Events like these help you grow professionally with peer-to-peer learning and mentorship for sharing knowledge. Here’s how renewing your ECFC membership for continuing education is beneficial to you:

• Attend one of the two conferences offered each year.

• Read the Flex Reporter for developments with cafeteria plans and service providers.

• Download up-to-date industry reports from our extensive website file library.

• Be part of our teleconference series featuring in-depth briefings on important topics by experts from ECFC, industry professionals and government decision makers.

• Enroll in our webinar series where in the past we’ve offered “teach-to-the-test” to help prepare members for the FCS and CFC exam.

Renewing your ECFC membership is the ideal approach to continue your continuing education. It’s another benefit we offer to help you learn and grown in your profession while providing a positive impact on your company.

This is a reminder that it’s time to renew your ECFC membership. Emails with a link to the Renewal Invoice were sent today to the person listed as the Primary Contact for each member organization. If you have questions about who this is in your organization please email info@ecfc.org.

We look forward to your continued involvement in our trade association that is in the business of helping your business succeed. Here are eight areas where ECFC provides value to members like you:

            • Networking

            • Training and Education

            • Certification

            • Influence

            • Information

            • Best Practices

            • Exchange of Ideas

            • Business Relationships

Over the next few weeks we will be breaking down each of these value benefits in a series of informative emails and blog posts. You’ll learn how we help your business through the advocacy, education, advancement, and innovation of tax-advantaged benefit programs that facilitate choice for employers and their employees.

So, renew your ECFC membership today. And renew your opportunities to help your business keep moving in one direction: forward.

We hope that you enjoyed being among the first to see the new We Are ECFC video and to explore the new website with all its improvements including a new Learning Center. The keynote message delivered by Art Barter started us off with fresh insights into what it means to be a leader. We know that you will enjoy reading his Servant Leadership II book provided compliments of Discovery Benefits.

As always, we all benefited from the legislative and technical information and insights provided by Dean Rosen and Sohini Gupta from Mehlman Castinetti, and Alston & Bird's John Hickman and Ashley Gillihan.

Day-two featured 15 in-depth workshop sessions delivered by top industry experts. And, those who stayed for Thursday morning's session were able to interact directly with an IRS representative and be part of the "studio audience" that witnessed the first ever episode of 213(d) Jeopardy.

Of course, as with all ECFC events, it was not all work and no play. To end our first day, we were treated to a Welcome Reception by VISA. Wednesday evening was packed with fun starting with a wine and cheese reception provided by Alegeus and a nightcap reception sponsored by DataPath featuring a sundae bar and beverages.

We also enjoyed a beautiful conference facility, great camaraderie and all the outstanding restaurants, sights, and activities that are exclusive to La Jolla and San Diego.

Thanks, again to the ECFC Conference Committee and the Education Committee for the work you do to make the event happen and to ensure that the content is the best possible. Also, thanks to the Membership Committee and the work you do to make First-Time Attendees feel welcome. Lastly, thanks to all of our Sponsors without whom the event would not be possible the event possible.

We have already begun to plan next year's Annual Symposium which will be at the Westin in Cincinnati, August 6-8. We hope to see you there and we can explore together all that the Queen City has to offer.

With the cost of employer-sponsored health care benefits expected to approach $15,000 per employee next year, large U.S. employers continue to make changes, new research reveals.

Many want to hold down cost increases and are steering employees toward cost-effective service providers, such as telehealth options and high-value in-plan provider networks, according to the nonprofit National Business Group on Health (NBGH) survey 2019 Large Employers' Health Care Strategy and Plan Design. The survey was conducted from May to June with 170 large employers as they finalized their 2019 health plan choices; more than 60 percent of respondents belong to the Fortune 500.

Health benefit costs are still rising at two times the rate of wage increases and three times general inflation, "making this [cost] trend unaffordable and unsustainable over the long term," Brian Marcotte, NBGH president and CEO, said at an Aug. 7 press conference in Washington, D.C.

Read more.

McKinsey’s 2017 Consumer Health Insights (CHI) Survey yielded several findings with important implications for health insurers, providers, and other industry stakeholders.1 Four important themes emerged:

• Affordability. The affordability of healthcare continues to be one of the most pressing consumer concerns and needs
• Continuity. Many consumers lack continuity in their healthcare ecosystem (e.g., in care delivery or health insurance)
• Digital. An increasing number of consumers are using digital healthcare tools, and interest in greater digital engagement continues to rise
• Engagement. Consumers are willing to engage in solutions to reduce healthcare costs, but most believe that they cannot do so today

Download a copy of the report here.

