for employers offering plans, as well as the cost savings for individuals both today and in retirement.

And he predicts this growth and popularity will continue to expand -- despite what happens in Congress.

“There’s been a lot of changes in legislators over the past 10 years and HSAs have stayed relatively stable in that world,” Wilkens said.

The report provides insight into the six specific impacts on HSAs and CDH plans outlined in AHCA, as passed by the House, with a focus on how they will positively impact individuals' ability to own their health.

The top-ranking Democrat on the Senate side of the Joint Economic Committee, though, has said expanding the health savings account program would do little to help ordinary Americans cope with cuts in Affordable Care Act coverage expansion programs.

According to Robertson, these impacts “focus on expanding access to health savings accounts and CDH plans for Americans.”

1. Raises HSA contribution limits to the high-deductible health plan (HDHP) out-of-pocket maximum.

The current 2017 HSA contribution limits are $3,400 for a single plan and $6,750 for a family plan. The proposed 2018 contribution limits would increase that to $6,550 for a single plan and $13,100 for a family plan.

2. Repeals the ACA contribution limit on flexible spending accounts (FSAs) (currently $2,600 for 2017)

Approximately 20 percent of Americans covered by private insurance are able to contribute to an HSA since they are enrolled in a qualified HDHP, according to the report. For those not covered by an HDHP, this change effectively allows for significantly higher contributions to help cover large out-of-pocket expenses.

3. Allows spouses to make catch-up contributions to the same HSA

“The most significant obstacle to maximizing spousal contributions has been the aggravation of having to open a second account,” the report says.

This change will make it easier for seniors to maximize their savings for retirement years, both in terms of lower administration costs, and simplification of the contribution process.

4. Repeals the prescription requirement for over-the-counter medications as qualified medical expense distributions from HSAs, FSAs, and health reimbursement arrangements (HRAs)

The ACA raised the prices for anyone purchasing over-the-counter medications, and with this repeal, it will immediately lower healthcare costs for people using HSAs, FSAs, and HRAs to purchase these products, according to the report.

5. Lowers the penalty for non-qualified HSA distributions made prior to age 65 from 20 percent to 10 percent

This penalty exists to ensure that HSAs are used as health care savings tools and not tax shelters for assets. The report says a lower penalty would make HSAs more attractive since “the fear of a 20 percent penalty may have been a detractor in individuals using HSAs as a savings account.”

6. Allows for qualified distributions to reimburse medical expenses incurred within 60 days of HDHP coverage but before HSA account is established

“Even though an individual may be covered by an HSA-qualified health plan, they are not allowed to claim their medical expenses as qualified distributions until they have met the legal requirements of establishing their HSA,” according to the report.

This provision would give individuals a 60-day window to cover these instances.

See the original article Here.

Source:

Emily Zulz (2017 June 16). 6 favorable changes to HSAs under GOP health bill [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/06/16/6-favorable-changes-to-hsas-under-gop-health-bill?ref=hp-news&page_all=1


Well-Being Strategies for a Diverse Workforce, Building Value at an Individual Level

Great article from our partner, United Benefit Advisors (UBA) by Lindsay Simpson.

Your organization has 312 employees, which means you have 312 different needs for well-being support. Well-being strategies should not be a one-size-fits-all approach. Developing a set of flexible and responsive well-being strategies that meet changing individual needs throughout an employee’s tenure is a critical way to both attract and retain talent. A few case studies to illustrate:

Jordan is serving in an entry-level position. This single, gender fluid, 20-something is eager to learn and grow. In conversations with HR, Jordan has also indicated a high level of overall stress due to a burdensome education loan and is barely able to make loan payments on top of rent and other monthly expenses. Jordan’s outlook on saving for retirement is grim. At the same time, they are an active member of the local young professional network and keeps fit while playing in a competitive Ultimate league.

Anvi has been in an executive leadership role with the organization for seven years. She is a gifted and valued trailblazer who keeps the organization nimble in a climate of constant change. Despite spending long hours at work, her colleagues know little about Anvi’s family and personal life, as she is rather private. From time to time though, Anvi demonstrates affection for her team by sharing artfully created meals that illustrate her diverse cooking skills and interests.

