As employers continue to look for ways to cut health care costs and improve consumerism among the work force, consumer-directed health plans, and health savings accounts and flexible spending accounts, are expected to remain strong in 2012.
HSAs, in particular, could see growth throughout the year, says Steve Wojcik, vice president of public policy at National Business Group on Health, a nonprofit dedicated to representing large employers' perspective on national health policy issues. FSAs have become a standard benefit and are commonly offered, especially among larger employers, while HSAs are starting to attract more attention not only because of their tax benefits but also in light of the provision that allows a participant to roll over unused funds year to year, which isn't allowed with FSAs.
“The advantage of an HSA over an FSA is you can build up the account over time and invest in it,” Wojcik says. “HSAs aren’t like FSAs where you have to spend it during the current year or lose the money. A lot of people now that have had HSAs are building up significant balances on a tax-free basis, and that word of mouth spreading. It’s getting other people interested in HSAs.”
Although the health care landscape has experienced many shifts since the Patient Protection and Affordable Care Act was passed, employers should not expect to see many changes in CDHPs in 2012. However, 2013 holds a major change as FSAs are imposing a new $2,500 contribution limit, says J.D. Piro, senior vice president and leader of the health law group at Aon Hewitt, a human capital consulting firm in Chicago.
For employers that have 2013 plan calendars years beginning in 2012, such as a plan starting July 1, 2012, and ending June 30, 2013, they can choose to implement the new contribution limit during the second phase of the plan calendar year, but this can be a bit of an administrative headache, Piro says. The new contribution limits still apply to the calendar year, which could require a certain amount of individual monitoring. Instead, Piro recommends for employers implement the $2,500 contribution limit during the 2012 phase of the 2012-13 plan calendar year.
While the new contribution limit might not be in place for another year, employers should start disseminating this information now, Piro says. Some employees might not be affected by the new contribution limits because they don't put away that much money in the first place, but employees who take full advantage of FSAs might need as much time as possible to prepare financially.
“You have to get the information about the new limit out there early, so people aren’t surprised at open enrollment,” Piro says. “Employers need to get their designs and communication strategies in place. People seem to be aware of the changes with FSAs, but it’s always different when it actually applies to your situation. It becomes more real, and employers should help their employees get ready for this change.”