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.

Eligibility

5 smartphone compatible items for parents

Ever wonder about FSA eligible products that also hook up to your smartphone? Let's explore 5 smartphone compatible items for parents from FSAstore.com

As a parent, you want what's best for everyone in the family. Of course, that also aligns with healthcare and making sure everyone is healthy. Nowadays, many people are connected to their smartphones, and that means health apps and smartphone compatible items are quickly picking up. With a Flexible Spending Account or FSA, you'll be able to monitor your and your family's health with smartphone compatible items.

Here are 5 Smartphone Compatible Items for Parents

1)The Kinsa Smartphone Thermometer. This smartphone compatible item will easily give you quick (10 seconds!) and accurate temperature readings. Not only that, but it'll let you track each family member's health and share vitals with your doctor. The thermometer can be used orally, under the arms or rectally. You can download the free app for iOS and Android.

Shop for Kinsa Smartphone Thermometer at FSAstore.com

View the video from Kinsa to learn more!

2) The TempTraq Baby Bluetooth Thermometer. This wearable Bluetooth thermometer continuously monitors baby's body temperature. It not does monitors temperature, but also provides alerts so parents can stay abreast of baby's fever. This single use, 24-hour comfortable patch can be placed under baby's arm. It senses, records and transmits temperature information to a smartphone compatible device. Parents can easily monitor baby's temperature up to 40 feet away. You even email temperature data to a doctor or family member.

Shop for TempTraq Baby Bluetooth Thermometer at FSAstore.com

3) Vicks SmartTemp Wireless Smartphone Thermometer. With this thermometer, it's easy to take and track temperature readings for the entire family, and wirelessly connect to your smartphone. This thermometer allows you to individually track and store readings for each family member, and it can even send reminders about the last reading time + medicine dosage, as well. A convenient Symptom Tracker will record symptoms and a Fever InSight feature will change the phone screen from red to yellow to green depending on the temperature readings. This thermometer gets an 8-second reading and can be applied orally, rectally or under the arm. It is compatible with most iOS and Android devices, and has a free downloadable app.

Shop for the Vicks SmartTemp Wireless Smartphone Thermometer at FSAstore.com

4) Medela. New parents looking for products to help with breastfeeding and applicable accessories can shop for popular brand, Medela, with a Flexible Spending Account. Medela offers a convenient app where new moms can track their breastfeeding progress.

Shop for Medela at FSAstore.com or learn more about the Medela app

5) Want a variety of Hi-Tech Health items? Shop the FSAstore.com Hi-Tech Health bundle.

The bundle contains an AccuRelief Wireless Remote Control TENS unit, a Withings Wireless Blood Pressure Monitor, a Quell Wearable Pain Relief Starter Kit, a Vicks SmartTemp Wireless Smartphone Thermometer, and a DPL Flex Wrap Pain Relief System.

Accounts

What's new for consumer-directed healthcare accounts in 2016?

What does 2016 have in store for consumer-directed healthcare accounts? Each year, the IRS releases information about these accounts.

learn about consumer-directed healthcare account changes

What does 2016 have in store for consumer-directed healthcare accounts? And, what exactly are these accounts? Each year, the Internal Revenue Service (IRS) releases its long-awaited consumer-directed healthcare account changes. The IRS provides an update as to whether these accounts will have different contribution limits or if there are other plan changes. Whether you have a flexible spending account (FSA) or a health savings account (HSA), these accounts are typically adjusted for inflation annually with a series of changes for the coming year.

Beloware the current regulations of each of these accounts. Learn more about the most popular consumer-directed healthcare accounts:

Flexible Spending Accounts (FSAs) (Medical)

Changes for 2016: None

Contribution Limits: $2,550 per FSA account.

Note: If anindividual and his/her spouse each have his/her own FSA, they could be setting aside $5,100 as a household.

Health Savings Accounts (HSAs)

Changes for 2016: No change in individual contribution limit, +$100 for families

High-Deductible Health Plan (HDHP) Maximum Out-of-Pocket Amounts: Individuals +$100 and +$200 for families

Contribution Limits (Employer + Employee): Individuals - $3,350, Married Couples Filing Jointly - $6,750

HSA Catch-Up Contributions (age 55 or older)*: $1,000

HDHP Minimum Deductibles: Individuals - $1,300, Family: $2,600

HDHP Maximum Out-of-Pocket Deductibles: Individual - $6,550, Family: $13,100

Health Reimbursement Accounts (HRAs)

Changes for 2016: No Changes

Contribution Limits: No Limit, Controlled by Employer

Limited Care Flexible Spending Accounts (LCFSAs)

Changes for 2016: No changes

Contribution Limits: $2,550 per FSA account. If individual and spouse each have their own FSA, could be $5,100 as a household.

For HSA-compatible LCFSA, can only be used for eligible non-medical vision or dental expenses throughout the plan year.

Dependent Care Flexible Spending Accounts (DCFSAs)

Changes for 2016: No changes

Contribution Limits: $5,000 per household, or $2,500 if married and filing separately.

As 2016 kicks off, be sure to meet with your benefits administrator to stay on top of your healthcare benefits, and spend your hard-earned dollars at FSAstore.com! If you'd like to learn more about FSAs, HSAs or HRAs, browse our comprehensive Eligibility List or Learning Center for answers to popular questions and to see details about eligible expenses.We have the web's largest selection of FSA eligible products to help you support the health and wellness of you and your dependents year-round.

Eligibility

Gynecology: What's FSA eligible?

Is gynecology an FSA eligible expense? What's covered by the FSA? Learn more in this blog post, and use your FSA for medical care.

Annual exams to the gynecologist are essential for women to main good productive and sexual health. Did you know?The cost of gynecological care is an eligible medical expense with your Flexible Spending Account (FSA), so you can use your account for treatment. Discover other covered expenses by searching our FSA Eligibility List, or check in with your FSA administrator about specific medical care.

Timelines and Numbers to get Right for a Gynecology visit:

Begin seeing a gynecologist at the age of 21, or earlier if you become sexually active.

After a first visit, women ages 21 to 29 should visit their gynecologist annually to get a Pap smear. A pap smear is a screening test for cervical cancer, eligible for reimbursement with a Flexible Spending Account.

Women ages of 30 to 64 should generally visit every other year.

In addition to regular checkups, you should seek a consultation or treatment for:

  • Irregular periods
  • Sexually transmitted infections (STIs)
  • Vaginal infections.
  • Contraceptive method

How to Prepare for a Gynecologist Exam

  1. Make appointments between menstrual periods as menstrual fluid can interfere with both examination and lab tests.
  2. Do not have intercourse or insert anything into the vagina 24 hours before the visit.
  3. Prepare a list of questions and concerns to ask your gynecologist, including any details regarding vaginal bleeding, discharge, odor, or pain.
  4. Your gynecologist will ask you question about your menstrual cycle, so it would be good to know the date of your last period and how long your periods typically last.

What to Expect at the Exam

  1. A nurse will first take down basic measurements not unlike a regular physical examination.
  2. Before the physical exam begins, your doctor may ask questions about your personal and family medical history, sexual history, contraceptive usage, general health and lifestyle, etc.
  3. For the physical exam, you will be asked undress in private and put on a paper or cloth gown given to you.
  4. You probably won't get an internal pelvic exam where the doctor looks inside your vagina. Instead, he or she will examine your outside genital area and your breasts. The doctor might press on different parts of your breast to feel for lumps indicative of breast cancer.

Learn more via http://www.soc.ucsb.edu/sexinfo/article/annual-gynecological-exams-what-expect