Impact of Telemedicine on HSA Eligibility

One of the hottest benefit trends in 2016 is the adoption of free or low cost “telemedicine” programs to provide employees easy and affordable access to medical care. However, employers adopting these programs alongside high deductible health plans (HDHPs) need to be sure that they do not inadvertently disqualify the covered employees from eligibility for a health savings account (HSA).

The term “telemedicine” generally refers to healthrelated services delivered over the telephone or internet to employees and covers services ranging from non-specific wellness information about health conditions to primary care diagnosis and advice with prescription drug services. The employee’s cost for such services also varies and may consist of a charge on a “per-use” basis, or a monthly or annual fee for access. In many cases, employers are subsidizing the cost of the services or offering the services free of charge to encourage usage, which could create issues for employees with HSA coverage.

An HSA allows participants to defer compensation on a pre-tax basis for the purpose of paying eligible medical expenses if the participant is covered under an HDHP. In addition, the HSA participant must not be covered under any “disqualifying coverage.” Disqualifying coverage includes any health coverage that provides a benefit before the HDHP deductible is met and is often referred to as “first dollar coverage.” The IRS rules allow an exception from the first dollar coverage prohibition for certain types of coverage, including “permitted insurance” (for example, workers’ compensation, specified disease or illness insurance, per diem hospital benefits), “excepted benefits” (such as stand-alone dental or vision benefits), preventative care services, certain employee assistance programs (EAPs), and discount card programs allowing employees to receive discounted health services at managed care rates if the employee must pay for the balance until the HDHP deductible is met. Telemedicine programs that fall under one of the above categories will not prevent an individual from contributing to an HSA.

However, many telemedicine programs go beyond providing preventative care or EAP benefits and do not fall within the permitted insurance or excepted benefits categories. Thus, a telemedicine benefit could count as disqualifying coverage, for example, if the employer pays a portion of the cost of a telemedicine consultation, or the participant pays less than fair market value for access to the consultation, before meeting the HDHP deductible. Any telemedicine program providing primary care or prescription drug services in particular would likely trigger IRS scrutiny unless the employer can establish that the cost passed on to participants is the fair market value for the services. Although the IRS has not yet weighed in on the impact of telemedicine programs on HSA benefits, employers that sponsor HDHPs and telemedicine programs should consider the risks of potential HSA disqualification with legal counsel to ensure employees are not subjected to unintended income and excise taxes for participating in disqualifying coverage.

Content included in the Summer 2016 Benefits and Employment Briefing provided by our partner, United Benefit Advisors

Compliance Recap: August 2016

August remained relatively quiet in the employee benefits world, with only new draft versions of the instructions for Forms 1095-C, 1095-C, 1094-B and 1095-B. The new draft versions of the specific forms were released in July. The IRS also released the annual contribution limits for health savings accounts (HSAs) and the deductible minimums and out-of-pocket limits for high deductible health plans (HDHPs). Finally, the IRS issued proposed regulations on reporting minimum essential coverage (MEC).

UBA Updates

UBA released seven new advisors in August:

UBA updated existing guidance:

Reporting Minimum Essential Coverage

Minimum essential coverage (MEC) is the type of coverage that an individual must have under the Patient Protection and Affordable Care Act (ACA). Employers that are subject to the ACA's shared responsibility provisions (often called "play or pay") must offer MEC coverage that is affordable and provides minimum value. In fall 2015, the IRS issued Notice 2015-68 stating it was planning to propose regulations on reporting MEC coverage that would, among other things, require health insurance issuers to report coverage in catastrophic health insurance plans, as described in section 1302(e) of the ACA, provided through an Affordable Insurance Exchange (Exchange, also known as a Health Insurance Marketplace).

In August 2016, the IRS released the anticipated proposed regulations, incorporating the guidance given in Notice 2015-68. These regulations are generally proposed to apply for taxable years ending after December 31, 2015, and may be relied on for calendar years ending after December 31, 2013.

Read more about the proposed regulations.

