January 3, 2023

Insurance Considerations as Americans Work Past Retirement Age

Americans are eligible to sign up for Medicare when they turn 65, but more of us are staying in the workforce longer than ever before. In fact, the average retirement age has increased three years in the last three decades.

There are a number of issues that Medicare-eligible workers face that your human resources staff may be asked about, such as:

  • Penalties for late Medicare enrollment,
  • Whether the employer plan is the primary or secondary payer of claims, and
  • How Medicare eligibility affects health savings accounts.

The following are considerations for employers faced with workers nearing 65.

Discontinuing group health coverage

If you plan to discontinue coverage for employees who are turning 65, you should communicate with them well ahead of the time they need to sign up for Medicare.

It’s important they understand that they will be dropped from your group health plan and that they have a seven-month window to sign up for Medicare (during the three months prior to the month they turn 65, the month they turn 65, and the three months after turning 65).

If they fail to sign up during this time, they will face a mandatory 10% penalty on all future Medicare Part B premiums for every year they are late in signing up.

Keeping them on the group plan

If you decide to keep them on the company’s plan, how you handle their insurance depends on your size:

Fewer than 20 employees — Employees who work for these firms will need to enroll in Medicare when they turn 65. Medicare will be the primary payer of health insurance claims for these workers under the law.

The group health insurance is the secondary payer.

How it works:

Let’s say your employee has foot surgery:

  • Medicare pays first up to the limits of its coverage.
  • The group health insurance only pays if there are costs Medicare didn’t cover.

20 or more employees — If your organization has with 20 or more workers, the group plan will be the primary coverage as long as they are actively employed. These employees can generally delay signing up for Medicare Part B. They will also not be subject to penalties for not signing up when they turn 65.

That said, workers who are still on your plan should sign up for Original Medicare Part A (hospital insurance) when they are first eligible. Medicare Part A, which is premium-free, provides secondary coverage of hospital expenses that may not be covered by your group plan.

Once they stop working and are no longer on the company’s health plan, your employees have eight months to sign up for Medicare Part B. They can at that time opt for Original Medicare, Medicare Advantage or a Medicare supplement plan.

If they fail to sign up for Medicare Part B after eight months of losing their employer coverage, they will be subject to a premium penalty for the rest of their lives.

Ideally, workers should enroll in Part B at least a month before they stop working or their coverage ends, so they don’t have a gap in coverage.

Health savings accounts

If your firm has fewer than 20 employees, workers who are 65 or older can no longer contribute to an HSA as they are not compatible with Medicare.

At larger organizations where the employer’s health plan is the primary coverage, employees enrolled in an HSA-compatible, high-deductible health plan can delay enrolling in Medicare and continue contributing funds to their HSA.

Employees who are 65 or older should stop making contributions to their HSA six months before they enroll in Medicare or before they apply for Social Security benefits if they are still working. That’s because people who apply for Social Security benefits are automatically enrolled in Medicare.

Those who fail to stop making HSA contributions in that period may face tax penalties.

May 13, 2022

IRS Sets Health Savings Account Maximums for 2023

The IRS has announced significantly higher health savings account contribution limits for 2023, with the amount increasing more than 5% for individual HSA plans.

The new limits were announced in conjunction with other changes, such as increases in the minimum deductibles and maximum out-of-pocket expenses for high-deductible health plans (HDHPs).

The IRS also announced rises in the maximum contribution amounts to excepted-benefit health reimbursement arrangements (HRAs).

The increases are much larger than usual due to inflation, which has been trending higher than it has in more than four decades.

