by admin | Dec 26, 2021 | Employee Benefits
Employee benefits are a major bargaining chip for companies looking to attract talent. The problem is healthcare costs are skyrocketing, and it’s difficult for employers to offer the same level of coverage. Higher costs are either resulting in less coverage or smaller wages for employees.
Find out what’s happening with healthcare and recruitment, and get tips on what companies can do to stay competitive:
The Rising Costs of Healthcare
It’s no secret that healthcare costs have been increasing for years. According to the research, it will continue to increase. One study from the Peterson Center on Healthcare and the Kaiser Family Foundation (KFF) found that $3.8 trillion—or $11,582 per person— was spent on healthcare in 2019. By 2028, individual Americans will be spending around $18,000 on healthcare.
While the issue is complex, experts agree that the major factors in this spike include an aging population, a rise in chronic disease, and higher prices for medical services and drugs. Costs are rising so rapidly that insurers are increasing deductibles, not covering certain services, or applying caps. As a result, healthcare packages are playing a larger role when chosen candidates are deciding whether to accept a new job.
How Important Are Competitive Healthcare Packages?
As healthcare costs continue to rise, a new debate has emerged. Should employers or employees take more responsibility for covering healthcare?
One of two things are happening with workplace healthcare. Either employees are leaving their current position for a job with better healthcare coverage or their annual salary increases are being eaten up by higher healthcare premiums being passed on to employees.
A recent survey found that 42% of employees are thinking about leaving their current position because of inadequate benefits.
“The rising price of health care costs families thousands of dollars a year in foregone wages, out-of-pocket costs, and increased taxes,” said Josh Bivens, research director at the Economic Policy Institute, in an interview with MarketWatch.
He said the effect may not be apparent, but it’s one of the main reasons wages have remained stagnant. If you spot a number of paradoxes here, then you aren’t alone. Lower salaries won’t attract top talent, and passing on the costs of healthcare to current employees won’t retain them. This quandary for employers is compounded by the current labor shortage, which is often referred to as the Great Resignation.
What Can Companies Do?
It’s clear that healthcare is important to job candidates. To attract new talent, companies should revolutionize the way they treat wellness in the workplace.
Promoting health and wellness initiatives not only improves employee morale and decreases absenteeism, but a healthier workforce is less likely to use their insurance. This may eventually equate to lower premiums.
Another easy way to curb costs is by communicating with employees about what plans are available. Health insurance is often a complex topic, and some employees may accidentally choose the wrong plan because they don’t understand the difference.
Proactively highlighting available services can assist employees before a medical issue spins out of control. Mental health services are an example of this. Letting employees know about Employee Assistance Programs or low-cost telehealth options could offer help before a more serious intervention is needed.
There are many options available for companies to make their benefit packages more competitive to attract top talent. Some companies are considering Health Savings Accounts or HSAs that help employees pay medical bills while enrolled in cheaper, high deductible plans.
Direct Primary Care is another technique being used by companies to control costs. DPC allows employees to pay fixed monthly, quarterly, or annual fees to cover primary care, consultations, care coordination, and comprehensive care management. Not only does DPC result in cost-savings, but it fosters a better relationship between patient and doctor.
Leveraging Your Benefits
Even though healthcare costs continue to rise, it’s possible for companies to control costs by promoting wellness initiatives and helping employees select the best benefit package for their needs.
Being proactive with healthcare and making smart financial decisions can keep healthcare prices reasonable, and ensure that companies will be able to attract talent.
By Mckenzie Cassidy
Orginally posted on HR Exchange Network
by admin | Dec 23, 2021 | IRS
On November 4, 2021, the Internal Revenue Service (IRS) released Notice 2021-61 announcing cost-of-living adjustments affecting dollar limits for pension plans and other retirement-related items for tax year 2022. Many pension plan limits will change next year because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. Other items, however, will not increase for 2022. Here is a summary of the limits for 2022.
For 401(k), 403(b), and most 457 plans and the federal government’s Thrift Savings Plans:
- The elective deferral (contribution) limit increases from $19,500 for 2021 to $20,500 for 2022.
- The catch-up contribution limit for employees aged 50 and over who participate in these plans will stay the same at $6,500 for 2022.
For individual retirement arrangements (IRAs):
- The limit on annual contributions will not change for 2022. It remains $6,000.
- The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment so it remains $1,000 for 2022.
For simplified employee pension (SEP) IRAs and individual/solo 401(k) plans:
- Elective deferrals increase to $61,000 for 2022, based on an annual compensation limit of $305,000 (up from the 2021 amounts of $58,000 and $290,000).
- The minimum compensation that may be required for participation in a SEP remains unchanged at $650.
For savings incentive match plan for employees (SIMPLE) IRAs:
- The contribution limit on SIMPLE IRA retirement accounts increases from $13,500 for 2021 to $14,000 for 2022.