Mark has been a dedicated, career-long, mid-level employee in accounting. Although lately he shows declining interest in his once-beloved work. Colleagues have noticed in Mark a new tendency to decline offers to share lunch or coffee breaks. Last year, Mark led the company volunteerism committee, but has recused himself from this duty, citing a conflict of interest with his role as a finance officer for a local non-profit organization.

Each of these individuals show up to the workplace with a unique set of values, talents, beliefs, interests, and resources. At the same time, all employees benefit from a workplace culture that attends to each person’s sense of purpose, plus physical, social, financial and community well-being. It can be a daunting challenge to meet such diverse needs and interests, which is why we must build programs and policies with employees, listening to what they want and seeking out ways to efficiently design a system of supports. The first step to any thoughtful program is to conduct a needs assessment. Turn up the volume on your curiosity and lead with the question: What do employees want? Consider gathering responses by survey, current HR data sources, and focus groups. Be sure to gather demographic information that will help segment the findings. The results may confirm your beliefs about employee wishes or reveal interesting surprises, as noted in this example.

In a 2015 survey of 1,647 folks across 11 diverse organizations, the American Institute of Preventative Medicine found the following:

  • Incentive strategies: Almost unanimously, employees favored reduced health insurance premium (34 percent) and cash (25 percent) as incentives to get healthier. However, 53 percent of those age 70 and older noted they do not need an incentive to be healthier.
  • Well-being topics of interest: Nutrition (78 percent) and physical activity (77 percent) topics were of highest interest by those age 18 to 69. These same age groups also favored stress management topics more than colleagues age 70 and older. Moderate interest in depression was common among all age groups, and all age groups showed the least interest in tobacco cessation. Compared with colleagues of older age groups, the youngest cohort (18 to 24) indicated high interest in sleep enhancement.
  • Program offerings: All age groups favored health risk assessments (26 percent) and health challenges (25 percent) over other well-being program offerings. Furthermore, older groups (50 to 69 and 70 and older) prefer in-person educational seminars, and younger employees (18 to 24) were more likely to engage in weight loss programs.
  • Fitness devices: The oldest individuals were more likely than all younger individuals to report owning a personal fitness tracking device such as a Fitbit or pedometer, 40 percent age 70 and older, 37 percent age 50 to 69, 31 percent age 33 to 49, 29 percent age 25 to 32, and 17 percent age 18 to 24.

A small-scale needs and interest study like this can challenge our biases about certain groups within our employee population and reveal key details about the value employees hold for well-being programs. Results should inform design of a well-being strategy that accurately and cost-effectively meets a range of needs in the workplace. After all, “research is formalized curiosity. It is poking and prying with purpose,” said Zora Neale Hurston. The pursuit of growing a cost-effective culture of well-being and individual value for programmatic supports will be more beneficial to organizational health than a hard measure of return on investment.

See the original article Here.

Source:

Simpson L. (2017 May 30). Well-being strategies for a diverse workforce, building value at an individual level [Web blog post]. Retrieved from address http://blog.ubabenefits.com/well-being-strategies-for-a-diverse-workforce-building-value-at-an-individual-level


What Employers Need to Know about the Senate Proposed Healthcare Bill

Find out how the Senate's proposed healthcare bill will impact employers in this great article from our partner, United Benefit Advisors (UBA) by Danielle Capilla.

On June 22, 2017, the United States Senate released a "Discussion Draft" of the "Better Care Reconciliation Act of 2017" (BCRA), which would substitute the House's House Resolution 1628, a reconciliation bill aimed at "repealing and replacing" the Patient Protection and Affordable Care Act (ACA). The House bill was titled the "American Health Care Act of 2017" (AHCA). Employers with group health plans should continue to monitor the progress in Washington, D.C., and should not stop adhering to any provisions of the ACA in the interim, or begin planning to comply with provisions in either the BCRA or the AHCA.