Here are the new figures for 2023:

HSA annual contribution limit

  • Individual plan: $3,850, up from $3,650 in 2022
  • Family plan: $7,750, up from $7,300 in 2022

HDHP minimum annual deductible

  • Individual plan: $1,500, up from $1,400 in 2022
  • Family plan: $2,800, the same as in 2022

HDHP annual out-of-pocket maximum

  • Individual plan: $7,500, up from $7,050 in 2022
  • Family plan: $15,000, up from $14,100 in 2022

Maximum out of pocket for ACA-compliant plans (non-grandfathered plans)

  • Individual plan: $9,100, up from $8,750 in 2022
  • Family plan: $18,200, up from $17,400 in 2022

Excepted-benefit HRAs

Maximum annual employer contribution: $1,950, up from $1,800 in 2022. Excepted-benefit HRAs are limited to paying for vision and dental coverage or similar benefits exempt from the ACA, and are not covered by the employer’s primary group plan.

For those 55 or older: People who are 55 or older are allowed to contribute an additional $1,000 a year to their HSA, under federal law.

Also, if both spouses with family coverage are 55 or older, they must have two HSA accounts in separate names if they each want to contribute an additional $1,000 catch-up contribution.

If only one spouse is 55 or older but the younger spouse contributes the full family contribution limit to the HSA in his or her name, the older individual must open a separate account to make the additional $1,000 catch-up contribution.

HSAs explained

Under federal law, an HSA must be tied to an HDHP. An HSA is a special bank account that can be used to pay for or reimburse for your employees’ eligible health care costs. They can put money into their HSA through pre-tax payroll deduction, deposits or transfers.

As the amount grows over time, they can continue to save it or spend it on eligible expenses.

Employers can also contribute to the accounts, but the annual contribution maximum applies to all contributions in total (from the employee and the employer).

The money in the HSA belongs to the employee and is theirs to keep, even if they switch jobs. The funds roll over from year to year and can earn interest. Some plans also have investment options for the funds.

Here’s how they work:

  • Employees can make withdrawals with a debit card or check specific to the HSA.
  • Employees can use the money in their HSA to pay for care until they reach their deductible, out-of-pocket expenses like copays and coinsurance.
  • They can use the funds to pay for other eligible expenses not covered by their HDHP, like dental or vision care (eye exams and corrective lenses).

Planning ahead

Knowing what these limits are in advance can help employers plan their messaging for the 2023 open enrollment season.

If you want to get ahead of the ball, you can start updating your payroll and plan administration systems to reflect the 2023 amounts.

You should also include the new limits in relevant communications you send to your staff, particularly in regards to open enrollment, plan documents and summary plan descriptions for next year.

December 7, 2021

How to Coax Your Employees to Enroll in an HDHP

Employers looking for ways to decrease their group health insurance outlays over the past decade have been turning to high-deductible health plans as they offer lower up-front premiums.

In 2021, 51% of the U.S. workforce was enrolled in one of these plans, according to a recent survey by ValuePenguine.com.

But successfully coaxing your employees to choose an HDHP is not always easy. It means getting the deductible amounts right and educating them on how to best use these plans.

Also, while the plans are not for everyone, they can be a good fit for those who do not use their health plans much, are young and in good health. These employees may instead be overpaying for their premiums if they are not in an HDHP with an attached health savings account (HSA).

The key to encouraging your staff to adopt these plans is to first understand why some are reticent about them, how you can overcome their objections and how you can better tailor the plans for them. The following are the main reasons HDHP adoption may be lagging among covered workers.

Lack of education

One of the biggest hurdles to overcome is that many people are shocked to see the amount of the deductible, even as they save money on their premium. And on top of that sky-high deductible, they still have copays.

If you want employees that would be better suited for an HDHP to actually sign up for a plan, you need to take the extra time to:

  • Explain how HDHPs work and that there is a trade-off for high deductibles in exchange for lower up-front premiums.
  • Provide custom, side-by-side medical plan comparison tables and different medical usage scenarios to illustrate which types of individuals are best suited for an HDHP and which ones are not. (This would include scenarios of individuals who may be high health care users who may not be well suited for an HDHP.)
  • Explain how they can funnel what they save in premiums into an HSA so they can save their money for future medical expenses (more on HSAs later).

After covering all of the above, you should encourage your staff to pencil out the math to figure out which plan is right for themselves and their families. They can do this with the usage scenarios you provide. They may need assistance in doing this and you can encourage them to ask questions so they can make the best decision.

Too-high deductibles

For 2022, the maximum out-of-pocket deductible for an HSA-linked single HDHP is $7,050 and for a family plan the total deductible is $14,100. The minimum deductible for these plans is $1,400 for a single plan and $2,800 for a family plan.

While employees expect an HDHP to have a higher-deductible than a traditional plan, they can be shocked by a multi-thousand-dollar deductible. And many employers offer plans that are at the maximum end of the deductible spectrum.

You can work with us to model out multiple plan design scenarios that will help you save money on your group benefits bill while maximizing plan adoption. These models do a good job of explaining possible annual outlays and savings at different premium and deductible levels. 

You’re not contributing to their HSAs

Employers will often fund HSAs with a matching contribution up to a certain dollar amount, but that’s not required under law. As a result, many employers do not contribute to these accounts. But HSAs are critical to the success of HDHPs.

It’s often hard to impart the importance of an HSA and how it can benefit a worker years in the future. To generate interest, it’s a good idea for the employer to offer to contribute to the account if the employee sets up an account. Once an employer starts contributing, the likelihood of the employee starting to do so increases exponentially. 

When selling them on the benefits, explain that an HSA never expires. Your employees can keep them for life and let the funds grow in value through investments, and then put them to use when they are older or if they have health problems years later.

Additionally, they are funded with pre-tax earnings, and withdrawals are not taxed either.

Tell them this is essentially free money and that at some point this year or far in the future, they may need the money in the account to pay for medical services.

The takeaway

Helping your workforce understand how HDHPs (coupled with an HSA) can benefit them is the best way to encourage them to enroll.

You may not convince everyone that an HDHP is right for them, but if you get through to some of the ones who can benefit from an HDHP, they may share their experience with colleagues later.

June 8, 2021

2022 HSA Contribution Limits, HDHP Minimums, Maximums Set

The IRS has set the maximum amounts employees can funnel into their health savings accounts and health reimbursement accounts (HRAs) for the 2022 policy year.

The IRS updates these amounts every year to adjust for inflation in addition to minimum deductibles for high-deductible health plans, as well as the out-of-pocket maximums your employees are subject to. HSAs, which help employees save for medical expenses, are only available to employees enrolled in HDHPs. 

Here are the new figures for 2022:

HSA annual contribution limit

  • Individual plan: $3,650, up from $3,600 in 2021
  • Family plan: $7,300, up from $7,200 in 2021

HDHP minimum annual deductible

  • Individual plan: $1,400, the same as in 2021
  • Family plan: $2,800, the same as in 2021

HDHP annual out-of-pocket maximum

  • Individual plan: $7,050, up from $7,000 in 2021
  • Family plan: $14,100, up from $14,000 in 2021

Excepted benefit HRA

  • Maximum annual employer contribution: $1,800, the same as in 2021

Federal law requires health plan enrollees to use HSAs with HDHPs.

HSAs explained

An HSA is a special bank account for your employees’ eligible health care costs. They can put money into their HSA through pre-tax payroll deduction, deposits or transfers. As the amount grows over time, they can continue to save it or spend it on eligible expenses. 

Employers can also contribute to the accounts, but the annual contribution maximum applies to all contributions in total (from the employee and the employer). 

The money in the HSA belongs to the employee and is theirs to keep, even if they switch jobs. The funds roll over from year to year and can earn interest. Some plans also have investment options for the funds.

There are a number of benefits for employees who have HSAs:

  • The money an employee contributes to an HSA is not subject to income taxes.
  • If employees contribute through payroll deduction, the amount is taken from their pay before taxes are taken out, which reduces their overall taxable income.
  • They are not taxed on withdrawals, and HSAs even help reduce taxable income.
  • If employees contribute to their HSA with after-tax money, they can deduct their contributions during tax time on Form 1040.
  • Employees can tap the funds for any approved out-of-pocket medical expenses.

Here’s how they work:

  • Employees can make withdrawals with a debit card or check specific to the HSA.
  • Employees can use the money in their HSA to pay for care until they reach their deductible, out-of-pocket expenses like copays and coinsurance.
  • They can use the funds to pay for other eligible expenses not covered by their HDHP, like dental or vision care (eye exams and corrective lenses).
April 27, 2021

Put Money into an HSA instead of a 401(k) After Employer Matching: Report

One of the main recommendations for employees with 401(k) plans is that they should contribute at least enough to their plan every paycheck to ensure they receive the maximum they can in their employer’s matching contributions.

But a new study by Willis Towers Watson recommends that younger, healthier workers should divert savings to their health savings account from their 401(k) after capping out employer matching instead of continuing to put money into their retirement plan.

The report reasons that if they do this, they can get more bang for their buck when they use their HSAs to pay for future medical expenses.

That’s because HSAs can be kept for life and the money they’ve accumulated in them can be used to pay for medical expenses whenever they need them, including in retirement. And the moneys used in HSAs to pay for those expenses are not taxed when they are withdrawn, unlike 401(k)s, the funds of which are subject to federal income tax when withdrawn

The benefits of HSAs

With HSAs:

  • Pretax contributions, gains from investment, and withdrawals used for qualified medical expenses are exempt from federal and most state taxes.
  • Any unused balance is carried over to the next year.
  • Funds never expire.
  • Unused funds can be passed on to a beneficiary after death.
  • After turning 65, account holders can withdraw money for any purpose. However, if those funds are not use for a bona fide medical expense, they are taxed as income.

No other retirement savings vehicle has the same tax advantages as an HSA, so a dollar saved in an HSA can be worth significantly more than an unmatched dollar saved in a 401(k), according to Willis Towers Watson. Some employers will match a portion of workers’ HSA contributions or seed their accounts with money to encourage participation. 

That said, HSAs won’t outperform funds that are matched partly or fully by an employer, according to the report.

Willis Towers Watson said that those tax-free dollars and withdrawals can help pay for health care when we are likely to use it most: in retirement.

Men who retire at 65 with an average life expectancy of 85 would spend about $140,000 out of pocket for medical costs, and woman who retires at the same age and lives to 87 would spend an average of $159,000, according to the research.

The HSA pitch

HSAs can only be used in conjunction with a high-deductible health plan. When HSAs were first introduced, they did not have investment options for the money in the accounts, but as they have grown in popularity over the years, many HSAs now have evolved to essentially have the same investment choices as a 401(k).

HSAs have rules about how much of the balance can be invested. They will typically require that the first $1,000 in the account to be held in cash, and anything above that can be invested to help the funds grow over time.

In 2021, workers can contribute a maximum of $3,600 to their individual HSA account and $7,200 to a family coverage account.

If you are offering your workers high-deductible health plans with matching HSAs, and if you also provide a 401(k) and match part of the contributions, you may want to consider sharing this information with them to help them make informed choices on where to park their money for future use.

March 17, 2021

IRS Lets Employers Give Workers a Break on FSA Contributions, Health Plan Rules

New guidance from the Internal Revenue Service allows employers to temporarily give their employees extra benefits leeway in making changes to their flexible spending accounts (FSAs) and health savings accounts (HSAs).

The guidance, in response to the COVID-19 pandemic, also allows employees to make changes to their health plans outside of the traditional open enrollment period.

The COVID relief bill signed into law at the end of 2020 changed the tax law. The law ordinarily requires employees to make irrevocable plan choices before the first day of the plan year; later changes are normally permitted only under certain circumstances, such as a change in employee status.

However, 2020 was an abnormal year. For example, stay-at-home orders left employees with unused money in their dependent care FSAs because they unexpectedly did not have to pay for child daycare.

The temporary changes

Recognizing the current extraordinary situation, the new guidance makes several temporary changes:

  • Employers can permit employees to carry over unused funds from their 2020 FSAs to 2021, and from 2021 to 2022. Ordinarily, these accounts have a “use it or lose it” rule under which the employee forfeits unused funds at the end of the year.
    If an employee contributed $5,000 to a dependent care FSA in 2020 but used only $3,000 because he or she worked from home, they can now carry the remaining $2,000 forward for use in 2021.
  • Alternatively, employers can extend the grace period for employees to spend unused FSA funds. Normally, employees have two and a half months from the end of the plan year to spend the money on qualifying expenses. The temporary rules permit employers to give them up to 12 months to do it.
  • Employers can allow certain employees to use dependent care FSA funds for care of children up to age 14. The normal cut-off age is 13.
  • Employers may allow employees to change their future contributions to 2021 FSAs mid-year, something that is ordinarily prohibited.
  • Employers may also permit employees to make mid-year health plan changes. Employees who did not enroll in the employer’s health plan during open enrollment will be able to do so.
    Employees can change available plans, or they can drop coverage entirely if they can show that they have replacement coverage such as through a spouse’s employer.
  • If an employee changes from a high-deductible health plan to one with copayments or lower deductibles (or vice versa), employers can also permit them to switch mid-year between contributing to an HSA or an FSA. By law, an HSA must be coupled with an HDHP.
  • Lastly, they can allow employees who stop contributing to a health care FSA mid-year to receive reimbursements through the end of the plan year.

It is important to know that:

  • The law does not require employers to make these changes.
  • The changes expire for plan years starting in 2022 and later.

The pandemic has been difficult for employers and employees alike. These temporary changes will make it a little easier for both to cope.

April 13, 2020

IRS Allows HDHPs to Pay for COVID-19 Testing, Treatment Pre-Deductible

The IRS has issued new emergency guidance that allows insurers to waive the cost of coronavirus testing and treatment for individuals who are enrolled in high-deductible health plans (HDHPs).

Major health insurers report they’ve been concerned that if they can make the change to their high-deductible plans without breaching IRS regulations regarding such plans. 

Specifically, the new guidance states that HDHPs will not lose their plan status if they provide medical care services and items related to coronavirus testing or treatment even before an enrollee has met their deductible.

While the regulation does not require HDHPs to cover the testing and treatment without any out-of-pocket expenses by the enrollee, the plans can do so ― and without breaching the rules regarding these plans.

The new rule could also pave the way for non-HDHPs like PPOs and HMOs to also provide coronavirus testing without out-of-pocket costs for their participants. While there is no rule preventing them from doing so now, many of the country’s large PPOs and HMOs have been reluctant to start offering free testing until they know how HSA plans would be affected.

Typically, enrollees in HDHPs with an attached HSA are required to pay all of their medicinal costs up to their deductible before the insurer will pay. The Trump administration earlier issued another rule that allows HDHPs to foot the bill for certain preventative health services, such as vaccines and screenings for specific conditions like diabetes and high blood pressure before the deductible is met.

In notice 2020-15, the IRS says that “Due to the unprecedented public health emergency posed by COVID-19, and the need to eliminate potential administrative and financial barriers to testing for and treatment of COVID-19, a health plan that otherwise satisfies the requirements to be an HDHP under section 223(c)(2)(A) will not fail to be an HDHP merely because the health plan provides medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible.”

The notice only applies to coronavirus and does not void any other requirements governing HDHPs and HSAs. It states that “Individuals participating in HDHPs or any other type of health plan should consult their particular health plan regarding the health benefits for testing and treatment of COVID-19 provided by the plan, including the potential application of any deductible or cost-sharing.”

July 30, 2019

New Health Savings Account, HDHP limits for 2020

The IRS has announced new health savings account contribution maximums for the 2020 health insurance plan year.

Employees who have an HSA linked to a high-deductible health plan (HDHP) will be able to contribute to their HSA up to a certain level to help pay for health care and pharmaceutical expenses.

Funds going into your employees’ HSA accounts are deducted before taxes during each paycheck and the balance can be carried over from year to year.

Many HSAs also allow employees to invest the funds like they would with a 401(k). Because of this, HSAs have become a savings vehicle of sorts for people who are saving for health care expenses they are expecting in retirement.

HSAs can only be offered with an attached HDHP.

If you as an employer also contribute or partially match your employees’ contributions, they benefit even more, especially when compounding investment returns build up in the long term.

The IRS adjusts contribution limits for HSAs yearly based on inflation. For 2020, those limits will be:

  • $3,550 for individual coverage under an attached HDHP (up $50 from 2019).
  • $7,100 for family coverage (up $100 from 2019).

Also, remember that individuals who are 55 or older can make an additional $1,000 in catch-up contributions.

Besides the contribution maximum increasing, the deductible requirement for an attached HDHP will also climb for 2020:

  • For individual HDHPs, the deductible amount must be between $1,400 and $6,900. That’s compared with $1,350 and $6,750 in 2019.
  • For families, the range is $2,800 to $13,800. That’s up from $2,700 and $13,600 in 2019.

Long-term benefits

One of the best benefits from an HSA is the long-term advantage of being able to carry over balances year after year and let it build up for medical expenses in retirement. But, one of the key points that your employees should know is that if they use the funds in their HSAs for purposes other than qualified medical expenses, they have to pay a 20% penalty.

The website Investopedia recommends that your employees:

  • Max out their HSA contribution each year. If they do so, the amount they can save over the long term only grows through compounding.
  • Hold off on spending contributions now, and try to not use HSA funds for current medical expenses.
  • Make sure they only use the money for qualified medical expenses, so they don’t have to pay penalties of 20% plus regular income tax on their withdrawals.
  • Invest contributions for the long run. For example, if you’re currently invested in a mix of 80% stocks and 20% bonds, you should probably invest your HSA that way, too.
  • Use the account once they’re 65 or older. An added benefit to waiting until you’re at least 65 to spend your HSA balance is that the 20% penalty for withdrawing funds for purposes other than qualified medical expenses doesn’t apply. But, you will have to pay income tax if you don’t use the funds for qualified medical expenses.
April 17, 2019

HDHP Enrollees More Likely to Consider Costs and Quality

A new study has found that people enrolled in high-deductible health plans (HDHPs) actually are more likely to consider costs and quality when considering non-emergency care.

The 14th annual “Consumer Engagement in Health Care” study by the Employee Benefits Research Institute and market research firm Greenwald & Associates surveyed 2,100 adults, most of whom receive health coverage via their employers.

The survey found that people enrolled in health plans with a deductible of at least $1,350 for self only, and $2,700 for families, were more likely to take costs into account when making health care decisions.

Evidence of cost-conscious behavior:

  • 55% of HDHP enrollees said they checked whether their health plan would cover their care or medication prior to purchase, compared to 41% in traditional health plans.
  • 41% of HDHP enrollees said they checked the quality rating of a doctor or hospital before receiving care, compared to 33% of those in traditional plans.
  • 41% of HDHP enrollees asked for a generic drug instead of a brand name drug, compared to 32% of traditional plan enrollees.
  • 40% of HDHP enrollees talked to their doctor about prescription options and costs, compared to 29% of traditional plan participants.
  • 25% of HDHP enrollees used online cost-tracking tools provided by their health plans to manage their health expenses, compared to 14% of people in traditional plans.
  • HDHP enrollees also were more likely to take preventive measures to preserve health, including enrolling in wellness programs.

That said, the study did find some negative behavior among HDHP enrollees as well, including that 30% of HDHP enrollees said they had delayed health care in the past year because of costs, compared to 18% of traditional plan participants.

What you can do

In order to help HDHP enrollees get the most out of their plans, it’s recommended that their employers also offer health savings accounts.

This can help them pay for services that are not covered until they meet their deductible. Employers can help by matching (fully or in part) employees’ HSA contributions. This encourages them to participate.

Employers should also push preventative care. The Affordable Care Act requires all plans to cover a set of preventative care services outside of the plan deductible. Unfortunately, many people don’t know that these services must be covered by insurance with no out-of-pocket expenses for the enrollees.

Some employee benefits experts are recommending that employers tie the amount of premiums employees are required to contribute to how well they comply with preventative guidelines.

Non-enrollment in HSAs

These are the reasons employees cite for not enrolling in their company’s HSA:

  • Do not see any advantages: 57%
  • Do not have enough money to contribute to the account: 24%
  • Their employer doesn’t contribute to the account: 10%
  • Did not take the time to enroll: 8%
  • Do not understand what the HSA is for: 6%

The key to getting your staff to take advantage of the tax-savings feature of HSAs is education. You should make sure all of your eligible staff understand how they work.

And if you are not currently contributing some funds to their HSAs, now might be the time to consider doing that.

April 9, 2019

Helping Your Staff Get the Most from Their HSA Plans

As more employers adopt high-deductible health plans, which leave their employees with more “skin in the game,” it’s important that you educate them on how to get the most out of the attached health savings accounts.

Unfortunately, your employees may not be using the funds in their HSAs as efficiently as they should, and they could be leaving money on the table. One of the most common ways that happens is spending those funds on inappropriate care or misdiagnosed afflictions. It’s estimated that up to $1 trillion a year is spent on this type of erroneous care.

The nice thing about HSAs is that they have a threefold tax benefit:

  • Money goes into the accounts pre-tax,
  • The funds in the HSA grow tax-free, and
  • Funds are withdrawn tax-free if used for qualified medical expenses.

Also, funds in an HSA remain in the account. There is no use-it-or-lose-it provision and workers retain ownership of the account even if they switch employers. They also can be kept until retirement and, like an IRA, your staff can roll over or combine HSAs if they have more than one.

But it behooves your employees to learn how they may be squandering the funds they have put into their HSAs.

Examples of unnecessary care

  • Duplicate tests, because doctors don’t have access to a patient’s full medical records when they go to two or more treatment centers.
  • Overtreatment for common conditions such as back and joint pain, some types of cancer, and stable heart disease.
  • False positives from tests, leading to follow-up tests.
  • Replacement of less costly gold-standard medications and treatments with new and more expensive alternatives that may not yield better results.
  • Care that was delivered on the insistence of a patient when it was not needed or medically appropriate.

Tools for corraling health spending

Fortunately, there are means available to help your employees better decide how to spend their HSA funds.

First and foremost, the majority of medical expenses, like office visits, are reimbursable and the employee should tap the HSA whenever they incur a copay, deductible or outlays for medicine.

Shopping around – If they are told they need a procedure, they can take matters into their own hands and shop around for the procedure among the available treatment facilities in the group network. Doing this can save thousands of dollars.

Second opinions – Getting a second opinion is important, particularly after:

  • Receiving a diagnosis of a serious or complex health problem,
  • A doctor recommends elective surgery, or
  • If the diagnosis is not clear.

Fortunately, many group plans have second-opinion programs as stand-alone services or included as part of an advisory or vendor management program, and through medical centers of excellence.

Objective, evidence-based research – Supplying employees with evidence-based information on treatment options, presented in plain English, can help them understand their options, make more informed decisions, and avoid inappropriate testing and treatment.

It’s also helpful if this resource includes the option to speak with someone via phone or web chat who can answer questions about the information and suggest additional resources.

Referrals to experienced health care providers– Accurate diagnosis begins with connecting employees with the right physicians. The ability to connect workers with physicians who have proven experience and expertise in treating the condition that they’ve been diagnosed with can lower the risk of misdiagnosis and inappropriate treatment.