2017 HSA and HDHP Limits Released

For calendar year 2017, the annual limitation on HSA deductions for an individual with self-only coverage under a high deductible health plan is $3,400. For calendar year 2017, the annual limitation on HSA deductions an individual with family coverage under a high deductible health plan is $6,750.

For calendar year 2017, a "high deductible health plan" is a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage.

Draft Reporting Instructions Released

The IRS released the draft reporting instructions for Forms 1094-C and 1095-C, and Forms 1094-B, and 1095-B. 1095-C Forms are due to employees by January 31, 2017. Paper filings are due to the IRS by February 28, 2017, and electronic filings are due by March 31, 2017. Penalties per form (for failure to file) have increased from $250 to $260.


The 1094-C instructions provide clarification on applicable large employers and controlled group reporting.

An ALE Member is, generally, a single person or entity that is an applicable large employer, or if applicable, each person or entity that is a member of an Aggregated ALE Group.

A Form 1094-C must be filed when an ALE Member files one or more Forms 1095-C. An ALE Member may choose to file multiple Forms 1094-C, each accompanied by Forms 1095-C for a portion of its employees, provided that a Form 1095-C is filed for each employee for whom the ALE Member is required to file. If an ALE Member files more than one Form 1094-C, one (and only one) Form 1094-C filed by the ALE Member must be identified on line 19, Part I as the Authoritative Transmittal, and, on the Authoritative Transmittal, the ALE Member must report certain aggregate data for all full-time employees and all employees, as applicable, of the ALE Member.


The instructions indicate Line 14 should never be left blank, even for months prior to and after an individual's employment. Two new codes are available for Line 14.

New codes 1J and 1K address conditional offers of spousal coverage (also referred to as coverage offered conditionally). A conditional offer is an offer of coverage that is subject to one or more reasonable, objective conditions (for example, an offer to cover an employee's spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer). Using new codes 1J and 1K, an ALE Member may report a conditional offer to a spouse as an offer of coverage, regardless of whether the spouse meets the reasonable, objective condition. A conditional offer generally would affect a spouse's eligibility for the premium tax credit under section 36B only if all conditions to the offer are satisfied (that is, the spouse was actually offered the coverage and was eligible for it). To help employees (and spouses) who have received a conditional offer determine their eligibility for the premium tax credit, the ALE Member should be prepared to provide, upon request, a list of any and all conditions applicable to the spousal offer of coverage.

The instructions also provide new information on reporting offers of COBRA coverage. Former employees (and their spouses or dependents) offered COBRA due to termination of employment would be reported as not being offered coverage on the 1095-C, without regard to their enrollment in COBRA. Employees offered COBRA during their employment are reported as having offers of coverage.

Employers who have more than 250 1095-C returns and who are not prepared to file electronically may file their first 250 forms on paper, and then pay the penalty for the missing remaining forms.

If you are required to file 250 or more information returns, you must file electronically. The 250-or-more requirement applies separately to each type of form filed and separately for original and corrected returns. For example, if you must file 500 Forms 1095-B and 100 Forms 1095-C, you must file Forms 1095-B electronically, but you are not required to file Forms 1095-C electronically. If you have 150 Forms 1095-C to correct, you may file the corrected returns on paper because they fall under the 250 threshold. However, if you have 300 Forms 1095-C to correct, they must be filed electronically. The electronic filing requirement does not apply if you apply for and receive a hardship waiver. The IRS encourages you to file electronically even though you are filing fewer than 250 returns. If you are required to file electronically but fail to do so, and you do not have an approved waiver, you may be subject to a penalty of $260 per return for failure to file electronically unless you establish reasonable cause. However, you can file up to 250 returns on paper; those returns will not be subject to a penalty for failure to file electronically. The penalty applies separately to original returns and corrected returns.

1094-B and 1095-B

Health insurance issuers are encouraged to report catastrophic health plan coverage for Marketplace plans for calendar year 2016. Form 1095-B now contains the language "Do not attach to your tax return. Keep for your records." The instructions were updated to reflect the fact that a taxpayer identification number (TIN) may be used on the 1095-B, Part I, lines 2 and 3, and Part IV, columns (b) and (c).

