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Health Savings Accounts – The Pros and Cons

HSA Accounts Pros and Cons

Pros and Cons of a Health Savings Account

Investopedia – By Jean Folger November 17, 2017

A Health Savings Account (HSA) is like a personal savings account, but the money is used only for qualified health care expenses. The account can be set up with you as the sole beneficiary, or for you plus your spouse and/or dependents. Established in 2003 as part of the Medicare Prescription Drug, Improvement and Modernization Act, HSAs allow people with High-Deductible Health Plans to pay for current healthcare expenses and save for future expenses on a tax-favored basis. Here, we look at the eligibility requirements, pros and cons and other important details about Health Savings Plans.


To be eligible for an HSA, you must be enrolled in a special health insurance plan called a High-Deductible Health Plan, or HDHP. While these plans have high deductibles, monthly premiums are typically much less than for plans with lower deductibles, which makes them appealing to people trying to minimize up-front costs associated with healthcare. HDHPs are intended to cover serious illness or injury, and with the exception of preventive care (such as annual physicals, child and adult immunizations, and screening services), your annual deductible must be met before any plan benefits are paid.


Health Savings Accounts offer a way to save for – and pay for – healthcare expenses. There are many advantages to having a Health Savings Account:

  • Others can contribute to your HSA. Contributions can come from various sources, including you, your employer, a relative and anyone else who wants to add to your HSA.
  • Pre-tax contributions. Contributions made through payroll deposits (through your employer) are typically made with pre-tax dollars, which means they are not subject to federal income taxes. In most states, contributions are not subject to state income taxes either. Your employer can also make contributions on your behalf, and the contribution is not included in your gross income.
  • Tax-deductible contributions. Contributions made with after-tax dollars can be deducted from your gross income on your tax return, which means you may owe less tax at the end of the year.
  • Tax-free withdrawals. Withdrawals from your HSA are not subject to federal (or in most cases, state) income taxes if they are used for qualified medical expenses.
  • Earnings are tax-fee. Any interest or other earnings on the assets in the account are tax free.
  • Funds roll over. If you have money left in your HSA at the end of the year, it rolls over to the next year.
  • Portable. The money in your HSA remains available for future qualified medical expenses even if you change health insurance plans, change employers or retire. Funds left in your account continue to grow tax fee.
  • Convenient. Most HSAs issue a debit card, so you can pay for your prescription medication and other expenses right away. If you wait for a bill to come in the mail, you can call the billing center and make a payment over the phone using your debit card.  And, you can use the card at an ATM to access cash.

Proposed rate changes for the individual health insurance market

The Division of Insurance has posted proposed rate changes for the individual health insurance market

CARSON CITY, NV – The Nevada Division of Insurance has received and made public the proposed health insurance rate changes from carriers on and off the Exchange for Plan Year 2019.

Based on the rate submissions the Division has received for 2019 plans, there will be two insurance companies offering plans on the Exchange with up to 15 individual health plans to choose from. The average proposed rate change for the individual market on Exchange is an increase of 1.9%

“This is the lowest proposed rate increase the Division has received since the beginning of the Affordable Care Act (ACA),” explained Insurance Commissioner Barbara Richardson. “The Division is working diligently reviewing these requests from carriers. We always caution that these proposed rates are subject to change depending on any new federal decisions that are made.”

“I am pleased with the initial proposed rate changes from insurance carriers as this is great news for Nevadans,” Governor Brian Sandoval said. “Even though there has been uncertainty in the past, these proposed filings reflect the hard work the Silver State has done to try and stabilize the health insurance market for its citizens.”

For the off-exchange market, there will be four insurance companies offering up to 41 individual health plans to choose from with an average proposed rate change of 3.1%

The Division encourages consumers to review these rate changes and submit their comments to the Division during this rate review process.

Additional information on proposed rate changes can be accessed by viewing a summary of the proposed rate changes or by visiting the Division’s website at http://doi.nv.gov/rate-filings.

