Health Tips and Information

Enrolling in a high deductible health plan (HDHP), sometimes paired with a health savings account (HSA) or health reimbursement arrangement (HRA), can serve as an effective way to manage out-of-pocket healthcare spending while reaping some valuable tax benefits. But of course, as healthcare costs rise along with inflation, your budget is impacted. Without occasional adjustments to certain limits, the benefits of these plans could become irrelevant over time.

So for that reason, out of pocket maximums for HDHPs do change. And because of that, the IRS sometimes issues changes to annual contribution limits for HRAs and HSAs.

First, let’s take a look at the changes to HDHPs, coming next year:

• The maximum out-of-pocket limit (excluding premiums) for self-only coverage will rise from $7,050 in 2022 to $7,500 in 2023
• The maximum out-of-pocket limit (excluding premiums) for family coverage will rise from $14,100 in 2022 to $15,000 in 2023

Yes, this means your out-of-pocket ceiling for spending will be a bit higher next year. But accordingly, the IRS will allow for greater contributions to HRAs and HSAs.

For those with an excepted-benefit health reimbursement arrangement (HRA), the annual contribution limit will rise from $1,800 in 2022 to $1,950 in 2023.

The annual contribution limits for health savings accounts (HSAs) will change as follows:

• The contribution limit for those with self-only health insurance coverage will rise from $3,650 in 2022 to $3,850 in 2023
• The contribution limit for those with family health insurance coverage will rise from $7,300 in 2022 to $7,750 in 2023
• Catch-up contributions for those aged 50 and older will remain the same, at $1,000

Employers should update all of their communications with employees to reflect these new limits, before the start of next year. If you have any questions about these healthcare plans, or anything else concerning your healthcare insurance arrangements, call our office and we’ll be happy to assist you.

Gone are the days in which mental health care was not treated with the same level of importance as care for physical health issues. These days, both the Affordable Care Act and California law set forth minimum standards for health care plans and providers, so that those needing treatment can seek and receive the services they require.

But as with anything else, knowing your rights is the key to accessing them. So here is what you need to know about mental health care and the law.

Under the ACA, mental health services are deemed “essential”, meaning any plan that seeks to be ACA-compliant must provide a certain level of care in this area of health. Services that must be provided under the plan include:

• Treatments such as counseling and psychotherapy
• Inpatient mental and behavioral health services
• Substance abuse treatment

These mental health services are subject to the same standards as medical and surgical care in how care is managed and how deductibles and co-pays are applied.

Additionally, California law supplements ACA requirements by specifying a number of specific conditions for which care must be provided:

• Major depressive disorders
• Autism or pervasive developmental disorder
• Bipolar disorder
• Panic disorder
• Schizophrenia
• Schizoaffective disorder
• Obsessive-compulsive disorder
• Anorexia nervosa
• Bulimia nervosa
• Serious emotional disturbances in children under age 18

California healthcare plans must cover inpatient and outpatient treatment, as directed by the overseeing doctor, and prescription drugs when needed.

Your health insurance plan, however, could stipulate how you access mental health services, so contact your insurance company or broker to learn how to access this benefit.

Finally, if you seek an initial consultation for mental health care, California law requires that the provider or facility provide you with a return appointment within 10 days. The same deadline applies to referrals for mental health care from your primary care provider.

We are fortunate that the law does take mental health seriously, and that we can all obtain care when we need it. Just as with any other healthcare need, seek services promptly when you need them to protect your health. And if you’re ever in doubt as to how your healthcare plan works, or what type of treatment it covers, contact your plan provider’s customer service team.

When you’re shopping for an insurance plan, you face an important choice right away. Should you consult with an independent insurance broker, or what’s called a “captive agent”? Here’s the difference: An independent insurance broker contracts with many different providers, whereas a captive agent works for just one insurance company.

If you choose to work with an independent insurance broker, you will reap several valuable benefits…

Access to a wide range of insurance providers and plans. This can be especially important with regard to health insurance and particularly Medicare plans. You want a plan that truly suits your healthcare needs, while fitting into your budget with regard to things like copayments, premiums, and deductibles. Because health insurance and Medicare plans can vary so widely from one another, the ability to shop amongst numerous insurance carriers can only provide you with better options.