Next Steps

  • The Congressional Budget Office (CBO) is expected to score the bill by Monday, June 26, 2017.
  • The Senate will likely begin the voting process on the bill on June 28 and a final vote is anticipated sometime on June 29.
  • The Senate and House versions will have to be reconciled. This can be done with a conference committee, or by sending amendments back and forth between the chambers. With a conference committee, a conference report requires agreement by a majority of conferees from the House, and a majority of conferees by the Senate (not both together). Alternatively, the House could simply agree to the Senate version, or start over again with new legislation.

The BCRA

Like the AHCA, the BCRA makes numerous changes to current law, much of which impact the individual market, Medicare, and Medicaid with effects on employer sponsored group health plans. Also like the AHCA, the BCRA removes both the individual and the employer shared responsibility penalties. The BCRA also pushes implementation of the Cadillac tax to 2025 and permits states to waive essential health benefit (EHB) requirements.

The BCRA would change the excise tax paid by health savings account (HSA) owners who use their HSA funds on expenses that are not medical expenses under the Internal Revenue Code from the current 20 percent to 10 percent. It would also change the maximum contribution limits to HSAs to the amount of the accompanying high deductible health plan's deductible and out-of-pocket limitation and provide for both spouses to make catch-up contributions to HSAs. The AHCA contains those provisions as well.

Like the AHCA, the BCRA would remove the $2,600 contribution limit to flexible health spending accounts (FSAs) for taxable years beginning after December 31, 2017.

The BCRA would allow individuals to remain on their parents' plan until age 26 (the same as the ACA's regulations, and the AHCA) and would not allow insurers to increase premium costs or deny coverage based on pre-existing conditions. Conversely, the AHCA provides for a "continuous health insurance coverage incentive," which will allow health insurers to charge policyholders an amount equal to 30 percent of the monthly premium in the individual and small group market, if the individual failed to have creditable coverage for 63 or more days during an applicable 12-month look-back period.

The BCRA would also return permissible age band rating (for purposes of calculating health plan premiums) to the pre-ACA ratio of 5:1, rather than the ACA's 3:1. This allows older individuals to be charged up to five times more than what younger individuals pay for the same policy, rather than up to the ACA limit of three times more. This is also proposed in the AHCA.

The ACA's cost sharing subsidies for insurers would be eliminated in 2020, with the ability of the President to eliminate them earlier. The ACA's current premium tax credits for individuals to use when purchasing Marketplace coverage would be based on age, income, and geography, and would lower the top threshold of income eligible to receive them from 400 percent of the federal poverty level (FPL) to 350 percent of the FPL. The ACA allowed any "alien lawfully present in the US" to utilize the premium tax credit; however, the BCRA would change that to "a qualified alien" under the definition provided in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The BCRA would also benchmark against the applicable median cost benchmark plan, rather than the second lowest cost silver plan.

See the original article Here.

Source:

Capilla D. (2017 June 26). What employers need to know about the senate proposed healthcare bill [Web blog post]. Retrieved from address http://blog.ubabenefits.com/what-employers-need-to-know-about-the-senate-proposed-healthcare-bill


The American Health Care Act: Economic and Employment Consequences for States

Could health insurance reductions under the American Health Care Act (AHCA) cause problems for employment in the future? Check out this article from The Commonwealth Fund to learn more.

Abstract

Issue: The American Health Care Act (AHCA), passed by the U.S. House of Representatives, would repeal and replace the Affordable Care Act. The Congressional Budget Office indicates that the AHCA could increase the number of uninsured by 23 million by 2026.
Goal: To determine the consequences of the AHCA on employment and economic activity in every state.
Methods: We compute changes in federal spending and revenue from 2018 to 2026 for each state and use the PI+ model to project the effects on states’ employment and economies.
Findings and Conclusions: The AHCA would raise employment and economic activity at first, but lower them in the long run. It initially raises the federal deficit when taxes are repealed, leading to 864,000 more jobs in 2018. In later years, reductions in support for health insurance cause negative economic effects. By 2026, 924,000 jobs would be lost, gross state products would be $93 billion lower, and business output would be $148 billion less. About three-quarters of jobs lost (725,000) would be in the health care sector. States which expanded Medicaid would experience faster and deeper economic losses.