Question of the Month

Q. If an active employee is enrolled in the employer's group health plan and their spouse is Medicare eligible due to disability (not end stage renal disease), does Medicare or the group health plan pay first for the spouse's claims?

A. If the employer has 100 or more employees, the group health plan will pay first and Medicare will pay second. If the employer has fewer than 100 employees, Medicare will pay first and the group health plan will pay second.

Workers Overwhelmed by Health Care Decisions

Employees are feeling the stress of healthcare costs. In the article below by Jack Craver, he provides insight as to the pressures workers are currently dealing with in todays healthcare marketplace.

Original Post from on July 29, 2016

In case you haven’t noticed, Americans are in a tough spot on health care.

For one, their health care costs far more than that in any other country. Even worse, perhaps, they increasingly have many more decisions to make about how to pay for that care.

A new report demonstrates the frustration and hopelessness that grips so many in the face of health care decisions.

The study by Alegeus, the benefit account platform, surveyed 4,000 adults about their health care choices. It showed that there are seldom health or insurance-related choices that Americans make with relative ease or comfort.

There are no health care finance decisions, for instance, that a majority of Americans don’t find challenging. At the top of the list was “planning for out-of-pocket costs,” which two-thirds of respondents say they found either challenging or very challenging. Fifty-five percent say the same about choosing health care benefits.

Fifty-two percent said they found “maintaining health and wellness” challenging. If respondents are being completely honest with themselves (and the pollster), that figure would probably be much higher, considering that three-quarters of Americans are overweight or obese, and a certain percentage of those who aren’t still engage in unhealthy habits, such as problem drinking, substance abuse, or smoking.

One of the reasons health care is so expensive, many argue, is that for so long, Americans have been shielded from the true cost of care by generous employer-based insurance policies. As employers increasingly shift to high-deductible plans or consumer-driven health plans, millions of Americans are for the first time confronting decisions that in the past were left to higher-ups.

Alegeus CEO Steve Auerbach explained the shifting dynamics of health care shopping to BenefitsPRO.

“In the past, with health plans paying for the majority of health care costs, consumers have been conditioned to be disengaged,” he says. “This shift to consumer directed health care represents a complete paradigm shift in how consumers will need to manage their healthcare going forward — and there is a sizeable percentage of consumers who are resistant to this change. It is definitely going to take time for consumers to acclimate, build confidence, and rise to the occasion.”

He noted, however, that a similar “paradigm shift” took place with retirement benefits two decades ago, as many companies moved from defined-benefit pensions to 401(k)s.

“The infrastructure for education and support had to be built, and consumers had to adapt,” he says. “But now 401(k)s have become ubiquitous.”

See the original article here.


Craver, J. (2016, July 29). Workers overwhelmed by health care decisions [Web log post]. Retreived from

Rising Health Care Costs: Driving Factor Causing Changes to Employer Health Plans, SHRM Survey Finds

Get the latest trends in healthcare benefits in the survey conducted by SHRM.

Original Post from on July 13, 2016

Rising health care costs remain a primary driver for how other benefit costs are allocated, as employers continue evaluating the impact of the Affordable Care Act.
According to a new survey from the Society for Human Resource Management (SHRM), preferred provider organization (PPO) plans (offered by 84 percent of U.S. employers) continue to be the most common type of health care coverage. However, consumer-directed health care plans such as health savings accounts (HSAs) increased from 2012 and 2015, as did employer contributions to HSAs compared with 2012 (both by 7 percent).


Other health care findings:
  • Ninety-six percent of organizations offered some type of health care plan to their employees.
  • Mail order prescriptions have gone down by 6 percent over the past five years.
  • Eighty-five percent of organizations offer mental health coverage, compared to 91 percent just last year.
  • Organizations were evenly split as to whether they offered coverage to spouses who had access to health care coverage through another employer, or if there was a spousal surcharge for health care coverage.
  • Several new health-related items added to the survey this year: health care services such as diagnosis, treatment or prescriptions provided by photo or video (23 percent), high deductible health plan not linked to an HSA or a health reimbursement account (HRA) (17 percent), genetic testing coverage for diseases such as cancer (12 percent) and a smoking surcharge for health care plans (20 percent).