Approved rates will be posted on October 2, 2018.

About the Nevada Division of Insurance

The State of Nevada Division of Insurance, a Division of the Nevada Department of Business and Industry, protects the rights of Nevada consumers and regulates Nevada’s $14 billion insurance industry. The Division of Insurance has offices in Carson City and Las Vegas. In 2017, the Division investigated more than 3,200 consumer complaints and recovered over $5 million on behalf of consumers. For more information about the Division of Insurance, visit DOI.NV.GOV.

Small hikes likely for Nevada health insurance plans in 2019

By Jessie Bekker / Las Vegas Review-Journal

Nevada’s health insurance rates will increase only slightly in 2019, the state’s Division of Insurance announced Tuesday.

Centene Corp.’s SilverSummit Health Plan and Health Plan of Nevada proposed an average 1.9 percent increase on the 15 plans they will offer in the state, the smallest increase since the Affordable Care Act took effect in 2014, Insurance Commissioner Barbara Richardson said in a release. The 41 off-exchange plans will face an average 3.1 percent rate increase.

It’s good news for Nevada, said Heather Korbulic, executive director of the Silver State Health Insurance Exchange.

“All of that shows that carriers are feeling more comfortable with the risk … and therefore their rates are stabilizing,” she said.

Last year, Health Plan of Nevada, the only carrier which returned to the state’s marketplace after Anthem and Aetna pulled out, proposed an average rate increase of 27.2 percent for plans on the exchange.

The company doesn’t plan to change on-exchange rates this year and will again only offer plans in Clark Washoe and Nye counties; SilverSummit proposed to raise rates 5.2 percent on average and will offer six plans in all of the state’s 17 counties.

“Ultimately, I think they’re finding more stable ground,” Korbulic said of the two returning insurance carriers. “They’ve got a commitment from our governor’s office and our (Division of Insurance) and the exchange to do whatever we can … to stabilize the marketplace.”


Nevada Leaving Federal Platform To Set Up Its Own ACA Exchange

Nevada looks to learn from past mistakes in health platform switch

By Yvonne Gonzalez (contact)
Sunday, April 8, 2018 | 2 a.m.

CARSON CITY — The state’s health exchange under the Affordable Care Act is moving off the federal platform for signing up for insurance, relying on lessons learned in the past and in other states.

Vendors have until 2 p.m. April 13 to file proposals with the Silver State Health Exchange and must adhere to strict requirements. The goal is to avoid mistakes made the first time around, said Heather Korbulic, the exchange’s executive director.

“(Applicants) have to have at least one year of demonstrated and proven experience,” Korbulic said on March 30. “It’s a smaller pool when you start limiting things like that.”

Korbulic said only about a handful of companies have built successful platforms under the Affordable Care Act.

“We’re not looking to create new wheels,” Korbulic said. “You must have provided these services to other states, functionally.”

Virginia-based hCentive Inc., for example, has built software that as of 2016 had handled more than 10 million benefit requests across the country. HCentive lists healthcare.gov and exchanges in Colorado, Massachusetts and Arkansas among its clients. Korbulic said she’s spent about three years looking at the platforms run by other states, including Minnesota, Colorado, Idaho, Connecticut and Rhode Island.

The Interim Finance Committee recently approved $1 million for the design, development and implementation of its own platform.

“The build is going to be really small because we don’t have to do that much,” Korbulic said. “Essentially, these products exist. They’re going to have to configure it to interface with our Welfare and Supportive Services systems and to our carriers, but that’s very minimal.”

If the new platform is open by Nov. 1, 2019, for the 2020 plan year, as officials are aiming for, the exchange would save $6 million. The exchange, which uses its own revenue to operate, pays healthcare.gov $5.5 million, or about 1.5 percent of the premiums it collects. That figure will increase to $11 million by 2020.

Xerox had collected $12 million of a $75 million contract when the state fired the company in 2014 and moved onto the healthcare.gov platform.

