26 Oct 2021
Open Enrollment Decisions: Using Health Savings Accounts
Controlling health care costs, especially the cost of coverage, is key to many consumer-employees in making open enrollment choices. Health savings accounts (HSAs) are used by individuals who choose high-deductible health plan (HDHP) coverage, allowing the employee to benefit from the tax-free treatment of contributions that can satisfy medical expenses, like deductibles and out-of-pocket medical expenses, incurred during and after employment. HSAs are available either from vendors individually or in connection with employment.
Related Content
- Health Reimbursement Account Design and Compliance
See how employers can assist in providing employees (and their dependents) with additional moneys to satisfy medical expenses, by establishing a compliant employer-sponsored health reimbursement account (HRA) benefit plan. HRAs are an increasingly common feature of employers’ benefits packages for both employees and retirees. But HRA status can interfere with an employee’s ability to contribute to an HSA. However, some HRA designs are compatible with HDHP/HSA coverage, like limited-purpose HRAs that provide dental or vision expenses only coverage, or are post-deductible HRAs, or retiree-only HRAs. - Cafeteria Plan Design and Compliance (IRC § 125)
Reference this practice note that discusses the design of cafeteria plans, now a staple of most employee benefits. With the cafeteria plan, most employers also offer their employees the choice of contributing to a flexible spending arrangement (FSA), either health-only or offering health and dependent care benefits. FSAs allow employees to pay the related unreimbursed costs using pre-tax dollars. If employers adopt the more-generous limits provided under the Consolidated Appropriations Act, 2021, as discussed in I.R.S. Notice 2021-15 and I.R.S. Notice 2021-26, in allowing carryover of unused benefits to 2022, be clear about those rules in reviewing employee communications. - Open Enrollment Periods for Health Insurance
See this practice note to review what’s important for open enrollment. While one of our recent newsletters focused on open enrollment, the clarity of open enrollment can be more difficult where more employees are working from home. Virtual meetings may take the place of in-person meetings where employees can learn of new benefits choices—including new premium costs. This practice note, along with its related content, can answer the questions employees may ask.
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- ERISA
DOL announces proposed rule that would eliminate requirements introduced under 2020 rule-making (see 85 Fed. Reg. 72,846 (Nov. 13, 2020) and 85 Fed. Reg. 81,658 (Dec. 16, 2020)) deemed to have a potential chilling effect on ERISA fiduciaries’ ability to consider environmental, social, and governance (ESG) factors in the selection of investments and exercise of shareholder rights, reversing the skeptical stance taken by the previous administration toward ESG investing. 86 Fed. Reg. 57,272 (Oct. 14, 2021); Regulatory Ping Pong: DOL Releases Proposed Rule on Considering ESG Factors in ERISA Plan Investing. - Health and Welfare Plans
IRS issues guidance regarding COBRA election and premium payment extended deadline rules under coronavirus relief (see 85 Fed. Reg. 26,351 (May 4, 2020) and EBSA Disaster Relief Notices 2020-01 and 2021-01) and providing special transition relief rule that establishes November 1, 2021, as the earliest date an applicable premium payment may become due. I.R.S. Notice 2021-58.
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