View the full survey online.


Read the full press release on this survey here.


Unknown (2016, July 13). Rising health care costs: Driving factor causing changes to employer health plans, SHRM survey finds [Web log post]. Retrieved from


Know the Difference Between HRAs, HSAs, and Health FSAs

Originally posted by United Benefits Advisor.

To understand which option is best for your particular situation, it's essential to know the differences between health reimbursement arrangements (HRAs), health savings accounts (HSAs) and health care flexible spending accounts (HFSAs).

Answers to the top questions about these account-based plans reveal many of the key differences, including contribution restrictions and tax treatment.

Who may legally participate?

  • HFSA: Any employee who is also eligible to participate in a group medical plan sponsored by the employer; retired employees are eligible if most participants are active employees.
  • HRA: Any employee who is covered by a group medical plan sponsored by the employer (or if the employer chooses, by the spouse's employer); retired employees are eligible (a retiree-only plan does not have to meet the medical coverage requirement).
  • HSA: Any employee who is covered by a high deductible health plan (HDHP), not covered by a plan that is not an HDHP, and not covered by any part of Medicare or eligible to be claimed as a tax dependent; individuals who are receiving Medicare may not contribute to an HSA.

May the employer impose additional eligibility requirements?

  • HFSA: Yes. The employer may design the plan to cover whom it wishes as long as it meets the non-discrimination requirements.
  • HRA: Yes. The employer may design the plan to cover whom it wishes as long as it meets the non-discrimination requirements.
  • HSA: An employer may not limit the ability of an eligible employee to contribute to an HSA, but the employer may limit its contributions to employees participating in the HSA designated by the employer.

May an employee contribute to the account?

  • HFSA: Yes, up to the lesser of $2,550 or the maximum set by the plan (any carryover does not apply toward the $2,550 cap).
  • HRA: No.
  • HSA: Yes, up to the total contribution limit ($3,350 in 2016 for self-only coverage and $6,750 in 2016 for family coverage); individuals age 55 or older may contribute an additional $1,000.

May an employer contribute to the account?

  • HFSA: Yes, up to two times the employee's contribution plus $500.
  • HRA: Yes.
  • HSA: Yes, up to the total contribution limit described above.

May another person or entity contribute to the account?

  • HFSA: No.
  • HRA: No.
  • HSA: Yes. Anyone may contribute to an HSA, up to the total contribution limit.

Does the spouse's coverage matter?

  • HFSA: No.
  • HRA: An employer may--but is not required to--integrate the HRA with coverage through the spouse's employer.
  • HSA: Yes. If the employee is covered by a non-HDHP through the spouse (which may include an HFSA or an HRA), the employee will not be eligible to contribute to an HSA.


For a comprehensive view of the differences between HRAs, HSAs and HFSAs, with comparisons for 25 additional questions, download "HRAs, HSAs, and Health FSAs--What's the Difference?"

Making Sense of the Alphabet Soup of Healthcare Spending Accounts

Original post

Employers are passing more and more healthcare responsibility to their employees, and in some cases, giving them a greater share of the financial burden. Likewise, businesses are looking for ways to help employees manage healthcare expenses. There are a number of products for that purpose, and while they’re similar, they’re not the same.

With acronyms being used to explain still-new concepts, it can be difficult for employees to understand the difference between them or even to remember which product they use. It’s important to educate them about these products so they get the most out of them.

Health savings account. A health savings account is like a 401(k) retirement account for qualified medical expenses. An HSA helps people pay for medical expenses before they hit their deductible. Employers and employees can both contribute money tax-free, and the money can be rolled over from year to year with only a maximum annual accrual. All contributed funds can be invested once a specific minimum is met (determined by the bank).

HSA-compatible health plans don’t include first-dollar coverage (except for preventive care), which means employees must meet a deductible before benefits will be paid by a health plan. This deductible is set by the IRS each year; in 2016, high-deductible health plans must have a deductible of at least $1,300 for an individual and $2,600 for a family.

