Overview: Employers use health care benefits as a means to attract and retain good employees. These benefits are generally viewed by employees as an important part of their total compensation package.
Typical benefit packages generally include coverage for medical and prescription benefits, but many employers provide more comprehensive benefit programs that include coverage for dental and vision benefits as well. Given the tax advantages, flexible spending accounts (FSAs) continue to be a popular choice for employees.
Rising health care costs continue to be a concern, and employers are on the lookout for ways to manage this cost. Educating employees to help them make informed benefit choices suited to their individual needs provides employers with a means to start controlling costs. The continuing movement toward consumer driven health care can help employees get the care they need while making them more knowledgeable, engaged consumers.
Trends: Change is the new norm in the landscape of health benefit plans. Health Care Reform poses significant challenges for HR professionals, and its requirements affect how both employers and employees view health benefit plans.
Author: Tracy Morley, SPHR, Legal Editor
Updated to reflect IRS guidance on qualified small employer HRAs, effective November 20, 2017.
The IRS has issued proposed regulations that confirm the position it took in Notice 2015-87 with regard to unconditional opt-out payments - payments made to employees who forgo group health benefits, which increase the amount of their monthly premium by the amount of the payments. The proposed regulations, which also cover eligible conditional opt-out payments, would take effect for plan years beginning in 2017.
Employers seeking to advise employees who is eligible to participate in medical and dental insurance, whether and to what extent coverage may extend to spouses and other family members and when benefit selections should be made should consider including this model policy statement in their handbook.
HR guidance on managing health plans in light of increased costs and health care reform.