Important announcement regarding FSA policy

Moments ago, the Department of Treasury issued a press release and informational fact sheet announcing a major policy change relating to flexible spending accounts (FSAs) that has many positive implications for all FSA constituents – including administrators, employers and participants. The Department of Treasury has modified its FSA “use-it-or-lose-it” provision to allow a limited rollover of FSA funds. Details are as follows: • Effective in plan year 2014, employers that offer FSA programs will have the option of allowing participants to roll over up to $500 of unused funds at the end of the plan year. • Effective immediately, employers that offer FSA programs that do not include a grace period will have the option of allowing employees to roll over up to $500 of unused funds at the end of the current 2013 plan year. From my perspective, the major benefits of this new “rollover” provision include: • Eliminating the most significant impediment to FSA adoption (use-it-or-lose-it) – creating significant upside for FSA adoption growth, which has been limited over the past several years • Enhancing healthcare options and offering greater funds protection for FSA participants, particularly lower & middle income workers who are highly concerned about cash flow • Minimizing risk for constituents with unpredictable healthcare expenses, such as those dealing with chronic conditions that may necessitate high-cost procedures/services with ambiguous timing or medical necessity • Curbing wasteful & potentially unnecessary end-of- year spending by FSA participants seeking to avoid losing unused funds

The week in review October 11, 2013

Exchanges continue to work througth some initial growing pains, as the government teeters ever closer to default; while a pair of House hears seeks to shed some light on implementation efforts, and Medicare Advantage starts to feel the pinch. 
Exchange Marketplace is heading into its second week of open enrollment, the health insurance exchange marketplace continues to experience some gowing pains.  While polling suggests that American's initial impressionof the new marketplace has left some room for improvement, the Administrationcontinues to urge patience, attributing the early hiccups to overwhelming demand. 

Given the changes that continue to reverberate across the health care reform landscape, it's hardly surprising that few, if any, corners of the health care world should escape completely unscathed.  Already we've seen stakeholders-large employers to small businesses, hospitals and providers, state and local governments-step gingerly into this new landscape, uncertain of what les ahead. And while we already know the havoc that certain provisions threaten to wreak if ultimately unacted, we're only now starting to see some of the damage from what's already been put in place.  One such program, Medicare Advantage (MA), some believe now finds itself at the forefront of how these changes could ripple out.  Dispite its high satisfaction rate amongst beneficiaries and better reported quality of care, a new study from health care consulting firm, Avalere Health, projects that MA plans will decreases by 5.3% in 2014, amidst continued payment reductions under the health care low, monifications to the risk adjustment model my the Centers for Medicare & Medicaid Services (CMS) and the application of the health insurance tax (HIT).  

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