Customer support. Independent insurance brokers enjoy additional training, education, and support resources, the benefits of which are passed on to you. Your independent agent will reach out to you regularly with helpful blogs and/or email newsletters to keep you informed of your options. And it always helps to consult with a friendly face right in your own hometown, rather than an anonymous stranger over a nationwide 1-800 number.

Flexibility. Because independent insurance brokers are self-employed and make their own schedules, they are often available at more flexible hours and locations. This can be of great help to the busy professional who needs personal assistance that fits into their lifestyle.

As you’re shopping for a health insurance plan, Medicare plan, or any other type of insurance, keep these points in mind. Give us a call, and we will demonstrate the benefits of working with an independent insurance broker so that you can judge the difference for yourself.

For those with high-deductible healthcare plans, low monthly premiums can also mean high out-of-pocket expenses. These plans are often thought to be the right choice for those who are unlikely to experience significant health problems, or employers who cannot afford to provide a more expensive, low-deductible plan. But when health problems do strike, they can wipe out an individual’s financial resources. A health savings account (HSA) is the answer to that problem.

What is an HSA? A health savings account works like a savings account, but the money in it will be strictly used for covering out-of-pocket healthcare expenses. They can be paired with low-premium, high-deductible healthcare plans, to help employees save up to meet their deductibles and other costs.

An HSA provides certain tax advantages. An HSA is funded via automatic contributions from the employee’s paycheck, on a pre-tax basis. This means that the funds used to cover their out-of-pocket healthcare expenses are not taxed, and the employee’s overall income tax liability is lowered by the amount of their HSA contributions for the year. This can provide a significan tax benefit to workers while helping them to budget for large medical expenses.

HSA funds roll over from one year to the next. If funds within the HSA are not used in a particular year, there is no risk of losing the money. It simply rolls over to the next year. In fact, because the HSA stays with the employee and rolls over each year, they can even take it with them into retirement. At that point the money can be used to cover Medicare premiums or out-of-pocket healthcare expenses like prescription medications, making HSAs another way to prepare for the future.

What is the HSA contribution limit? In 2022, individuals can save $3,650 and those with family healthcare plans can save $7,300 in their HSA.

What if my employer does not offer an HSA? You can still open a health savings account through any bank that offers one. Then, you can fully deduct your contributions on your tax return each year.

To learn more about HSAs and how they can help you and/or your employees, give us a call and we’ll help you evaluate the possibilities.

If you receive a subsidy to help pay for your health insurance premiums, you probably already know that these subsidies are calculated based upon your household size and income. But what you might not know is that errors regarding those calculations can lead to an unpleasant surprise later.

Each year, your subsidy is calculated based upon your anticipated income for the year. Those subsidies are then paid directly to your health insurance provider, as Advanced Premium Tax Credits (APTC) each month. But if your income exceeds expectations for the year, and your the APTC paid is larger than it should have been, then you will owe the difference when this discrepancy is discovered. This generally happens when you file your income tax return, which reflects your true income for the year. If you received a raise during the year, your spouse’s employment situation changed, or if you worked a lot of overtime, you could earn more than the original estimate of your annual income.

Certain limitations do apply to the repayment demand, according to IRS rules, so you might not owe the full balance. However, this is a situation that you definitely do not want to risk! No one wants to discover that they unexpectedly owe hundreds or even thousands of dollars.

Luckily, there is a simple way to avoid this unpleasant situation. Simply keep track of your income throughout the year, and update the system if it looks like your earnings will exceed the original calculation of your expected income. Log into www.coveredca.com to update your earnings record, so that your subsidy can be recalculated to reflect your true income.

If you have more questions about health insurance subsidies or how they are calculated, give us a call so that we can assist you. The system can be confusing at times, but with professional assistance you can maintain health insurance coverage while avoiding overpayments and subsequent repayment demands.