Korbulic said Xerox ran into issues the first time around because it was attempting to create a one-stop shop for determining eligibility for both Medicaid and health insurance subsidies. When the system didn’t work, it created a bottleneck for consumers.

To avoid this in the future, Korbulic said, vendors have to be able to replicate the way the state’s Division of Welfare and Supportive Services communicates with Medicaid and healthcare.gov.

Currently, customers who visit the exchange website or the Division of Welfare and Supportive Services find a prescreening page that uses information like income to direct people to Medicaid or healthcare.gov. Consumers will see no changes to the process later this year, when open enrollment begins again.

“We’re not changing any processes, we’re not going to require one single eligibility system,” Korbulic siad. “It’ll be a pre-screener like you have right now.”

The exchange is also working on being able to migrate all of the healthcare.gov data into its own platform, such as consumers’ plans, premium cost and subsidy eligibility. Korbulic said this will help the exchange get rolling on its own platform for plan year 2020.

With its own platform, the exchange will be able to have real-time access to information that will help officials target advertising for those who need insurance but aren’t buying it, Korbulic said. This will help as the individual mandate, which taxed people who went uninsured, is eliminated effective in 2019.

“If we can have a better sense of who those consumers are that are going to potentially leave, then we can start targeting them with advertising and messaging and saying, you really are going to benefit from having this insurance,” Korbulic said.

The exchange could also accommodate more innovative plans, such as “Sprinklecare,” a Medicaid buy-in option that failed to become law last year.

Healthcare.gov also operates on servers rather than through a cloud like almost every other technology today, Korbulic said. Servers are expensive and need to constantly have the capacity to handle peak traffic, which only occurs during the 45-day open enrollment, Korbulic said. A cloud can increase or decrease as appropriate to save money, she said.

“It’s not going to be perfect,” Korbulic said. “There will be things that are bumps in the road, but what we’re hoping to have is all the healthcare.gov data migrated into our system.”

CMS Begins Mailing New Medicare ID Cards

Docs say they’re ready for new Medicare ID Cards

The CMS is starting to mail seniors new Medicare identification cards with randomly generated beneficiary identifiers in place of Social Security numbers.

Frontline providers say they are ready for the change.

The revamped cards will first go to new beneficiaries. In the coming weeks current Medicare beneficiaries in Delaware, the District of Columbia, Maryland, Pennsylvania, Virginia and West Virginia will be among the first wave to get the new cards.

Approximately 60 million beneficiaries will receive the new cards by April 2019.

Dr. Michael Bradley, a family medicine provider and founder of Dover Family Physicians in Delaware, said he and his medical record system are prepared for the shift. He credits outreach efforts by the CMS for his preparedness.

“We’ve received several notices from CMS and have been prepared for some time,” Bradley said.

Since the beginning of the Medicare program, Social Security numbers have been used as the beneficiary identifier for administering services. The Medicare Access and CHIP Reauthorization Act required the CMS to remove the numbers from Medicare cards because of identity theft and fraud risks.

There was some concern last year from providers that they weren’t getting the guidance they needed on the change.

Without clear instructions on how to prepare for the change, physicians risk losing their ability to bill Medicare. Claims with the old numbers won’t be accepted starting in 2020. Practices also need to update their electronic health record systems to accept the new ID numbers.

A CMS spokesman said they took those concerns to heart and launched a multi-faceted campaign including having Medicare Administrative Contractors (MACs) mail letters to all Medicare fee-for-service providers with updates on the Medicare card, webinars, and conference calls. The agency also created multi-media material for clinicians to use to educate their patients.

“Our department of internal medicine is loading a CMS-produced video to its waiting room television screens and personnel in all primary care departments have been apprised of the changes to share with patients,” said Leah Payne, a spokeswoman at the Marshall University Joan C. Edwards School of Medicine and Marshall Health in West Virginia.

Despite the agency’s efforts, some specialists wonder if more could have been done to inform them of the change.