The study found that in 2016, 78.0 percent of HDHP enrollees in the smallest firms (those with fewer than 25 employees) lacked an employer-funded account, compared to 35.2 percent in the largest firms (those with 1,000 or more employees). Overall, HDHP enrollees in the largest firms had significant advantages relative to workers in smaller firms along all of the dimensions examined.

Read More. (Full report is available only by subscription)

Workers with access to health care coverage through their employer are increasingly enrolling in high-deductible health plans, both with and without health savings accounts, as enrollment in traditional health plans has fallen.

So says a report from the Centers for Disease Control, based on data from the National Health Interview Survey. The report finds that, for adults aged 18–64 with employment-based coverage, HDHPs with HSAs saw a boost in enrollment from 4.2 percent to 18.9 percent from 2007 through 2017, while over the same period, HDHPs that lacked HSAs rose from 10.6 percent to 24.5 percent.

Read more. (Registration Required)

 Download a copy of the report here.

Insurers will again be able to sell short-term health insurance good for up to 12 months under final rules released Wednesday by the Trump administration.

This action overturns an Obama administration directive that limited such plans to 90 days. It also adds a new twist: If they wish, insurers can make the short-term plans renewable for up to three years.

Short-term plans are less expensive because, unlike their ACA counterparts, which cannot bar people with preexisting health conditions, insurers selling these policies can be choosy — rejecting people with illnesses or limiting their coverage.

Short-term plans can also set annual and lifetime caps on benefits, and cover few prescription drugs.

Most exclude benefits for maternity care, preventive care, mental health services or substance abuse treatment.

Read more.

Joanne Sammer writing for SHRM states that as members of Generation Z, those born after 1995,  graduate from college, employers will need to provide the support, freedom and flexibility these younger workers seek.

One example of how benefits programs are changing to accommodate the needs of younger workers is the Lifestyle Spending Account (LSA). Sammer explains that LSAs LSAs) allow employers to make taxable contributions on employees' behalf. Employees can use these funds on products and services that the employer makes available, such as fitness classes, pet insurance or charitable giving.

You choose the yearly sum (let’s say, $1,500), and your employees choose what they want to put it towards (a gym membership and a new pair of running shoes, perhaps?). Then, you only pay for the amount they use. We repeat: You only pay for what they’ve used. This one small detail makes a huge difference at the end-of-year review. Not only does it help business owners eliminate those unpleasant year-end surprises, many end up owing less than anticipated.

Read more.

U.S. Rep. Mike Kelly (R-PA), a member of the U.S. House Ways and Means Committee, last week participated in two days of committee markup hearings on 11 health care bills and helped pass two pieces of bipartisan legislation he introduced.

Among the 11 bills passed by the committee on July 11-12 was the Bipartisan HSA Improvement Act of 2018, H.R. 6305, which Rep. Kelly introduced on July 3 to expand Americans’ access to Health Savings Accounts (HSAs), and the Employer Relief Act of 2018, H.R. 4616, for which the congressman was the sole original cosponsor upon its introduction in December 2017 by U.S. Rep. Devin Nunes (R-CA).

“H.R. 6305 gives employers more flexibility to offer quality health care in the setting best for them, like on-site or retail clinics,” said Rep. Kelly in a July 13 statement. “Employers around our country are offering innovative ways to deliver health care to their associates, and this provision makes sure that individuals with HSAs can utilize these same services.”

Additionally, he pointed out, H.R. 6305 would fix the HSA spouse penalty by allowing individuals to make HSA contributions if a spouse has a Flexible Spending Account, but preventing double-dipping in tax benefits. The bill also would streamline the conversion of other tax-preferred accounts to HSAs, thereby making it easier for Americans to save money for health care services.

“Ultimately, this bill modernizes health care delivery and gives employers the freedom to innovate and improve their employees’ health insurance,” Rep. Kelly said. “We are trying to improve health care for all Americans. This means giving consumers a choice in their health care. This means incentivizing wellness and exercise, not sickness. This means giving employers the freedom to design insurance products that work best for their associates.”

In thanking U.S. Rep. Earl Blumenauer (D-OR), the original cosponsor of H.R. 6305, Congressman Kelly called the issue “extremely important for the 175 million people who get their health insurance from their employer,” and urged fast action by congressional members toward making H.R. 6305 a federal law.