- The SIMPLE catch-up limit remains unchanged at $3,000 for 2022.
For defined benefit plans:
- The basic limitation on the annual benefits under a defined benefit plan increases from $230,000 for 2021 to $245,000 for 2022.
Other items:
- The threshold for determining “highly compensated employees” increases from $130,000 for 2021 to $135, 000 for 2022.
- The threshold for officers who are “key employees” in a top-heavy plan increases from $185,000 for 2021 to $200,000 for 2022.
- In a separate announcement, the Social Security Administration stated that the 2022 taxable wage base will increase to$147,000, an increase of $4,200 from the 2021 taxable wage base of $142,800. Thus, the maximum Social Security tax liability will increase for both employees and employers.
The IRS announcement is needed information for employers that sponsor 401(k) plans and other types of retirement and savings plans. For those interested in health and welfare plans, the IRS will release a separate announcement on the 2022 benefit limits for health flexible spending accounts (HFSAs) and transit benefit programs which we’ll cover separately on this blog.
By Kathleen A. Berger, CEBS
Originally posted on Mineral
by admin | Dec 15, 2021 | IRS
The Internal Revenue Service (IRS) announced annual inflation adjustments for more than 50 tax provisions, including an increase in voluntary employee contributions to employer-sponsored healthcare flexible spending arrangements (HFSAs) to $2,850 for plan years beginning in 2022, up from the 2021 limit of $2,750.
For HFSAs that include a carryover provision, up to $570 may be carried over from the 2022 plan year to the next plan year. Note that HFSAs had the option of allowing an unlimited carryover for the 2021 plan year due to federal COVID-19 relief provisions. For unused HFSA funds at the end of the 2022 plan year, however, the plan cannot allow more than $570 to be carried over for use in the following year.
The IRS also announced an increase in the 2022 monthly limits for qualified transportation fringe benefits under Code § 132(f). For transportation in a commuter highway vehicle and mass transit passes, the limit will be $280 (up from $270 this year). The separate monthly limit for qualified parking also will increase to $280.
Details of this announcement can be found in Revenue Procedure 2021-45.
By Kathleen A. Berger, CEBS
Originally posted on Mineral
by admin | Dec 7, 2021 | Hot Topics
“Children laughing, people passing, meeting smile after smile” stirs happy memories of singing Christmas carols for some, but for others, the holidays can be the most stressful and loneliest time of the year. The holidays often present a dizzying array of demands – shopping, baking, and entertaining to name a few. For those dealing with mental health conditions like depression or or anxiety, the holidays can be even harder.
Holiday depression can be misinterpreted as being nothing more than the winter blues. So, when it comes to the holidays, people are more focused on their physical health issues instead of their mental health issues. They are more interested in losing weight than taking care of their mental health. Being unaware that there is a problem can make holiday depression evolve into major depression. Counseling and medication are good avenues to seek if you are living with symptoms of depression.
Here are 9 tips that you can use to help you with holiday depression:
- Be realistic – Holidays change just as people change. Kids grow older, people move, and new people will become a part of your life. Focus on those connections, new traditions and remember past holidays with fondness while still enjoying the one right in front of you.
- Schedule Some Down-Time – Even 15-20 minutes a day to enjoy some quiet time, take a bath, listen to music or read a book can do wonders for your stress levels. Plus, it’s ok to say no: you don’t have to attend every party or family event.
- Don’t Isolate Yourself – Look for ways that you can enjoy social connections, even if you aren’t able to go home for the holidays. If you are feeling lonely, ask a friend to come over for a heart to heart or volunteer for something that interests you.
- Drink Only in Moderation – Alcohol is a depressant and can exacerbate negative feelings.
- Exercise Regularly – While hitting the gym can be tough when you are stressed and busy, try going for a short walk. Did you know that exercise can help relieve symptoms of depression?
- Focus on the Positives – Today is a gift. That is why it’s called the present! Being positive and practicing gratitude has a strong positive impact on psychological well-being. It increases self-esteem, enhances positive emotions and makes us more optimistic.
- Keep Expectations Manageable – Try to set realistic goals for yourself and your family. Pace yourself. Organize your time and make a list and prioritize the important activities.
- Let People Close to You Know What’s Going On – Don’t try to hide your holiday depression from your friends and family. Hiding your problem can make your mental health worse. Instead, be honest with them and let them know what you are going through and make sure you let them know that you don’t expect them to make it better.
- Seek Professional Help if You Need It – You may find yourself feeling persistently sad or anxious, unable to sleep, unable to face routine chores or irritable and hopeless despite your best efforts. If these feelings last for a while, talk to your doctor or a mental health professional.