Background

On May 24, 2017, the U.S. House of Representatives passed the American Health Care Act (AHCA, H.R. 1628) to partially repeal and replace the Affordable Care Act (ACA), also known as Obamacare. The U.S. Senate is currently developing its own version of the legislation.

A January 2017 analysis found that repealing certain elements of the ACA—the Medicaid expansion and premium tax credits—could lead to 2.6 million jobs lost and lower gross state products of $1.5 trillion over five years.1,2 That brief focused only on specific repeal elements because other details were not available. This brief examines all aspects of the AHCA, including restructuring Medicaid and health tax credits and repealing ACA taxes (Exhibit 1).

Exhibit 1
Key Provisions of the American Health Care Act as Passed by the U.S. House of Representatives
Eliminates individual penalties for not having health insurance and penalties for employers that do not offer adequate coverage to employees. Raises premiums for people who do not maintain continuous insurance coverage.
Replaces the current income-related premium tax credits to subsidize nongroup health insurance with age-based tax credits. Allows premiums to be five times higher for the oldest individuals, compared to the current threefold maximum.
Restricts state Medicaid eligibility expansions for adults, primarily by reducing federal matching rates from 90 percent beginning in 2020 to rates ranging between 50 percent and 75 percent.
Creates temporary funding for safety-net health services in states that did not expand Medicaid.
Restructures Medicaid funding based on per capita allotments rather than the current entitlement. States may adopt fixed block grants instead.
Creates a Patient and State Stability Fund and Invisible Risk-Sharing Program.
Terminates the Prevention and Public Health Fund.
Repeals numerous taxes included in the ACA, including Medicare taxes on investment income and on high-income earnings, taxes on health insurance and medical devices, and a tax on high-cost insurance (i.e., the “Cadillac tax”); raises limits for health savings accounts and lowers the threshold for medical care deductions.
Allows states to waive key insurance rules, like community rating of health insurance and essential health benefits. Creates a fund that states could use to lower costs for those adversely affected by the waiver.

The Congressional Budget Office (CBO) reported the AHCA would increase the number of uninsured Americans under age 65 by 14 million in fiscal year 2018, eventually reaching 23 million more by 2026.3 A RAND analysis of an earlier version of the bill was similar: 14 million more uninsured in 2020 and 20 million in 2026.4

This report examines the potential economic effects of the AHCA from calendar years 2018 to 2026, including:

    • employment levels, measured as changes in the number of jobs created or lost due to policy changes
    • state economic growth, as measured by changes in gross state products in current dollars, adjusted for inflation; an aggregate measure of state economies, analogous to the gross domestic product at the national level

state business output,

    as measured by changes in business receipts in current dollars at production, wholesale, and retail levels, encompassing multiple levels of business activity.

Our estimates are based on changes in federal funding gained or lost to states, consumers, and businesses. The AHCA significantly reduces federal funding for Medicaid. It lowers federal match funding for the 31 states and District of Columbia that expanded Medicaid, encouraging them to discontinue their expansions. It gives states an option to either adopt per capita allotments for Medicaid or fixed block grants; either option lowers federal Medicaid expenditures. Eliminating the tax penalty for individuals without health insurance reduces incentives to purchase insurance, raising the number of uninsured people. Restructuring premium tax credits and widening age-related differences in premiums are expected to shrink nongroup insurance coverage and reduce federal spending for health insurance subsidies. The AHCA is designed so that tax cuts take effect sooner than reductions in health insurance subsidies. Thus, state employment and economies could grow at first but shrink in later years as the coverage reductions deepen.

How Federal Health Funding Stimulates Job Creation and State Economies

Federal health funds are used to purchase health care. Then, fiscal effects ripple out through the rest of the economy, creating employment and other economic growth. This phenomenon is called the multiplier effect. Health funds directly pay hospitals, doctors’ offices, and other providers; this is the direct effect of federal funding. These facilities use revenue to pay their employees and buy goods and services, such as rent or equipment; this is the indirect effect of the initial spending. In addition, there are induced effects that occur as health care employees or other businesses (and eventually their workers) use their income to purchase consumer goods like housing, transportation, or food, producing sales for a diverse range of businesses. Similarly, when federal taxes are reduced, consumers or businesses retain income and can purchase goods and services, invest, or save. Due to interstate commerce, each type of effect can flow across state lines.

