Good Neighbor Insurance (dev.gninsurance.com and www.gninsurance.com) is continuing to update our clients on the new health insurance laws that were signed into law in the spring of 2010. There are six major coverage options for those in the US and even though some of the rules and regulations are similar for all many differences are there and it all depends on how old you are and for whom you work. Many critical details of this new insurance law will be clarified in the months and years to come.
These six major coverage options are:
(1) Individual or family coverage (private health care plans)
(2) Employee/employer group option for small businesses (typically under 50 employees)
(3) Employee/employer group option for large businesses (typically larger than 50 employees)
(4) Exchange options through the state you are residing in (fully integrated 1-1-2014 and are quasi-government and private insurance coverage combined)
(5) Medicare (which include Parts A, B, C, and D) for those 65 years onwards
(6) Full government health plans like Medicaid, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service.
FSA – Flexible Spending Account
HRA – Health Reimbursement Account
HSA – Health Saving Account
Please note: HSA plans are medical insurance plans while FSA and HRA are not medical insurance plans. Instead, FSA and HRA plans are stand-alone benefits to help pay towards HSA deductibles and/or high deductible plans that do not include co-pays.
| FSA | HRA | HSA | |
| Who Can Use | Any size group (Excludes Partners, more than 2% Stockholders in Sub S Corp, and LLC Members) | Any size group (Excludes Partners, more than 2% Stockholders in Sub S Corp. and LLC Members) | Individuals and any size group |
| Maximum Dollar Contribution | Employer sets maximum Medical Reimbursement limit. IRS sets Dependent Care limit. | Determined by Employer | Limit set by federal guidelines for single/family (CPI rated annually) |
| Who Can Contribute | Employee primarily, but Employer can also fund | Employer only | Individuals, Employers & Employees (or both) |
| Tax Deductible / Tax Free | Yes: Employer/Employee | Yes: Employer/Employee | Yes: Employer/Employee |
| Who Owns the Account | Employer | Employer | Employee |
| Portability | No | No | Yes |
| Rollover | No, Optional Grace Period | Yes. However, not required | Yes |
| FSA | HRA | HSA | |
| Funding | Per pay period by employee | Funded when claim is paid | Funded dollars |
| Health Plan Styles Required | No restrictions | No restrictions | Aggregated high deductible / No co-pays on office visits or RX (HSA plans are no-co-pay plans) |
| Section 125 FSA (funds may be used for dictated by the IRS under this section) | N/A | No restriction | Insurance premium(s) (only for age 65 onwards), medical, vision, and dental expenses |
| Minimum Deductibles | N/A | No restrictions | Set by federal guidelines annually |
| Maximum Out of Pocket | N/A | No restrictions | Set by federal guidelines annually (out of network not included) |
| Claims Substantiation | Required | Required | No, Employee’s Responsibility |
| Non-Qualified Withdraws | Each claim is adjudicated to meet IRC Section 213(d) | Qualified expense only. Employer determines past age 65 payments | Taxable plus 20% penalty to age 65 |
| FSA | HRA | HSA | |
| Eligible Expenses | All IRC Section 213(d) expenses. Employer can not restrict | All IRC Section 213(d) expenses. Employer can not restrict | All IRC Section 213(d) expenses. Employer can not restrict |
| COBRA Required | Yes, MRA only | Yes | No |
Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, www.overseashealthinsurance.com/trip-protection.asp , information with him at all times when he travels Keep our blog close by you, www.gntravelinsurance.com, for continual updates on the changes with the US health care system.
