To help combat the rising cost of healthcare, the trend of “Consumer Driven Heal

Question

To help combat the rising cost of healthcare, the trend of “Consumer Driven Healthcare” started in the early 2000’s. In short, it is a way to put some of the burden of the healthcare cost on the employee in hopes they will become better educated and make better choices with their healthcare – through better habits, using generic instead of brand name drugs, shopping doctors, trying physical therapy rather than surgery, etc. Here is an article that discusses consumer driven health care a bit more. http://online.wsj.com/ad/employeebenefits-consumer_driven_plans.html

What is the difference between a Health Reimbursement Account (HRA), a Health Savings Account (HAS) and a Flexible Spending Account (FSA) and how do these help control costs?

How can selecting a high-deductible medical plan help controls costs for employers – and what is the downside of these plans?

How do HMO’s control costs over PPO medical plans?

Should employers be sponsoring employee wellness plans (health challenges, gym memberships, etc.)? Why or why not?

Explanation / Answer

1.Differance between HSA/FSA/HRA

1.Get tax consession

2.If the employee is terminated, quits, or is unable to return to work, he or she does not have to repay the money to the employer.

3.The employee contributes to the FSA in small increments throughout the year (for example, 1/26 of the annual amount if one is paid every two weeks), but taken together, all employees of a company contribute the full average amount during any given period, and no real risk is incurred by the employer

2.How can selecting a high-deductible medical plan help controls costs for employers – and what is the downside of these plans?

Save money on premiums. This is probably a high-deductible plan's biggest advantage in today's pricey health insurance marketplace.

Ability to manage your own care costs. "This approach can save you money," For example, healthy adults who don't use much health care may be overpaying in traditional insurance plans.

The real downside is that with these plans has shown that people hesitate to go to a doctor.

But if you get seriously sick, you'll be socked with high deductibles

3.How do HMO’s control costs over PPO medical plans?

following reason control the cost HMO over PPO
HMO’s tend to provide better cost sharing value, but either can have lower premiums based on plan and region. Given the sheer number of factors concerned there is no clear option for what will be cheaper. So much is based on the specifics of your needs and what the plan offers.

4.Should employers be sponsoring employee wellness plans (health challenges, gym memberships, etc.)? Why or why not?

Yes, Definately employer should sponser the wellness program

Nowdays workplace wellness programs are becoming more widespread throughout industries.By doing this get reult like healthy employees tend to be happier and more productive employees.

Company with this ca get strategic advantages by investing money in a program that will hopefully bring them lowered expenses in return, often in the form of better performing workers, and lower absenteeism and health care costs. Employees are the most valuable assets to any company. By providing workers with these services, companies are improving wellbeing and job satisfaction, as well as raising retention rates. The welfare of employees has a direct impact on the success of the company.

Point HSA FSA HRA What is it? It’s a personal bank account to help you save and pay for covered health care services and qualified medical expenses. It’s an account to help you pay for covered health care services and eligible medical expenses. It’s an account to help you pay for covered health care services and eligible medical expenses. How to get it? You have to sign up for a highdeductible health plan that meets a deductible amount set by the IRS. You also have to meet other IRS guidelines to be eligible to have it. You can learn about these at irs.gov. You can sign up for a health care FSA if it is offered by your employer. You do not need to sign up for a health plan It is usually connected to a health plan. If your employer offers this type of plan, you will get it when you sign up for the plan. It’s not common to have an HRA without a health plan. Owner You do. Your employer, but it’s your money Your employer Money Input You. Your employer, family, and others can put money into it if they choose. You. Your employer can also put money into it if they choose. Only your employer. You can’t put your own money into it. any another account to link Yes. You can have a limited-purpose FSA or limited-purpose HRA, which can only be used for eligible dental and vision services. Yes. You can have an HRA or a dependent care FSA. You can use a dependent care FSA to pay for eligible day care and elder care services. Yes. You can have a health care FSA and dependent care FSA. Uses other than health No, as long as you are under the age of 65. And if you use it for services that aren’t qualified medical expenses, you could pay a 20% penalty tax. If you are over the age of 65, you can use it for pretty much anything. No No Money Limit Yes. The Goverment sets a limit on how much you can put into it each year. You can usually find the limits in your health plan documents and at irs.gov. While there are annual limits, there is no limit to how much you can save over time. Yes. The industrial Regulation sets a limit on how much you can put into it each year. You can usually find the limits in your health plan documents and at irs.gov. Your employer can decide what the annual limit will be but it can’t be more than the IRS limit. No. There are no limits for you because you can’t put your own money into an HRA. Encashment Yes. But if you cash it out and do not use the money for qualified medical expenses, you will have to pay taxes on it. And you may also have to pay a 20% tax penalty. no No Validity Yes. You own the account. . No. Your employer keeps the money No. Your employer keeps the money Tax on it No No No Starting for Spending You can start spending the HSA once you have signed up for a high-deductible health plan and have opened the account. . You can start spending the FSA on the first day of the plan year. In most cases, you can start spending the HRA on the first day of the plan year. Your employer can also set rules on when you can use the money

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