Nearly 30 conservative leaders agree. In a July 11 open letter sent to Ways and Means Committee Chairman Kevin Brady (R-TX) and U.S. Rep. Peter Roskam (R-IL), chairman of the House Ways and Means Subcommittee on Health, the leaders wrote in support of the committee’s legislative efforts to expand HSAs, including Rep. Kelly’s bill.

“Since they were created almost 15 years ago, HSAs have proven successful in promoting healthcare choice, lowering taxes and lowering healthcare costs. Expanding HSAs will build on this success,” according to the letter, which was signed by the leaders of groups including Americans for Tax Reform, the HSA Coalition, Americans for Prosperity, the Campaign for Liberty, the 60 Plus Association, the Goldwater Institute, Health Freedom Hub, the National Taxpayers Union, Hispanic Leadership Fund, and the Independent Women’s Forum, among others.

Another Kelly bill passes
The House Ways and Means Committee also approved H.R. 4616, which would amend the Patient Protection and Affordable Care Act, also known as Obamacare, to provide for a temporary moratorium on the employer mandate and to provide for a delay in the implementation of the excise tax on high-cost, employer-sponsored health coverage, according to the congressional record.

Rep. Kelly noted that the employer mandate on small businesses having more than 50 employees costs them millions of dollars in unnecessary administrative compliance and reporting.

If enacted, H.R. 4616 would provide three years of retroactive relief and one year of prospective relief from the employer mandate provision within Obamacare, paired with a one-year extended delay of the law’s so-called Cadillac Tax on high-value health care plans.

“Mr. Nunes and I introduced this bill to give relief to Americans and employers struggling under Obamacare,” said Rep. Kelly during the Ways and Means Committee markup on H.R. 4616, which would delay the Cadillac Tax for one additional year, until 2023.

“We have discussed the Cadillac Tax at length in this committee and how it is a misguided policy in Obamacare,” said the congressman, adding that H.R. 4616 “is good progress, but we cannot lose sight of the goal: the full repeal of the Cadillac Tax.”

Ending the tax, which Rep. Kelly said “continues to hang over the head of the 175 million Americans who receive health insurance through their employer,” is actually an issue that he thinks unites House Republicans and Democrats, as evidenced by support for the Middle Class Health Benefits Tax Repeal Act of 2017, H.R. 173, which Rep. Kelly introduced on Jan. 3, 2017.

H.R. 173 currently has 297 co-sponsors, giving the measure a veto-proof majority, according to his office. The bipartisan H.R. 173, co-sponsored by U.S. Rep. Joe Courtney (D-CT), is under consideration by the House Ways and Means Subcommittee on Health.

Rep. Kelly also said during the markup hearing that H.R. 4616 would provide relief to “employers crushed under the employer mandate” by ending “another misguided policy in Obamacare that the Obama administration never enforced.”

“Let’s not lose sight of repealing all of Obamacare’s misguided taxes on hard-working Americans,” the congressman reminded his colleagues.

In a press release, Devenir notes that widespread interest has put HSA investments, an important aspect of HSAs, in the spotlight. Several recent reports, publications and articles have featured HSA investing as a promising tool for improving health and wealth. While these reports have often made compelling points and offered insight, most have viewed HSAs through external lenses and failed to capture important nuances of the HSA market. HSAs differ from 401(k)s and other more traditional retirement accounts in a number of ways. By offering best-practice marketplace conventions, stakeholders can form more comprehensive and healthier assessments of the HSA investment landscape.

Highlights from the Viewpoint include:

• Menu Design: Well-designed investment menus typically offer broad asset class coverage that provides for various HSA strategy objectives.
• Investment Quality: Comparing performance and a holistic approach to evaluating cost.
• Plan Design: Implementing menu changes in the HSA space & plan features in demand

“Since HSA investments have come into the spotlight, we felt it made sense to share some of the insights we’ve gathered over 14 years of experience in the HSA marketplace,” said Zach Haas, lead author of the white paper and investment analyst at Devenir.

The full version of the Viewpoint is available exclusively to Devenir’s clients

Click here to access the Executive Summary.

Mary Beth Franklin cites the annual health care survey from Nationwide Retirement Institute released Monday writing that "affluent older adults are worried about what health care costs, including long-term care expenses, could do to their carefully laid retirement plans. Yet only about half of those who work with a financial adviser have discussed their fears because they consider health care a personal matter, according to a new survey."