Employees and employers can both contribute funds to build an HSA, and all funds count toward the annual maximum. The employee “owns” the HSA and the money that’s in it.

HSA funds can be spent on qualified medical expenses as outlined by section 213(d) of the IRS tax code, dental, vision, Medicare and long-term care premiums, and COBRA (if unemployed). After age 65, health premiums can also be withdrawn, but are subject to income tax.

Just like a 401(k), the account is portable. If the owner of the HSA changes jobs, the money can still be used for medical expenses, but the employee can no longer contribute to it.

Health reimbursement accounts. HRAs help employees pay for medical expenses before a deductible is met. But unlike an HSA, employees cannot contribute to an HRA, only employers. The money an employer places in an HRA can be used for medical expenses not covered by a health plan, such as deductibles and copays for qualified medical expenses as outlined by section 213(d) of the IRS tax code, dental, vision, Medicare and long-term care premiums. The associated health plan can have any deductible amount — there are no minimums and the plan does not have to be a high-deductible health plan. Unlike an HSA, an HRA is not portable, and funds can’t be used for non-medical reasons, even with a penalty. Funds also don’t typically earn interest and are not invested.

Employers must be more involved with HRA accounts since they are the only party who can deposit money; they also determine if funds can be rolled over from one year to the next.

Flexible spending accounts. FSAs allow employees to defer part of their income to pay for medical expenses tax free as part of a Section 125 cafeteria plan. Allowable expenses include those outlined by section 213(d) of the IRS tax code as well as dental and vision expenses. Both employers and employees can contribute to an FSA; however, the amount employees plan to contribute at the beginning of the year can’t be changed mid-year. FSA funds can’t be invested and fees associated with the plan are normally paid by the employer. There are no underlying plan restrictions and these accounts can be maintained alongside traditional health plans. The employer owns the account and is responsible for the management.

Funds in an FSA can be rolled over only if there is a carryover provision; in this case, $500 can be carried to the next year.

With an FSA, individuals must substantiate need for a reimbursement at the time of service by keeping receipts and filling out a form. Some FSAs include “smart” debit cards that automatically pay certain copays and don’t require documentation.

Determining which is best

HSAs, HRAs and FSAs serve slightly different purposes and can even co-exist in some circumstances. For example, those enrolled in an HSA can contribute to a limited-used FSA. Those enrolled in an HRA can also contribute to an FSA without limitations.

HSAs work well for employers who don’t want to add to administrative burdens or additional costs. And they’re a great way to give employees a way to offset the costs of qualified high-deductible health plans and save for post-retirement health expenses. However, employers may want to stray from an HSA or refrain from fully funding the account early in the year if there’s high turnover at a company; the money deposited goes with the employee when they leave.

For employees, HSAs provide investment opportunity and are portable; they also encourage consumerism and are cost-effective to administer. But one of the biggest advantages is that the employee doesn’t have to pre-determine expenses since unused funds carry over.

HRAs can work well for an employer that is not offering a qualified high-deductible health plan but wants to promote consumerism while self-funding a portion of the risk. The funds contributed are immediately available and completely funded by the employer, which is an advantage to the employee. However, there is no tax advantage to employees and the fund can’t be transferred.

FSAs are the most appropriate for employers offering traditional health plans. Employees benefit because they can contribute pre-tax dollars and the funds are immediately available. But the “use it or lose it” provision is a definite disadvantage for employees.

There are pros and cons to all three funds. It’s best to review them carefully to determine which ones will work for your business, and make sure to communicate the funds’ features and restrictions to your employees.

Do You Know The Way To HSA?

Originally posted by Patty Kujawa on January 28, 2015 on

With the rapid growth in high-deductible health plans, health savings accounts provide an option to pay medical bills and save for the future.

Corey Barnett is an avid saver, but doesn't like the idea of stashing his retirement reserves in one place.