“We knew it was coming, but I don’t think I’ve heard anything about it in at least a year,” said Brian Ramos, chief operating officer of Capital Anesthesia Partners in Maryland and president-elect, Maryland MGMA.

Trump administration looking to lower price of health care plans next year

Trump Intends To Sign New Executive Order Allowing Increased Sales Of Less Expensive Healthcare Plans, Sources Say.

Published December 27, 2017 | Health Care | FOXBusiness

President Donald Trump is planning to sign a new executive order to make cheaper health care plans more accessible to consumers, a White House official confirmed to Fox News on Wednesday.

The Department of Health and Human Services and Department of Labor are considering rewriting rules so that consumers can buy cheaper plans without all of the ObamaCare mandates. The source told Fox News that the president is aiming to sign the new executive order by January.

Expanding access to less expensive health care offerings has been a consistent goal of the president’s. In October, Trump passed an executive order that directed the administration to look into a number of potential reforms, including allowing employers to form associations and obtain coverage across state lines, expanding the use of short-term limited duration insurance (STLDI) plans and expanding the use of Health Reimbursement Arrangements, or tax-free accounts that allow employers to reimburse employees for medical expenses. The goal of these reforms was to create “valuable and less costly options,” the administration said at the time.

Meanwhile, Republicans eliminated the unpopular individual mandate through the new tax reform bill, which was signed into law last week. The president has said he plans to address health care reform in the coming year, despite multiple failed attempts to repeal and replace the Affordable Care Act in 2017.

Health law sign-up deadline extended for some people

Trump Administration To Extend ACA Enrollment For Consumers Who Called Before Deadline.

WASHINGTON (AP) — After a rush of last-minute sign-ups, the Trump administration says it’s extending the deadline for some people to finish health insurance applications for next year under the Affordable Care Act.

Callers to the HealthCare.gov service center on Saturday morning got a recorded message saying “don’t worry” — if they’d called and left their phone number before the deadline, they’ll get a call back and still can enroll for 2018.

HealthCare.gov issued similar extensions previously under the Obama administration.

Although the deadline has passed for most consumers in the 39 states served by HealthCare.gov, several states running their own enrollment websites have longer deadlines.

Also, longer sign-up periods are available on HealthCare.gov for people in special circumstances, including those affected by this year’s hurricanes.

The HealthCare.gov call center is at 800-318-2596.

GOP ability to dismantle health law expires at month’s end

WASHINGTON (AP) — Senate Republicans will soon run out of time to rely on their slim majority to dismantle the Obama health law.

The Senate parliamentarian has determined that rules governing the effort will expire when the fiscal year ends Sept. 30, according to independent Sen. Bernie Sanders of Vermont, the ranking member of the Senate Budget Committee. The rules allow Republicans to dismantle President Barack Obama’s health care law with just 51 votes, avoiding a filibuster.

“Today’s determination by the Senate parliamentarian is a major victory for the American people and everyone who fought against President Trump’s attempt to take away health care from up to 32 million people,” Sanders said in a statement. Sanders heads up Democrats on the budget panel and took the lead in the arcane arguments before the parliamentarian, who acts as the Senate’s nonpartisan referee.
Republicans control the Senate 52-48 and were using the special filibuster-proof process in the face of unified Democratic opposition. Now, if Republicans can’t revive the repeal measure in the next four weeks, they will be forced to work with Democrats to change it.

Senate Republicans pulled the plug on their Obamacare repeal effort in July, after falling short in a key vote. It has languished since, despite President Donald Trump’s call for senators to keep trying.

The ruling by Parliamentarian Elizabeth MacDonough is likely the final nail in the coffin, since it means Republicans would have to revive the effort and wrap it up in just a few weeks. Congress returns to Washington next week to face a packed agenda including Harvey aid, a temporary government-wide funding bill, and the need to raise the government’s borrowing authority to prevent a default on U.S. payments and obligations.