Both government spending increases and tax reductions can stimulate job creation and economic growth. The relative effects depend on how the funds are used. Government spending or transfers, like health insurance subsidies, typically have stronger multiplier effects in stimulating consumption and economic growth than do tax cuts. Tax cuts usually aid people with high incomes who shift much of their gains into savings, stimulating less economic activity.5,6,7 A recent analysis found that 90 percent of the AHCA’s tax cuts go to the top one-fifth of the population by income.8

This report estimates how the AHCA will change federal funds gained or lost for all 50 states and the District of Columbia from 2018 to 2026. We allocate federal funding changes, based on CBO estimates, for each state. We then analyze how federal funding changes ripple through state economies, using the PI+ economic model, developed by Regional Economic Models, Inc. (REMI).9 (See Appendix B. Study Methods.)

Findings

Overall Effects

As illustrated in Exhibit 2, most of the AHCA’s tax repeals begin almost at once, while coverage-related spending reductions phase in. The net effect initially raises the federal deficit. In 2018, the number of jobs would rise by 864,000 and state economies would grow. Health sector employment begins to fall immediately in 2018, with a loss of 24,000 jobs, and continues dropping to 725,000 health jobs lost by 2026 (Exhibit 3). Most other employment sectors gain initially, but then drop off and experience losses.

By 2020, the reduction in federal funding for coverage would roughly equal the total level of tax cuts. By the following year, 2021, coverage reductions outpace tax cuts. As a result, there are 205,000 fewer jobs than without the AHCA and state economies begin to shrink.

By 2026, 924,000 fewer people would have jobs. Gross state products would drop by $93 billion and business output would be $148 billion lower. These downward trends would continue after 2026.

Looking at Coverage-Related and Tax Repeal Policies

To better understand how the AHCA affects state economies and employment, Exhibit 4 looks at the two major components of the AHCA separately. The coverage-related policies (Title I of the AHCA and sections related to premium tax credits and individual and employer mandates) generally lower federal spending, particularly due to cuts to Medicaid and premium tax credits. Some policies partially offset those large cuts, such as the Patient and State Stability Fund. The tax repeal policies (Title II, except for sections about premium tax credits and individual and employer mandates), such as repeal of Medicare-related taxes, Cadillac tax, or medical device tax, predominantly help people with high incomes or selected businesses.

Implemented alone, the coverage-related policies would lead to steep job losses over time, reaching 1.9 million by 2026, driven by deep Medicaid cuts (Exhibit 4). Job losses begin to mount in 2019.

Alternatively, the tax repeal policies on their own would be associated with higher employment and state economic growth. Gains begin with 837,000 more jobs in 2018; this rises through 2024, and leads to 1 million additional jobs in 2026. Combined, tax repeal and coverage-related changes lead to initial economic and employment growth but eventual losses.

The detailed employment results show how these two components of the AHCA affect different economic sectors. Coverage and spending-related policies are directly related to funding for health services (e.g., Medicaid, premium tax credits, high-risk pools). The reductions directly affect the health sector—hospitals, doctors’ offices, or pharmacies—but then flow out to other sectors. Thus, about two-fifths of jobs lost due to coverage policies are in the health sector while three-fifths are in other sectors. Tax changes affect consumption broadly, spreading effects over most job sectors.

Within the health sector, job losses due to coverage-related cuts are much greater than gains due to tax repeal; losses in health care jobs begin immediately. In other sectors, employment grows at the beginning but later declines.

