What is a Health Savings Account?
WHAT IS A HEALTH SAVINGS ACCOUNT?
A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year to year if not spent. HSAs are owned by the individual, which differentiates them from company-owned Health Reimbursement Arrangements (HRA) that are an alternate tax-deductible source of funds paired with either HDHPs or standard health plans. HSA funds may currently be used to pay for qualified medical expenses at any time without federal tax liability or penalty. Beginning in early 2011 OTC (over the counter) medications cannot be paid with HSA dollars without a doctor’s prescription. Withdrawals for non-medical expenses are treated very similarly to those in an individual retirement account (IRA) in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. These accounts are a component of consumer-driven health care.
Promoters of HSAs
Proponents of HSAs believe that they are an important reform that will help reduce the growth of health care costs and increase the efficiency of the health care system. According to proponents, HSAs encourage saving for future health care expenses, allow the patient to receive needed care without a gatekeeper to determine what benefits are allowed, and make consumers more responsible for their own health care choices through the required High-Deductible Health Plan.
Arguments of HSAs
Opponents of HSAs say they may worsen, rather than improve, the U.S. health system’s problems because people may hold back the healthcare spending that would be covered by their Health Savings Accounts, or may spend it unnecessarily just because it has accumulated and to avoid the penalty taxes for withdrawing it, while people who have health problems that have predictable annual costs will avoid HSAs in order to have those costs paid by insurance. There is also debate about consumer satisfaction with these plans.
Increased use of HSAs
Data released in 2012 indicate that the use of HSAs is increasing. AHIP reported in May 2012 that the number of people covered by an HSA-eligible HDHP more than doubled between January 2008 to January 2012 (going from 6.1 million to 13.5 million). The split between group and individual plans was 11 million vs. 2.5 million, and the gender distribution of HSAs between male and female enrollees was an even 50%. Among individual plan holders, 51% were under age 40 and 49% were age 40 or over. The top five states with HSA/HDHP enrollment were California (1 million), Texas (0.76 million), Illinois (0.72 million), Ohio (0.66 million), and Florida (0.54 million). Also, a survey released in February 2012 by J. P. Morgan Chase of the 900,000 HSAs that it manages indicates that contributions to HSAs have been steadily increasing. Between 2009 and 2011, the average Chase HSA balance rose by 11% annually, and the average employee contributions increased by 7% in 2011. Also, in 2011, 42% more dollars were transferred from HSA cash into HSA investment accounts than were transferred out.
According to 2015 midyear research conducted by Devenir, an estimated $28.4 billion is held in HSA accounts amongst 14.5 million HSA accounts
Consumers play a key role in all aspects of healthcare delivery because good health doesn’t just happen on its own. Taking an active role in your health is the best way to prevent disease, get great care, and reduce costs at the same time. A smart healthcare consumer doesn’t just ask the right questions of their doctor, but knows it’s also about prevention, self-care, and knowing where to find resources. By being a smart healthcare consumer you can make good decisions that will have a positive impact on your physical and financial health.
Ponying up for name brands buys higher quality in many cases, however when it comes to medications, generic drugs are the cheaper option that does the same job as the one that breaks the bank.
Generic drugs have the same active ingredients, strength, and quality as the name-brand versions. In fact, non-commercial meds must meet the same rigorous FDA standards as their well-promoted counterparts--differing no more than batches of big name drugs produced in separate factories.
So then why did a different Brigham and Women’s study find that nearly half of doctors surveyed admitted to having negative perceptions about the quality of generic pills?
Virtual Benefits Administrator (VBA) is a pro-active, leading edge software design company providing custom solutions to the insurance industry for nearly 20 years. Uniquely delivered on a secure, cloud-based architecture, VBA provides one-common-architecture for all Employee Benefit Administration. Our software development process focuses on continuous improvement to address the requirements in the ever-changing healthcare industry. This empowers our clients to focus on business strategy and growth while streamlining their operations.
VBA is designed to allow you to administer any line of business using unlimited flexibility and robust functionality utilizing the latest in cloud-based technology. VBA’s motto is continuous improvement and we’re constantly improving VBA. Users and members all play an important part in that continuous improvement process through our SCRUM development methodology. You will benefit from those improvements into the future because you will always be using the best system available.
