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Friday, April 27, the Internal Revenue Service (IRS) announced that the 2018 annual contribution limit to Health Savings Accounts (HSAs) for persons with family coverage under a qualifying High Deductible Health Plan (HDHP) is restored to $6,900. The single-coverage limit of $3,450 is not affected.

This is the final word on what has been an unusual back-and-forth saga. The 2018 family limit of $6,900 had been announced in May 2017. Following passage of the Tax Cuts and Jobs Act in December 2017, however, the IRS was required to modify the methodology used in determining annual inflation-adjusted benefit limits. On March 5, 2018, the IRS announced the 2018 family limit was reduced by $50, retroactively, from $6,900 to $6,850. Since the 2018 tax year was already in progress, this small change was going to require HSA trustees and recordkeepers to implement not-so-small fixes to their systems. The IRS has listened to appeals from the industry, and now is providing relief by reinstating the original 2018 family limit of $6,900.

Employers that offer HSAs to their workers will receive information from their HSA administrator or trustee regarding any updates needed in their payroll files, systems, and employee communications. Note that some administrators had held off making changes after the IRS announcement in March, with the hopes that the IRS would change its position and restore the original limit. So employers will need to consider their specific case with their administrator to determine what steps are needed now.

HSA Summary

An HSA is a tax-exempt savings account employees can use to pay for qualified health expenses. To be eligible to contribute to an HSA, an employee:

  • Must be covered by a qualified high deductible health plan (HDHP);
  • Must not have any disqualifying health coverage (called “impermissible non-HDHP coverage”);
  • Must not be enrolled in Medicare; and
  • May not be claimed as a dependent on someone else’s tax return.

HSA 2018 Limits

Limits apply to HSAs based on whether an individual has self-only or family coverage under the qualifying HDHP.

2018 HSA contribution limit:

  • Single: $3,450
  • Family: $6,900
  • Catch-up contributions for those age 55 and older remains at $1,000

2018 HDHP minimum deductible (not applicable to preventive services):

  • Single: $1,350
  • Family: $2,700

2018 HDHP maximum out-of-pocket limit:

  • Single: $6,650
  • Family: $13,300*

*If the HDHP is a nongrandfathered plan, a per-person limit of $7,350 also will apply due to the ACA’s cost-sharing provision for essential health benefits.


Originally posted on thinkHR.com

In the first part of this two-part blog, I recommended a number of important items to keep in mind as you select a stop loss carrier. Additionally, here are a few other things you will want to look for, or ask about, when selecting a stop loss carrier. While this is not an exhaustive list, these are some of the most frequent items I have seen that cause issues or gaps in coverage.

Plan Mirroring

Does the stop loss carrier “mirror” its policy to your employee benefit plan document? I like to think of this whole plan mirroring approach as kind of hand in glove. The relationship between the employee benefit plan document and the stop loss policy should be a complement to one another.

Your employee benefit plan document and your stop loss policy are two separate documents containing many different provisions and terms. Without plan mirroring, stop loss carriers will audit to their stop loss contracts, which can, and do, result in gaps in coverage. Make sure you work with a carrier who will provide plan mirroring.

Medical Necessity Determinations

Although a stop loss carrier can follow plan language, some do, and will, question determinations made by the plan for medical necessity. Stop loss carriers differ on their level of scrutiny in this area. The reality is the medical field is not always black and white on how to treat a patient. It is important to understand the carrier’s position and also the medical guidelines used by your administrative services only (ASO) carrier or third-party administrator (TPA) in making medical determinations.

Recognition of Network Requirements

With your employee benefit plan, you are most likely using a preferred provider organization (PPO) network where provider claims are subject to payment based on an agreed schedule. The agreement you have to access this network predicates what the plan will pay the provider for their services.

A stop loss carrier who is not party to this agreement may question the payment methodology, or feel it can do better on certain claims. They rely on cost containment vendors to review claims and determine what they might feel would be “reasonable” payments. If this is the case, you, as an employer, may be left with a gap in coverage as you are required under your employee benefit plan to reimburse the provider at the contracted rate, but your stop loss carrier may not reimburse you to that level.

It is important to know your stop loss carrier’s position on this type of situation.

Claim Turnaround

Find out what the carrier’s commitment is to paying claims. Many carriers have standards that can vary greatly by carrier. With stop loss, you are typically dealing with large dollar amounts and from a cash flow perspective, you want to know what your carrier’s policy is regarding claims payment.

Will the carrier allow for “advanced funding?” If so, the claim is first adjudicated and processed, but not paid until the stop loss carrier has reimbursed the portion over the stop loss deductible. This, in turn, minimizes the disruption to your cash flow. Many, but not all, carriers offer advanced funding and some will charge an additional fee.

You will want to check with your broker or administrator on the carriers you are considering and what their specific requirements are for advanced funding.

Reasonable and Customary (R&C)

R&C is also known as usual and customary (U&C). As noted earlier, most employee benefit plans take advantage of PPO networks, where provider claims are subject to payment based on an agreed schedule. Outside of claims through a PPO, most plans limit claims payments or reimbursements to R&C charges. This describes the amount an ASO carrier or TPA decides to use as the starting point in the payment for a service.

In each case, it is important to ensure that the employee benefit plan’s definition agrees with the stop loss policy, or that the stop loss policy will follow the provisions of the employee benefit plan.

Secondary Network Access Fees

Typically, a TPA or ASO carrier will provide access to a “secondary” or specialty-type network, such as a transplant-only network. The advantage is that the employee benefit plan and member gain access to discounts, or additional discounts above and beyond that of the primary network offering.

In these cases, there is typically an access fee usually set as a percentage of the savings achieved that is the responsibility of the employee benefit plan. These fees are NOT always reimbursable by the stop loss carrier, or the stop loss carrier may put a limit on the amount reimbursed.

Check with your broker or administrator on whether stop loss carriers you are considering will reimburse you for these types of fees.

While these six considerations are not a comprehensive list, they will certainly set you on the right path for discussions with your broker, or administrator, on selecting a stop loss carrier that not only meets your needs, but also provides the protection necessary for your employee benefit plan and company.

By Steven Goethel, Originally Published by United Benefit Advisors

Switching over to AEIS Advisors was the best decision we’ve made this year. Ronald and his team were able to identify discrepancies on our billing statements which got missed by our last broker, and they saved us over $8,000 in credits! AEIS has proven to be an attentive and caring company, looking out for the best needs of their clients."

- Director of Operations