That's why when he left his steady job to create a digital marketing company in February 2014, the 25-year-old rolled his 401(k) into an individual retirement account and specifically looked for a high-deductible health plan so he could continue using his health savings account as a way to pay for current medical bills as well as save and invest money for retiree health costs.

Barnett likes the HSA because he finds it tax-savvy and flexible; money goes in, grows and goes out tax-free for medical bills: He can use the money today if he gets sick or he can save it for tomorrow's retiree health bills.

Read full article here.

IRS Urged To Broaden Preventive Coverage In High-Deductible Plans

Originally posted May 9, 2014 by Julie Appleby on

High deductible health plans paired with tax-free savings accounts — increasingly common in job-based insurance and long a staple for those who buy their own coverage – pose financial difficulties for people with chronic health problems. That’s because they have to pay the annual deductible, which could be $1,250 or more, before most of their medications and other treatments are covered.

In a white paper released Thursday, researchers at the University of Michigan say such plans would be more attractive if the IRS broadened the kinds of preventive care insurers were allowed to cover before the patient paid the deductible. Currently, only a limited set of preventive care benefits is included.

“I want the deductibles removed on those things I beg my patients to do,” such as getting annual eye exams if they are diabetic, says author A. Mark Fendrick, a professor of medicine and director of the University of Michigan Center for Value-Based Insurance Design.

If insurers were allowed to offer high-deductible plans that covered “secondary prevention,” such as eye exams, or insulin for diabetics, they would attract 5 million buyers on the individual market, the report projects.  Many consumers would see the policies as an improvement over more “bare-bones” coverage, even if the premiums were higher, said co-author Steve Parente, a professor of finance at the Carlson School of Management at the University of Minnesota.  At least 10 million in job-based insurance might also switch, some of them from more expensive plans that have limited networks of doctors and hospitals, Parente said. Such plans would be most attractive to those with chronic conditions such as diabetes, asthma or high blood pressure.

“If it is attractive to the chronically ill, it could be a major change,” said Parente. The Gary and Mary West Health Policy Center, a nonpartisan research group in Washington, D.C, funded the report.

Still, such plans would carry premiums at least 5 percent higher than current high-deductible health saving account plans, according to the report.

Whether the IRS would consider changing the rules for high deductible plans connected with health savings accounts is unclear.  The agency did not respond to questions.  If it altered the rules, insurers would also have to choose to offer the plans.

Currently, more than 15 million Americans have high-deductible plans that can be paired with tax-free savings accounts, called HSA-eligible plans, according to America’s Health Insurance Plans, the industry trade group.  Of those, about 2 million buy their own policies and the rest get them through their jobs.

Under federal rules, such plans must have at least a $1,250 annual deductible for singles and a $2,500 deductible for families.  Workers can contribute money pre-tax to the special savings accounts to help pay those deductibles. Most large employers offer such a plan as an option and an estimated 15 percent of firms offer only HSA plans or a similar arrangement, called a health reimbursement account, according to the benefit firm Towers Watson.

IRS rules say only primary prevention can be fully covered by the plan outside of the deductible, including such things as routine prenatal and well-child care, some vaccines, and programs to help people lose weight or quit smoking. The rules say such preventive care does not generally include treatments for “existing illness, injury or condition.”

Fendrick and colleagues want the definition changed to allow insurers and employers more options, including allowing coverage of any kind of medical services, including drugs that would prevent complications from or a worsening of a chronic condition, such as diabetes, heart disease or major depression.

“This would be entirely optional for health plans,” Fendrick said. “One plan could [cover] just about everything before the deductible, and another might say they cover five or six drugs, some doctor visits and maybe glucose test strips.”

Help Employees Watch for Hidden Medical Fees

Source: United Benefit Advisors (UBA)

By Mary Drueke-Collins, FSA

As more and more Americans face high deductible health plans (HDHPs) and increased up-front out-of-pocket costs, it is more important than ever to closely monitor medical bills for errors. According to the Medical Billing Advocates of America, more than 80% of medical bills contain errors, which can cost patients thousands of dollars. Those errors may be simple mistakes, double billings, or in some cases, abusive charging practices.