Avoid beating yourself up if you are not full of the “joy of the season.” With some planning, self-care and social connections, it’s possible to tackle depression around the holidays and still enjoy the season. Be gentle with yourself, have realistic expectations, and don’t abandon your healthy habits just because it’s the holiday season. By actively working to manage your mental health, you will be able to make the best of the holidays!
If you are experiencing these symptoms over a period of several weeks, you may be depressed. Talking with a mental health professional or taking a mental health screening test can help you understand how well you are coping with recent events. Seek help.
by admin | Nov 30, 2021 | Flexible Spending Accounts
The end of the year is drawing near which may mean you have some extra money to spend.
No, you didn’t read that wrong. Many Americans have money in their Flexible Savings Accounts (FSAs) that they need to use up before the end of the year. FSAs provide the benefit of putting pre-tax money aside which optimizes your money. Your FSA is set up through your employer and everyone’s rules are a little different. However, most plans run January 1 – December 31. Some companies allow their employees to roll over a set amount into the new year. Checking with your HR department will help you maximize your hard-earned money.
Typically, FSA money has to be used by the end of the year but the COVID-19 relief bill gets you one more year to spend. That means you have until December 31, 2021 to spend FSA money earmarked for last year. The extension also applies for your 2021 FSA money – the credit will be available until the end of 2022.
All funds remaining in the account at the end of the grace period are forfeited according to the “use-it-or-lose-it” rule, which requires all remaining funds in an FSA to be forfeited at the end of the plan year.
If you have FSA money to spend, we’ve compiled a list of some ways to use up your hard-earned FSA dollars that you may not have thought possible:
Fill Your Medicine Cabinet
You can once again purchase over the counter medication with FSA money thanks to the CARES Act. You can stock up on first aid kits or other items that don’t require a prescription such as:
- Bandages
- Heating pads
- Contraceptives
- Fertility and Pregnancy Tests
- Sleep aids such as Melatonin or a sleep mask
- Motion sickness medication
- Headache medicine
- Antacids or heartburn medication
- Menstrual products
- Contact Solution
- Allergy medication
- Acne creams and cleansers
Alternative Therapies
Under IRS law, certain alternative therapies are eligible for reimbursement. Acupuncture and chiropractic care, alternative medicinal treatments, and herbal supplements are a great way to use up your funds for the year and get a little cash back when you most need it.
Dental
Dental benefits often work differently than medical coverage. According to the American Dental Association, this benefit is often capped annually – generally between $1,000 and $2,000. If you have unused funds remaining in your FSA, now may be the time to schedule a last-minute appointment with your dentist, especially if you might need serious work down the road. This way, you can use up the funds remaining in your account by year-end and reduce your out-of-pocket expense next year.
Prescription Refills
Refilling your prescription medications at year end are a great way to use up your funds in your medical FSA. Take inventory of your prescription drugs, toss out expired ones, and make that call for a refill to your doctor or pharmacy.
Medical Equipment and Supplies
Medical equipment and supplies are eligible for reimbursement under a medical FSA. Walking aids like canes, walkers and crutches, blood pressure monitors, thermometers, and joint braces are just a few. Please note that some will require a note or prescription from your doctor.
Mileage and Other Healthcare-Related Extras
Traveling to and from any medical facility for appointments or treatment for yourself or a dependent are eligible for reimbursement under your FSA. This not only includes traveling by your own vehicle, but also by bus, train, plane, ambulance service and includes parking fees and tolls. However, transportation expenses are not eligible with a Dependent Care Flexible Spending Account (DCFSA).
Family Planning
You can put your FSA dollars to work if you are a new or soon-to-be mom on products such as pregnancy tests, fertility monitors, prenatal vitamins and breastfeeding supplies. On the flip side, condoms and other contraceptives are also FSA eligible.
Nicotine Cessation Products
If you are trying to quit smoking, you can use your FSA funds toward nicotine gum, patches, lozenges, inhalers and nasal sprays.
Dependent Care
If you have opted to contribute to a DCFSA, you can get reimbursed for day care, preschool, summer camps and non-employer sponsored before and after school programs. In addition, funds contributed to this type of FSA can be used for elderly daycare if you’re covering more than 50% your parent’s maintenance costs.
Ancestry Kits with Health Reports
Interested in learning about your heritage and how your DNA can affect your health? You are in luck! Ancestry kits like 23andMe that include health reports are typically considered FSA eligible to be reimbursed approximately 50%.
People often don’t use their FSA out of fear that they need to save it for later. However, every year $400-500 million in FSA funds is forfeited. Lost cash is never a good thing. If you still have leftover funds, consider going to the FSA Store where you can find hundreds of eligible items and pay for them with your account dollars without ever leaving your house.
This list is not an exhaustive list of ways to spend your FSA money. Check with your HR department and insurance agent if you have questions about qualified expenses.