Franklin notes that the survey found that most future retirees are taking steps to save for health care costs in retirement, including building up their savings accounts (59%), investing (56%), increasing their 401(k) contributions (46%) and paying off credit card debt and loans (36%).

"But while nearly half of employed affluent adults have access to a health savings account (HSA) through their employer, only 30% contribute to the HSAs, and few fully leverage HSAs' triple tax break. Of those who do contribute to an HSA, only 10% maximize the accounts by using them as long-term savings vehicles. Unused HSA funds can be rolled over from year to year and can be used tax-free to pay for future health care costs in retirement, which in turn can reduce future income taxes and possibly reduce future Medicare premiums."

Franklin concludes that "advisers can help clients by creating personalized health care costs estimates, projecting savings needs for those costs and recommending funding sources such as HSAs, insurance, Social Security, and Medicare. Advisers should also suggest that clients discuss potential health care needs and costs with family members to create a truly holistic retirement plan."

Read more.

Fidelity notes that the contribution limits for 2018 are $3,450 for individuals, $6,900 for a family, and $1,000 in catch-up contributions for those over age 55. However, last year, individuals contributed an average of $1,800 and family account owners, $3,800

Read more.

Since 2012, investors have steered more than 

“Our lives increasingly revolve around new technologies and digitalization, and this study confirms that benefits technology is reshaping how employers think about their benefits strategy,” said Marc Costantini, executive vice president, Commercial and Government Markets, at Guardian. “A multi-generational workforce along with mounting pressures on employers to contain costs, simplify their benefits, and stay compliant are prompting employers to make this a priority.”

Read more.

Noting that HSAs are important tool for improving the quality of healthcare while keeping costs down, McKechnie urged lawmakers to support several HSA-related proposals currently before Congress that would expand HSA access to more Americans, permit the accounts to be used for over-the-counter medications and allow HSA-qualified health plans to cover care for medically complex chronic conditions with no deductible. He also called for an increase to contribution limits to match the statutory limit on out-of-pocket expenses for HSA-qualified plans, and advocated for an additional method of determining HSA-qualification using the more flexible actuarial value approach.

“These ideas are vetted, bipartisan and affordable,” he said. “Some would actually save taxpayer money. Individually and together, they can dramatically strengthen the proven, successful HSA model.”

Hill Day Visits

ECFC Members were busy on Capitol Hill this week. Ten members of the ECFC Government Relations and Interpretations Committee were in Washington DC on Wednesday, June 6, and met with the legislative staffers of 24 House and Senate congressional members.

ECFC members stressed to lawmakers the important role that consumer-directed health plans are serving to help employees meet ever increasing health plan deductibles and out-of-pocket medical expenses.  

They also shared data showing that consumer-directed plans like FSAs and HSAs are middle-class benefits. According to a survey conducted by ECFC, the median household income for an FSA participant is $57,060 and $57,860 for an HSA participant.

While on the Hill, ECFC representative made policy recommendations and pointed out specific legislation that it supports. 

Subcommittee Testimony

Meanwhile, Wednesday morning, Jody Dietel, ECFC Board Chair, testified in-person before the House Ways and Means Subcommittee on Health. Download a copy of her testimony here.

ECFC also participated in the hearing,  “Lowering Costs and Expanding Access to Health Care through Consumer-Directed Health Plans,” by submitting written testimony. Click here to read more.
 

Eisenberg notes, “The changing workforce demographics have created a new protocol for HR departments to follow, which includes updating the benefits package to resonate with younger employees.”

While such companies as Aetna and Estée Lauder Companies are now offering about $10,000 in lifetime contributions to employees’ student loans, these benefits are not tax-preferred which Eisenberg notes makes it a difficult offering for the majority of companies to squeeze into their ever-growing benefits package.

Click here to read more and to find out what Congress may be doing about this problem.

This week, the House Ways and Means Health Subcommittee held a hearing on lowering costs and e

 Click to see highlights of testimony presented by ECFC Board Chair, Jody Dietel, and others including Roy Ramthun.

Cassidy urges members of Congress to take commonsense actions to lower health care costs by focusing on six policy areas: I. Empowering patients to reduce their health care costs II. Lowering health insurance premiums III. Ending health care monopolies by increasing competition IV. Decreasing drug costs for patients V. Eliminating administrative burdens and costs VI. Reducing costs through primary care, prevention, and chronic disease management.