Flexibility is the hallmark of our system. VBA’s architecture provides flexibility that empowers users with the ability to make changes and adjustments to respond to market demands easily and efficiently.
VBA’s Functionality is comprehensive and user friendly. Users can navigate quickly and easily throughout the system to get all of the information they need in a matter of seconds. This translates into time savings and improved customer service.
VBA Technology is leading edge and takes advantage of the efficiency and scalability of Smart Client Technology and Offline Adjudication.
VBA’s Medical application maintains both professional and institutional claim types with all required information. VBA incorporates thousands of built-in edits to verify and validate data in regards to eligibility, coordination of benefits, individual and family limitations, plan maximums, standard and custom benefit definitions, and accumulator data for current plan year and history plan years. A myriad of pricing capabilities include: FFS, Per-Diem, DRG, Custom Provider Rate, Adjusted Discount, and General Discount.
VBA easily administers medical claims ranging from Medicare to Medicaid to Commercial brands using complex or simple plans defined through the Plan/Benefit Module.
VBA’s Dental module maintains cost containment edits flexible enough to process all CDT Dental code requirements. VBA allows you the ability to track tooth activity on enrollment records with full tooth charts for both primary and permanent teeth. Users can easily identify crowns, bridges, and extractions to improve customer service while automatically impacting claims payment. VBA’s auto-adjudication allows for customized rules through plan setup with maximums by arch, quadrant, or a defined set of teeth within a defined set of dental procedures.
Life & Disability
VBA’s Life & Disability module provides for easy administration of Short-Term Disability, Long-Term Disability, AD&D, Supplemental Life, Voluntary Life, Living Benefit, and more. VBA can fully administer any form of disability benefit and allows for benefit definitions by salary percentage or flat rate while applying all the appropriate taxes. Our Disability Payment Creator takes all disability information and determines the appropriate payment structure accounting for waiting period, salary continuation, sick pay and more. All payments are created in advance and the VBA Repetitive Pay process will assure you do not miss a payment to your members. Our Life Payment Creator takes all life claim information and determines the appropriate payment structure based on beneficiary split and benefit volume.
FSA - HRA - HSA
VBA’s FSA-HRA-HSA module provides for an extremely flexible approach to managing pre-tax Section 125 Cafeteria, Section 129 Dependent Care Assistance and Section 132 Qualified Transit Plans. VBA allows members to have multiple plan accounts at one time with reimbursements paid from the appropriate account. You can track all aspects of a Flex Plan including submission periods, grace periods, employee/employer contributions, minimum and maximum elections, and balances. VBA administers all lines of business on a single platform which allows for automatic creation of flex payments based on member responsibility received on medical, dental or RX claims.
VBA’s PBM Administration module provides for tracking of all incoming pharmacy information (EDI or otherwise) including Drug Code, Prescription Date, Fill Date, Quantity, Prescription Number, Refill/Generic Indicators as well as member responsibility and the actual prescription amounts. You can build specific benefits using the Dynamic Plan and Benefit Module allowing for user-defined restrictions (such as experimental drugs) or pricing modifications to monitor and manage member responsibility.
VBA’s Reinsurance module provides for reinsurer/stop-loss tracking at the policy level with a great deal of flexibility, including stop loss tracking and reporting at the member level. VBA allows all information specific to each stop-loss contract – contract length, lasers, coverage exclusions based on benefit and procedure codes – to be held at the Group, Division or Subscriber level. Easily create aggregate reports, stop loss notifications, receivable tracking information, and claim details using a comprehensive reporting interface that leverages our industry-leading claims framework.
With the VBA Premium Billing module you can construct dynamic rate structures and generate invoices at the Group, Division, or Employee level. Billing is processed a variety of ways including Tier, Age/Sex, and Adult/Child allowing for dynamic invoicing between Divisions within a Group or even down to the Plan within a division. Streamlined rate setup allows you to quickly modify existing rates, copy rates, or add new rates utilizing a template-based approach for simplicity. Individual billing allows for premium processing at an individual level which is independent of defined rates at the Employer Group or Division Level. With VBA, invoices are automatically retro-adjusted when enrollment information or existing rate is changed assuring the accuracy of subsequent invoices.
