Living Well
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FSA Friday - 5/25/18 - Recharge over Memorial Day weekend

Admit it, as you read this, you're already watching the clock. It's Friday… the grill is clean… the lawn is mowed… All you need to do is ride out the work week, waiting for a well-deserved long weekend!

Whenever a holiday weekend comes, there's always a sense of relaxation. But is this a normal response? Or are we just working too hard? In this week's FSA Friday, we look at two articles that seem to indicate we're burning those candles a little harder than usual, both at home and in the workplace.

Half of Americans aren't taking a summer vacation. Here's why - Amanda Dixon, Bankrate

Since Memorial Day is considered the beginning of summer, some of you might be planning a vacation. But you might be in the minority these days. According to a new Bankrate survey, about half of Americans (49%) don't plan to take a vacation this summer. And 25% say it's because they can't afford it, due to a paycheck-to-paycheck lifestyle, and a lack of adequate savings.

This is an eye-opener because of how all age ranges are affected. The article claims that while older Americans are more likely to say they're not going on vacation this summer due to family obligations, millennials skip vacations because there's too much on their plates. But the one common thread is how these different groups often claim finances play a big role in avoiding necessary time away from work.

It seems like people are working as hard as ever, and are hesitant to take time off, even if they need a little rest. At least today's forward-thinking workplaces make it enjoyable to be there, right? Well, maybe not as enjoyable as some employers think.

4 Employee Benefits Better Than Ping-Pong Tables and Free Food - Heather R. Huhman, Entrepreneur

The idea of seeing an office with ping-pong tables, free snacks, collaborative workspaces and team outings isn't newsworthy in 2018. And these perks might not be as important to workers as they once were. While it's fun to have some workday distraction, these boosts have little impact on employees' lives when compared to more meaningful benefits.

In a January 2017 Society for Human Resource Management (SHRM) survey, 3,227 HR professionals indicated that 32% of their organizations were increasing the benefits they offer, to better compete for talent.

Some of the benefits named as important by the survey?

  • Health concierge services
  • Credit card rewards
  • Travel opportunities
  • Sleep assistance

No, that last one doesn't mean sleeping in the empty conference room at the end of the hall. But employers are beginning to see how proper sleep can benefit workers in and out of the office, and have given them access to sleep therapy (and even paid apps) to improve the quality of their workers' rest schedules.

Speaking of which, you're now 10 minutes closer to your long Memorial Day weekend. Be sure to make it a restful, enjoyable one.

FSA Friday is a weekly roundup of the latest topics, tips and headlines to keep you updated on all things flex spending. It appears every Friday, exclusively on the exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.

Taxes

FSA Friday with Sean - 1/26/18 - How the Cadillac Tax affects your healthcare

While this week's news centered around the government shutdown, the deal that ended it had an unexpected wrinkle that will affect consumer healthcare for the foreseeable future.

On Monday, President Trump signed a bill to fund the government for another three weeks. In this bill was a provision to delay the effective date of a targeted tax on high-cost, employer-sponsored health plans (the "Cadillac Tax") until 2022.

What's a "Cadillac" Tax?

Let's back up a bit. The Cadillac Tax was an attempt by the Affordable Care Act (ACA) to solve a tax subsidy issue that dates back to World War II called Employer Sponsored Insurance (ESI). The point of the Cadillac Tax was to address the impact of ESI, raise additional revenue to fund the Affordable Care Act, and encourage employers to go for more cost-effective healthcare options.

According to Forbes, ESI is a tax subsidy that was a result of wage freezes that took place during WWII, and ESI was a means for employers to use tax-free funds to cover the cost of generous health plans. However, as wages grew and ESI remained in place, this created long-term issues for the American healthcare system.

First, ESI only benefits those enrolled in employer-sponsored healthcare coverage, which accounts for about half of all Americans.

Furthermore, the ESI makes it cost-effective for employers to move more money into healthcare benefits rather than wage increases. In terms of compensation, it became cheaper for employers to provide additional healthcare benefits, as opposed to more pay.

So, the Cadillac Tax was created as a deterrent for employers who offer high-cost health plans, with the idea that more money would be available to cover uninsured individuals. This would make the most expensive plans - which some argued would lead to overuse/abuse of medical care benefits - to be less desirable to employers.

The ACA proposed an additional tax on high-cost health plans -- the "Cadillacs" of their industry. This tax adds 40% additional tax on the value of health insurance coverage they offer. This is determined by these thresholds: $10,200 for individual plans and $27,500 for families. In other words, this is the total cost of the healthcare plans, including vision and dental benefits.

The tax, which applies to health plans including FSAs, HSAs and HRAs, was originally set to begin in 2018 and had been delayed until 2022.

Why is the Cadillac Tax delayed?

While the Cadillac Tax seemed like a good idea on paper, Congress failed to implement the tax several times since the ACA passed. The main issue is that this tax is tied to general inflation -- which simply refers to the price of goods and services in an economy over time -- as opposed to medical inflation, which is roughly 2-3x lower.

Healthcare spending typically outpaces general inflation, so this could inevitably lead to a larger amount of healthcare plans being subject to the Cadillac Tax. Because of this, employers are already faced with tough decisions about whether to continue to provide the same standard of healthcare coverage, according to the Society for Human Resource Management.

Modern Healthcare reports that US employers have begun to implement healthcare changes if the Cadillac Tax ever goes into effect. A shift to high-deductible health plans (HDHPs) has been a leading trend with about 24% of workers in employer plans enrolled in a high-deductible option.

HDHPs are the only types of plans that are offer a health savings account (HSA) option, which could be contributing factor to their explosive growth. HSA enrollment has surged in 2017 to 21 million total accounts, a 16% increase year-over-year, according to research firm Devenir.

The Cadillac Tax has been a major sticking point in the world of consumer healthcare for years, and while it could see legislative changes in the future, this debate will most likely have to wait until its new implementation date in 2022.

If you're interested in diving deeper into this topic, you can read the full text of the bill to get a better idea of what it entails.

And of course, for the latest info about your health and financial wellness, be sure to follow our Learning Center, Facebook, Instagram and Twitter pages.

Basics

WATCH: How Open Enrollment Works


Find out why open enrollment is one of the most important dates on any working professional's calendar. Whether yours is weeks or months away, it's never too early to start planning your future health coverage options. To help streamline learning about your options, check out this helpful video from our friends at The SEBO Group:

We hope you find the answers you're looking for, and feel free to check out the rest of our resources on our Open Enrollment page.

Still have Open Enrollment Questions?

Tips for a stress-free open enrollment

By Jeremy Miller, Founder and President, FSAstore.com

Open enrollment can be a stressful time for both employees and benefits professionals. With an abundance of information to digest about available health plan options, spending accounts, and supplemental benefits, employees are often overwhelmed and confused because they lack the knowledge and understanding of the available options. Spending accounts continue to garner significant interest and questions from employees during open enrollment. And for good reason: with these tax-advantaged accounts, which includes flexible spending accounts (FSAs) and health savings accounts (HSAs), employees can save big when they make contributions and use the funds for qualified expenses.

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