State-Level Effects

Consequences differ from state to state. We summarize data for nine states: Alaska, Florida, Kentucky, Maine, Michigan, New York, Ohio, Pennsylvania, and West Virginia. Exhibit 5 shows the effects of the AHCA in 2018 and in 2026. Complete results for all 50 states and the District of Columbia are available in Appendices A1–A4. In this analysis, states that expanded Medicaid tend to experience deeper and faster economic declines, although substantial losses occur even among nonexpansion states:

  • Eight of the nine states (Alaska, Florida, Kentucky, Maine, New York, Ohio, Pennsylvania, and West Virginia) begin with positive economic and employment effects in 2018, but are worse off by 2026, with outcomes typically turning negative well before 2026.
  • Michigan is worse off in 2018 and continues to decline through 2026. We assume Michigan will terminate its Medicaid expansion immediately because of a state law that automatically cancels the expansion if the federal matching rate changes.10 Six other states (Arkansas, Illinois, Indiana, New Hampshire, New Mexico, and Washington) have similar legislation and experience losses sooner than other states.
  • Most job losses are in health care. In six states (Florida, Kentucky, Maine, Michigan, Ohio, and West Virginia) health care job losses begin in 2018, but all nine states have significant reductions in health employment by 2026. Looking at the U.S. overall, in most states, losses in health care jobs begin by 2020 (Appendix A2).
  • States that expanded Medicaid have deeper and faster losses. Having earned more federal funds, they lose more when Medicaid matching rates fall. While cutting funds to states that expanded health insurance for low-income Medicaid populations, the bill temporarily increases funding to states that did not expand Medicaid. Nonetheless, states that did not expand Medicaid, like Florida and Maine, experience job and economic losses after a few years. In fact, Florida has the third-highest level of job loss in the nation by 2026.
  • Other factors that can affect the size of economic and employment effects include:
    • the extent to which states gained coverage in the ACA health insurance marketplaces; states with higher marketplace enrollment tend to lose more
    • the cost of health insurance in the state; the new tax credits are the same regardless of location, making insurance less affordable in high-cost states and reducing participation
    • age structure; older people will find insurance less affordable
    • state population size; the population size of states magnifies their losses or gains
    • other factors that affect tax distribution, like number of residents with investment income or high incomes or whether medical device or pharmaceutical manufacturers are located in the state.

Overall, the 10 states with the largest job losses by 2026 are: New York (86,000), Pennsylvania (85,000), Florida (83,000), Michigan (51,000), Illinois (46,000), New Jersey (42,000), Ohio (42,000), North Carolina (41,000), California (32,000), and Tennessee (28,000). Forty-seven states have job losses by 2026; four states (Colorado, Hawaii, Utah, and Washington) have small job gains in 2026, but would likely incur losses in another year or two (Appendix A1).

Conclusions

The House bill to repeal and replace the Affordable Care Act would greatly reduce the number of people with insurance coverage, effectively reversing gains made since the law’s enactment. The AHCA would initially create more employment and economic growth, driven by a federal deficit increase in 2018 and 2019, but the effects turn negative as coverage reductions deepen, with job losses and lower economic growth beginning in 2021. By 2026, 924,000 jobs would be lost, gross state products would be $93 billion lower, and business output could fall by $148 billion.

Health care has been one of the main areas of job growth in recent years.11 Under the AHCA, the sector would lose jobs immediately, with a loss of 24,000 jobs in 2018. By 2026, 725,000 fewer health sector jobs would exist. This would be a major reversal from current trends. While our analysis shows other employment sectors grow initially, most other sectors would experience losses within a decade.

It may be useful to look at these findings in a macroeconomic context. The U.S. unemployment rate for May 2017 was 4.3 percent, the lowest in 16 years and about half as high as during the recent recession. When unemployment is low, additional job growth creates a tighter labor market, so that businesses often have greater difficulties filling job vacancies. In turn, this can accelerate inflation.

It is likely that the business cycle will eventually slow down again. In that event, the AHCA could accentuate job loss and economic contraction. Combined with major increases in the number of uninsured, this could contribute to a period of economic and medical hardship in the U.S. The AHCA could exaggerate both the highs and lows of the business cycle. From a national policy perspective, it may be more useful to develop countercyclical policies that strengthen employment and the economy during times of contraction.