Utilize the VBA commission module to simplify the agent/agency payment process. The VBA commission module has the ability to generate commissions based on PEPM, PMPM, percent of premiums billed or percent of premiums received as defined at the Group, Division or Plan level. VBA has the flexibility to pay commissions to any number of agents as well as the ability to set the percentage split on commissions paid by user-defined entries. Each split can be tiered such that any payment hierarchy can be accommodated. You can define any number of agents per agency or independent agents and provide specific information such as EO Coverage Name, EO Coverage level and much more.
.... AND MORE
We offer updated technology, including a Gateway for stress-free enrollments.
We also offer Bennie cards, for your Flex spending needs. The advantages of the Bennie card are:
~ Cashless transactions - instead of paying for eligible expenses and waiting to be reimbursed, the debit card pays the expense directly from your Medical or Dependent Care Account.
~Some debit card transactions may require receipt verification
The portion of eligible expenses that plan members are responsible for paying, most often after reaching a deductible. An example of coinsurance could be that your health plan covers 70% of covered medical charges and you are responsible for the remaining 30 percent.
The amount that you must pay for (certain) covered services. Your copayment is usually a fixed dollar amount.
Services or supplies for which your health plan will pay (or “cover”) all or a portion of the cost. Most health plans do not cover all services and supplies, and it is important to be aware of any limitations and restrictions that apply to your covered services.
The amount that you must pay before benefits are provided for (certain) covered services.
Specific conditions or circumstances for which a health plan will not provide benefits.
Medically Necessary Services
Services or supplies which are appropriate and necessary for the symptoms, diagnosis, or treatment of a medical condition, and which meet additional guidelines pertaining to necessary provision of medical or mental health care. Services must be medically necessary in order to be covered.
A group of physicians, hospitals, and other health care providers who participate in a specific network arrangement plan. When you receive care from an in-network provider, you pay only a copayment and/or coinsurance for covered services. These providers have contracted with the network for preferred pricing on services in most instances.
Physicians, hospitals, and other health care providers who do not participate in your plan’s network. Services obtained from an out-of-network provider are subject to deductibles and coinsurance.
When the deductible and coinsurance amounts you have paid in a plan year add up to the out-of-pocket maximum, the health plan will begin covering 100% of eligible charges for the remainder of the year.
The time period your health plan provides coverage; it can be a calendar year or off the calendar year and encompasses a twelve month period.
Preferred Provider Organization (PPO)
A type of insurance product that combines in-network and out-of-network coverage. When you use in-network (or “participating”) physicians and hospitals, you pay only your copayment and/or coinsurance for covered services. You also have the flexibility to see out-of-network (“non-participating”) providers, but you will most likely be responsible for a higher deductible and coinsurance for inpatient and outpatient covered services.
A pre-existing condition is a health condition that existed prior to your application for a health insurance policy or enrollment on a new health plan. Examples of pre-existing conditions include pregnancy, heart disease, high blood pressure, cancer, diabetes, and asthma. The passage of the Affordable Care Act (ACA) prohibits imposing any pre-existing condition clauses or exclusions on a health plan.
Usual and Customary Fee/Allowed Amount
The common cost of a specific medical service; this fee can be lower than what a physician charges and is based on a variety of criteria including provider type and service region.
The Consolidated Omnibus Budget Reconciliation Act of 1985 gives employees and their families the right to extend their group coverage (medical, dental, vision and Flex) for a limited time period following termination of employment, reduced hours, death, and divorce.
Coverage is retroactive back to the qualifying event date, and participants are entitled to the same rights as active employees under the Plan.
Monthly premium payments are sent to EBS, and not the former employer.
Continuation coverage continues until the end of the maximum time period, usually 18 – 36 months, or for any of the following: nonpayment of premiums, fraud, eligible for other coverage, eligible for Medicare, or the employer ceases to provide any group health plans.
Flexible spending accounts, or FSAs, provide you with an important tax advantage that can help you pay health care and dependent care expenses on a pretax basis. By anticipating your family’s health care and dependent care costs for the next plan year, you can lower your taxable income. Read more...
• The convenient Benny® Prepaid Benefits Card to eliminate the need to pay with cash
• An easy-to-use online Consumer Portal to allow secure, 24/7 access to your accounts
• A handy Mobile Application to access accounts securely through your smartphone