Read More

The article notes that the index also found that prescription drug trends are down for the third consecutive year. However, while employers are paying more, employees are paying a lot more. Over the long-term, Milliman had seen employees footing an increasingly higher percentage of the total. That trend continues in 2018, with employee expenses increasing by 5.9 percent, while employer expenses increased by only 3.5 percent. Read more

Key findings from the report show that although consumers are paying attention to their physical health and engaging in healthy lifestyle behaviors, opportunities exist for employers, benefit administrators, and healthcare providers to further educate consumers on the various factors that play a critical role in influencing physical and financial health.

1. Consumers can improve their focus on the financial aspect of healthcare.
2. Consumer confidence in health plan coverage does not align with their financial literacy of health plans.
3. Consumers are making lifestyle changes to improve their health.

To view the full report, visit hsabank.com/healthandwealthindex.

A Kaiser Family Foundation study finds that about half of all people with employer provided coverage have a deductible of at least $1,000 . An Avalere study finds that the average deductible for silver plans in the (Obamacare) exchanges this year is almost $4,000. Some employers of fast food workers are only offering plans with the maximum out-of-pocket exposure Obamacare regulations will allow. Currently, that’s a $7,150 deductible for an individual and double that for a family.

There has been a sea change in the way the health policy community thinks about this. When Gerald Musgrave and I introduced the idea of Health Savings Accounts  25 years ago, the reaction was almost uniformly negative – in the health insurance industry, among the professional societies, among the hospitals and in the academic world.

The prevailing view at that time was that patients are incapable of making good decisions about how to spend health care dollars and that these decisions should instead be made by managed care professionals. Today we find even liberal Democrats defending extraordinary out-of-pocket burdens faced by people who get insurance in the exchanges they helped create. 

Despite this remarkable change in attitude, very few people seem to understand what is going on.

 Read more

As health care costs continue to rise, health spending accounts are gaining momentum as vital tools that help many Americans save money by using pretax dollars to pay for health-related expenses. Flexible spending accounts (FSAs) and health savings accounts (HSAs) are two of the most common such vehicles. These consumer-driven spending accounts are particularly useful in conjunction with high-deductible health plans, which are becoming more common among workplace benefits offerings.

As the use of these accounts increases, legislative changes are needed in order to make them effective and accessible to more Americans. Here are three regulatory updates currently on the table to encourage broader use of FSAs and HSAs among American employers and employees:

1. Repeal or amend the “Cadillac Tax”

The excise tax on high-cost employer-provided health plans (also known as the “Cadillac Tax”) was included in the Affordable Care Act to discourage employers from providing excessively rich health benefits at taxpayers’ expense. It places a 40% tax (paid by the employer) on the cost of health coverage that exceeds certain threshold amounts.

The Cadillac Tax has unintended consequences for HSAs and FSAs. In particular, the inclusion of individual employee contributions to these accounts in the calculation of the tax threshold creates a significant disincentive for employers to offer these benefits, for fear of triggering the excise tax.

An amendment to repeal the Cadillac Tax passed the Senatein July 2017, but the corresponding bill has yet to pass the House of Representatives. On Jan. 22, Congress passed and President Donald Trump signed into law a two-year delay on the Cadillac Taxas part of the federal funding bill to end a partial government shutdown. The tax remains delayed until 2022, but a two-year delay has little impact on the many employers who must make decisions about their benefits programs three to five years in advance. In order to maintain and expand the availability of FSA and HSA accounts for working families, Congress must repeal the Cadillac Tax entirely, or at the very least pass legislation to exempt individuals’ contributions to these accounts from the calculation of the tax threshold.

Read More

In addition, more than half (54%) were not aware that they could invest their HSA funds in stocks, mutual funds and other investment vehicles. And, three-quarters of respondents see their HSA as a way to pay for health care expenses this year, which indicates they may not be aware that funds can be carried over into the next year. WEX Health says all these findings add up to a significant opportunity for further educationon the triple-tax advantages of HSA accounts.

More than three-quarters (82%) of those who participate in high deductible health plans (HDHPs) either somewhat or strongly agree that managing their health care spending account helps them make smarter health decisions. The survey found the ways to motivate employees the most to access resources and make better health care choices are financial incentives (64%), emails (43%), online tools and resources (38%) and online ability to track employees’ health care goals (33%).

The most challenging part respondents cited in using their HSA was making sure to have enough funds set aside to cover deductibles (29%) and figuring out how much money to put in the account overall (21%).

Read More