This analysis finds that the net effect of the AHCA would be a loss of almost 1 million jobs by 2026, combined with 23 million more Americans without health insurance, according to the CBO. In late May, the Trump administration released its budget proposal, which appears to propose an additional $610 billion in Medicaid cuts, beyond those included in the AHCA.12 Such deep cuts would further deepen the employment and economic losses discussed in this study.

This analysis has many limitations. We do not know whether or when the AHCA or an alternative will be enacted into law. Alternative policies could yield different effects. We focus only on the consequences of the AHCA. Other legislation, such as infrastructure, trade, national security, or tax policies, may be considered by Congress and might also affect economic growth and employment.

These projections, like others, are fraught with uncertainty. Economic, technical, or policy changes could alter results. In particular, the AHCA grants substantial discretion to states, such as in Medicaid expansions, waivers of federal regulations, and use of new funds like the Patient and State Stability Fund. While this analysis is aligned with CBO’s national estimates, we developed state-level projections, introducing further uncertainty. Our approach conservatively spreads changes across states and may underestimate the highs and lows for individual states.

See original article Here.

Source:

Ku, L., Steinmetz, E., Brantley, E., Holla, N., Bruen, B. (14 June 2017). The American Health Care Act: Economic and Employment Consequences for States. [Web Blog Post]. Retrieved from address http://www.commonwealthfund.org/publications/issue-briefs/2017/jun/ahca-economic-and-employment-consequences


Rising Health Care Costs Threatening Employees’ Financial Goals

Did you know that the rising costs of healthcare could be having a negative effect on your employees' financial goals? Check out this great read by Marlene Y. Satter from Benefits Pro on how your employees' finances are being impacted by the costs of healthcare.

Employees are under financial stress — big time. In fact, 56 percent of them are stressed about their financial situation, and more than half of them say it’s taking a toll on both their ability to focus and their productivity on the job.

That’s according to the latest Bank of America Merrill Lynch Workplace Benefits Report, which finds that not only are 53 percent of stressed employees having trouble concentrating on their work, the cost of health care is a big shadow cast over workers’ financial situations. And that’s already an issue, with 43 percent of employees owning up to spending 3 or more hours a week while at the office dealing with personal financial matters.

As more employees find themselves shelling out more from their own pockets to pay health care bills — 69 percent of workers said so in 2015, but 79 percent said so in 2016 — it’s no surprise to hear that health care costs are up 10 percent since 2015. No wonder they’re stressed; salaries certainly haven’t risen to match.

Those rising health care costs are taking a bite out of most employees’ other financial goals — among workers who have experienced increasing health care costs, 56 percent are having to save less toward other objectives.

Women in particular are abandoning more discretionary spending and debt management to cover health care costs than men, with 72 percent chucking spending on recreation or entertainment, compared with 59 percent of men; 63 percent saving less for retirement, compared with 62 percent of men; and 50 percent paying down less debt, compared with 46 percent of men.

And the more expensive health care becomes, the more employees appear to appreciate employer-provided health coverage — with workers ranking health benefits as their top employer benefit (40 percent), followed by their 401(k) plan (31 percent).

Even among employees who class themselves as optimists about their financial futures, worries about health care and its cost are weighing them down. And as might be expected, money woes weigh more on women than men, even — or perhaps especially — when it comes to health care. While 52 percent of men say that becoming seriously ill and unable to work is a major concern (even larger for men than having to work longer than they planned), 58 percent of women fear illness and subsequent absence from the workplace.

And more than half of employees say that financial stress is negatively affecting their physical health. Different generations feel the effects more, with 51 percent of boomers, 56 percent of Gen Xers and 68 percent of millennials saying money worries are literally making them sick. Employers need to be aware of this and take steps to deal with it, particularly since it translates into a toll not just on workers but on the employer’s bottom line — via higher absenteeism rates and higher health care costs.

See the original article Here.

Source:

Satter M. (2017 June 1). Rising health care costs threatening employees' financial goals [Web blog post]. Retrieved from address http://www.benefitspro.com/2017/06/01/rising-health-care-costs-threatening-employees-fin