The bitter battle – and the struggle among Republicans – over health care consumed the early months of Trump’s presidency. It wasn’t immediately clear whether Friday’s announcement might prompt Republicans to make one final push on health care.

The focus may instead shift to a bipartisan effort by Sen. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., to shore up the insurance market. That effort faces major obstacles, too.

Many in the administration and its allies in Congress are eager to turn the focus to overhauling the tax code.

4 Million Americans Paid $2.8 Billion in Obamacare Penalties Through April 2017

Fewer Americans paid penalty after Trump’s executive order suggested IRS could grant exemptions

BY: Ali Meyer
August 22, 2017 1:00 pm

Four million Americans paid $2.8 billion in Obamacare penalties for not having health insurance on target year 2016 returns through April 27, 2017, according to data from the Taxpayer Advocate Service, a division of the Internal Revenue Service.

Beginning in 2014, the Affordable Care Act’s individual mandate required Americans to purchase health care coverage or pay a penalty to the IRS.

At that time, individuals without insurance had to pay either a flat fee of $95 or 1 percent of the household’s adjusted gross income in excess of the threshold for mandatory tax filing, whichever was greater. In 2016, those numbers increased to a flat fee of $695 or 2.5 percent of the gross income.

The report finds that this number increased again, as the 4 million individuals paid an average penalty of $708.

On President Donald Trump’s first day in office, he signed an executive order to minimize the economic burden of the Affordable Care Act, which meant the IRS could waive the individual mandate penalty.

“The order stated that the agencies should exercise all authority and discretion to waive, defer, grant exemptions from, or delay the implementation of any requirement of the Act that would impose burden,” the taxpayer advocate explains.

This means individuals were allowed to either forego checking a box that indicated they had health care coverage, complete a form to show they were exempt from the penalty, or self-assess a penalty on their return. These types of tax returns are described as “silent” returns by the IRS.

Less than a month after Trump’s executive order was signed, the IRS decided to begin rejecting these “silent returns.”

According to the taxpayer advocate’s data, the number of people who decided to pay a penalty declined 28.6 percent over the year. In target year 2015 through April 28, 2016, there were 5.6 million Americans who paid the penalty. In target year 2016 through April 27, 2017, 4 million Americans paid the penalty.

In addition, the number of silent returns increased by 200,000 in a year. In target year 2015, there were 7.8 million silent returns and in target year 2016 that increased to 8 million.

“The IRS is in the process of assessing various options to address silent returns filed in past as well as future filings, including the reinstatement of the plans to reject electronically filed silent returns, the issuance of educational or soft notices, and the issuance of penalty assessment notices,” the taxpayer advocate says.

“The National Taxpayer Advocate supports any efforts to reinstate plans to reject electronically filed silent returns as well as issue educational and soft notices,” the report states. “These options would help the taxpayer avoid future compliance problems.”

ACA’s Bare County Problem Largely Resolved As Centene Agrees To Sell Plans In Nevada.

Obamacare’s Bare County Problem Looks Mostly Solved, for Now

A few months ago, it looked as if large swaths of the country might end up without any insurers willing to sell Obamacare insurance in 2018. But in the last few weeks the “bare county” problem, which President Trump had cited as a sign the markets were failing, has nearly solved itself.

On Tuesday, Gov. Brian Sandoval of Nevada announced that Centene would offer insurance in 14 rural counties of Nevada that had been bare. That leaves only two counties in the country without insurers saying they will sell coverage; fewer than 400 Obamacare customers live in those counties.

The bare county problem had been a sort of unplanned policy hole in Obamacare, which depends on private companies to provide insurance to people who don’t get coverage through a government program or work. The federal government provides subsidies on a sliding scale to help middle-income Americans pay their premiums, but it doesn’t do anything to force insurers to offer coverage if they don’t want to. For a while, it seemed there would be a smattering of mostly rural places in the country where no company saw a reason to participate in 2018.

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