On May 30, 2012, the Internal Revenue Service (IRS) issued a Notice on the new $2500 Limit on Health Care Flexible Spending Accounts (FSAs). The Notice clarifies that this provision of the Patient Protection and Affordable Care Act (PPACA) applies to plans beginning after December 31, 2012. The Notice also confirms the deadline for amending cafeteria plan documents and offers new relief for inadvertent excessive contributions among other important points. The limit applies on an employee-by-employee basis rather than per household, so spouses may each contribute up to $2500 to separate FSAs. In other words, contribution limits could be up to $5000 per household for families where each spouse contributes separately. While the law uses the term “taxable year,” the IRS is interpreting this to mean the plan year since salary reductions are made based on the plan year. While the $2500 limit is effective the first plan year beginning after December 31, 2012, plans have until the end of 2014 to amend their cafeteria plan documents retroactively to the effective date. Amendments may be expressed as a maximum dollar amount or by another method of determining maximum dollar amounts of salary deduction contributions. Here are some additional important points provided in the Notice: * For plans which have a grace period, any unused amounts that are carried over into the grace period will not count against the $2500 limit for the following plan year * The limit does not include employer contributions unless employees elect to receive the amount as cash or as a taxable benefit * If a plan has a short plan year beginning after 2012, the $2500 limit must be prorated for the number of months in the short plan year * The $2500 limit may be indexed annually for the cost of living adjustment (COLA) * Plans are not permitted to change from a calendar year to a fiscal year to delay application of the limit * Should salary reductions mistakenly exceed the $2500 limit, the plan may still be compliant as long as the terms of the plan apply uniformly to all participants and the error results from a reasonable mistake by the employer (or agent) and is not due to willful neglect. Excessive contributions must be paid to employees and reported as taxable wages for the taxable year in which the correction is made. Use-it-or-Lose-it Rule Specific comments are also requested on potential modifications to the “use-it-or-lose-it” rule, whereas employees who currently do not use all of their elected payroll deductions within their plan year (and applicable grace period) forfeit those dollars back to the plan. The IRS is considering whether this rule should be modified to offer administrative flexibility, and how such adjustments might interact with the $2500 limit. Comments are due to the IRS by August 17, 2012.

Obama Signs 1099 Repeal Bill

The AP (4/15) reports, "President Barack Obama has signed the first rollback of last year's healthcare law, a bipartisan repeal of a burdensome tax-reporting requirement that's widely unpopular with businesses."

The Washington Post (4/15)reports, "The move marked the first successful effort by Congress to repeal a portion of Obama's signature health-care legislation." Last week, the Senate "voted 87-to-12 to repeal the 1099 provision. The House passed the measure in March on a bipartisan 314-to-112 vote."

The White House announced that the President had signed the bill into law, and said that the measure "repeals the expansion in the Affordable Care Act of requirements for businesses to report information to the Internal Revenue Service on payments for goods of $600 or more annually to other businesses and increases the amount of overpayment subject to repayment of premium assistance tax credits for health insurance coverage purchases through the Exchanges established under the Affordable Care Act."

The High Cost of Health Care

How much are we spending on healthcare? Before we can look at why insurance premiums are going up, we should take a look at how much the U.S. spends on health care.

In 2007, we spent $2.2 trillion on health care
In 2010, we spent $2.6 trillion on health care
In 2018, we are projected to spend $4.4 trillion on health care.

Health care costs and premiums go hand-in-hand. If cost go up, so do premiums.

Weight Loss, Stress Reduction Top Wellness Concerns

More than 33% of employees cite weight loss as a primary health concern in 2011, according to a ComPsych Corporation poll, while 23% of employees say stress is their top health issue.

"With more and more individuals slipping into the overweight category, it's no surprise that weight management is a top issue this year," says Dr. Richard A. Chaifetz, chairman and CEO of ComPsych. "Stress levels are also unusually high, given the additional workloads many have taken on during a recovering economy.

"Workplace wellness programs are well-suited to help employees lose weight and also address stress, which can result in improved productivity and lower health and disability costs for the organization.”

States Say Administration Seeking Stay Of Decision Against Healthcare Law

Politico (2/24) reports, "The 26 states who came out on the winning end of a federal court decision invalidating the healthcare reform law say an Obama administration request for clarification is nothing but 'wishful thinking.'"

Politico says, "The administration has asked US District Judge Roger Vinson to clarify his order invalidating the Affordable Care Act." Yet, "in a brief filed Wednesday night, the states say the administration is effectively seeking a stay of Vinson's order -- and that it hasn't met the standards for one."

The states wrote in their brief, "If the Government was not prepared to comply with the Court's judgment, the proper and respectful course would have been to seek an immediate stay, not an untimely and unorthodox motion to clarify,"

The Hill (2/24) reports in its "Healthwatch" blog. Since Vinson made his "ruling, some states have declared the reform law effectively dead unless an appellate court reverses the decision." Notably, "Florida has returned federal grants for implementation, while Alaska has turned down another."

Survey: What Doctors Want to Tell Patients (And Vice Versa)

By Katherine Hobson

The March issue of Consumer Reports features the results of two surveys — one, of more than 49,000 of the magazine’s subscribers and another of 660 primary-care physicians.

Some of the key points:

- Physicians’ top complaint about their patients: noncompliance with advice or treatment recommendations. Some 37% said it affected their ability to deliver the best care by “a lot.”

- On the issue of respect and appreciation, 70% of doctors said they were getting less of it from patients than when they started practicing. For patients, meantime, the more they reported being treated respectfully and listened to, the more satisfied they were with their physician.

- Most patients surveyed — 79% — said their doctors were able to help them with pain, discomfort or disability arising out of a condition. But only 37% of physicians said they were very effective at achieving those ends, with another 60% saying they were somewhat effective.

- Doctors said insurance paperwork topped their list of things that interfere with their ability to provide the best possible care. Financial pressure was No. 2.

- Some 80% of physicians said it would be helpful for patients to bring a family member or friend to a visit in order to make sure important information is recorded and retained; only 28% of patients said they did so. And while 89% of doctors said it would help patients to keep an informal record of treatments, tests, procedures, drugs and changes in conditions, 33% of patients reported routinely doing so.

- Patients are big online research fans, with 61% saying they had turned to the internet for information on their medical care. Doctors are not big fans of this kind of research, with nearly half saying it helps very little or not at all, and 8% saying it was very helpful.

High-Risk Pool Enrollment Rises, But Lags Behind Expectations

The Washington Post (2/11, Goldstein) reports, "More Americans have been signing up for special health plans designed for people with medical problems that caused them to be spurned by the insurance industry, according to new government figures," yet "enrollment continues to lag significantly behind original predictions."

HHS data released on Thursday show that the "number of people who have bought the plans, known as high-risk pools, has increased from slightly fewer than 8,000 nationwide as of early November to nearly 12,500 as of the beginning of this month."

The Hill (2/11, Millman) reports in its "Healthwatch" blog, "The Medicare actuary had originally predicted the new pools...would enroll 375,000 people by the end of 2010, but high enrollment costs have frequently been cited for keeping people away. Asked about the discrepancy last month, Medicare actuary Rick Foster told The Hill the low enrollment is a 'surprise,' given that 'millions' are eligible for the coverage."

Notably, "HHS officials have the said low enrollment is typical for new federal health programs," and Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, said, "We are working every day to get the word out about this program, to find people who have been abandoned by the health insurance industry to get them the coverage they have been denied for so long."

FSBG Note: It's our opinion enrollment is so low due to the fact one has to be uninsured for 6 months in order to qualify. Our question...why?