One of the biggest problems for unforeseen fees is when an individual utilizes an out-of-network provider.

Most insurance plans – medical, dental, and vision – have preferred provider networks that help reduce the charges when an in-network doctor is used. If an individual does not use an in-network provider, he or she may be subject to “balance billing.” Here’s what occurs under a balance-billing situation:

  • The insurance company reimburses out-of-network doctors according to a schedule or a percentage of the usual and customary amount. Often times, the doctor’s charge is more than the reimbursement they receive from the insurance company. The doctor can then ask the individual to pay the balance, or the difference between what the insurance company reimburses them and their charges.
  • If an individual uses out-of-network providers, not only will he or she be responsible for the deductible, coinsurance and copayments, but he or she may also be responsible for this balance billing. Balance billing is common in medical, dental, and vision plans.

If an individual is covered by an HMO plan, he or she may not even have coverage for non-network doctors and hospitals. Before an appointment to see a doctor or have a procedure is done, make sure the doctor is in-network and the procedure(s) will be covered by the insurance plan.

Know The Benefits

Some medical plans have copayments for services – emergency room visits, inpatient hospital stays, certain kinds of surgeries. It’s a good idea to understand what benefits an individual’s insurance plans cover before he or she has a major service. Then there won’t be any surprises after the procedure.

Preventative Procedures

Most medical plans provide coverage for annual preventive exams, including pap smears, mammograms, and immunizations for children and adults. This coverage is usually provided without the individual having to pay anything – no copayments, not subject to deductible and coinsurance. Sometimes when the claim is sent to the insurance company from the doctor, the claim isn’t submitted correctly (as a preventive exam). In those instances, the individual has to pay a copayment or the cost of these claims.

If an appointment for a preventive exam is scheduled with a doctor and the insurance company does not pay for the exam like someone thinks it should be paid, then that person should call his or her insurance company and/or doctor and ask them why. This person should also check with his or her doctor before any blood work is completed to ensure the tests are all covered under the insurance plan.

Health Savings Accounts (HSAs)

If a business owner offers an HSA eligible plan to his or her employees, that person should consider going to a corporate bank and asking them to waive the fees for the employees on their Health Savings Accounts (an HSA eligible plan is also called a qualified High Deductible Health Plan). This is especially valuable if the employer is contributing to the HSA accounts and every employee is opening one.

The Explanation of Benefits (EOB)

Always check the doctor’s bill versus the Explanation of Benefits received from the insurance company. Make sure all of the charges line up and that the doctor actually performed all those services.

Shop Around

The cost of services in general can vary dramatically from doctor to doctor.  Most insurance plans offer cost and quality information on their websites. Most consumers shop around and do research when purchasing a TV or a new car, but they don’t take that extra step when it comes to their health. Insurance companies are providing more of that information. Consumers need to get in the habit of taking advantage of the information that’s available to them.


On the prescription drug side, medical plans may require an individual to pay a portion of the prescription drug costs if that particular drug has a generic alternative. When a prescription is filled at the pharmacy, it may not just cost someone the copayment, but the extra penalty for not selecting the generic. In some instances, that penalty will not apply if the prescription is written as “dispense as written” (DAW) by the doctor.

The insurance plan may require an individual to try some lower cost alternatives before it will pay for a higher-cost drug. This is called  “step therapy.” Or, the insurance plan may require an individual to get prior authorization (PA) before filing the prescription. A doctor or pharmacist should be able to help someone identify the drugs that fall into these scenarios.

If someone is on a very expensive drug or a drug that requires special administration or delivery (often called a specialty drug), the insurance plan may require that person to get the prescription filled through a particular pharmacy. If that person does not fill the prescription through the insurance company’s specialty pharmacy, he or she is often charged a penalty or the claim may be denied.


Employee communication is critical, and helping them understand how to save money by keeping an eye on their medical bills as well as how they use medical services could save an organization and their employees a lot of money.

To make sure your plan design offers the best value to you and your employees, have us benchmark your health plan against other employers your size and with those in your region and industry. Find out more about benchmarking here: