Benefits Buzz
The Internal Revenue Service (IRS) recently issued Rev. Proc. 2020-36 which includes details on the minimum required contribution percentage in determining whether employer-sponsored health coverage is affordable. In 2021, employer-sponsored health coverage will be considered affordable if an employee has to pay no more than 9.83% (an increase of 0.05% from 2020) of their income for such coverage.
Do you remember the days when employers could change from a $500 deductible plan to a $5,000 deductible plan and save 40-50% on insurance premiums? Then those same employers would offer a Health Reimbursement Arrangement (HRA) to cover most or all the deductible increase for employees who have chronic conditions or who experience unexpected medical events. The net result provided employers with significant savings while providing employees with substantially similar benefits. Those days still exist.
Small businesses often times find it hard to provide quality health insurance coverage to employees, especially during these unique times. Let’s face the reality! Health insurance usually comes with a high price tag, and small businesses may not be able to meet the contribution or participation requirements to provide a traditional group health plan to employees.
As healthcare costs continue to rise, consumers are becoming increasingly responsible for out-of-pocket expenses, regardless of their health plan type. By pairing every health plan with a consumer-driven account, your clients will not only save money but also provide their employees with a better way to manage their healthcare spending.
Premium Reimbursement Arrangements (PRAs) can generally be described as tax-free programs which are offered by employers to reimburse employees for health insurance coverage they obtain on their own. Below is a summary of the most common PRAs.
The Affordable Care Act (ACA) created a research institute known as the Patient-Centered Outcomes Research Institute (PCORI). The goal of PCORI is to help patients and those who care for them make better-informed decisions about healthcare choices. PCORI is funded in part by fees which are charged to health plans. The following information is designed to help employers understand their upcoming payment obligations.