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Brown & Brown — Conference Presentation (March 2022)
29 slides from Brown & Brown's conference presentation, March 2022
Slide 1: This Webinar Will Start Momentarily
This Webinar Will Start Momentarily. Thank you for joining us.
Slide 2: HSAs and Their Tricky Rules
HSAs and Their Tricky Rules Presented By: Nick Karls and Amanda Olimb Regulatory and Legislative Strategy Group
Slide 3: Disclaimer
DISCLAIMER Brown & Brown, Inc. and all its affiliates, do not provide legal, regulatory or tax guidance, or advice. If legal advice counsel or representation is needed, the services of a legal professional should be sought. The information in this document is intended to provide a general overview o
Slide 4: Health Savings Account (HSA)
Health Savings Account (HSA) What is an HSA? What is it for? Are there any special Tax-exempt trust or May be used for eligible requirements? custodial account owned medical expenses of the Must be covered by a high by the individual individual, spouse and deductible health plan dependents (HDHP) as
Slide 5: Potential ACA Penalties (Taxes)
Potential ACA Penalties (Taxes) W H O I S E L I G I B L E T O E S TA B L I S H A N H S A ? Anyone who is: • Covered by an HDHP Other health insurance or • Not enrolled in Medicare group health plans do not • Watch out for retroactive enrollment due to events like the start of include separate dental
Slide 6: High Deductible Health Plan
High Deductible Health Plan HDHP Self-Only Coverage Family Coverage For 2022, self-only HDHP coverage must have an For 2022, family HDHP coverage must have an annual deductible of $1,400 and an out-of-pocket annual deductible of $2,800 and an out-of-pocket maximum of no more than $7,050 maximum of n
Slide 7: ACA Impact on HSAs
ACA Impact on HSAs H S A Q U A L I F I E D H D H P O U T- O F - P O C K E T M A X I M U M I N T E R A C T I O N W I T H T H E A C A’ S O U T- O F - P O C K E T M A X I M U M HSA qualified HDHP out-of-pocket HHS final rule states that the annual limitation on cost-sharing for maximums for 2022 self-o
Slide 8: High Deductible Health Plan
High Deductible Health Plan HDHP Self-Only Coverage “Catch-Up” Contributions Maximum contribution of 2022 = $3,650 Age 55 and older by the end of the tax year = $1,000 Source of Contributions Family Coverage Employer, or employee, or both Maximum contribution of 2022 = $7,300 (or anyone else) BROWN
Slide 9: Special Contribution Rule
Special Contribution Rule LAST “MONTH” RULE “ • This also applies when an employee switches from individual to family coverage An individual may contribute the • If the employee is enrolled in the family tier as of December entire annual limit when first 1 of the applicable year and remains HSA elig
Slide 10: Multiple HSAs in the Family
Multiple HSAs in the Family • If both spouses of a married couple are HSA eligible, and either spouse is covered by family HDHP coverage (other than self-only coverage), then both are treated as having family HDHP coverage and split the family maximum contribution between them • They can allocate co
Slide 11: HSA Funds
HSA Funds HSA funds may be invested and can grow HSA funds may be used for “qualified” out- on a “tax-qualified” basis of-pocket medical expenses (generally not • Funds can roll over from year-to-year and you medical premiums) keep the money even if you change jobs • Code 213(d) – medical expenses i
Slide 12: HSA Distribution Rules
HSA Distribution Rules TA X Q U A L I F I E D • If taken for qualified medical expenses • If non-qualified expenses, income tax and 20% penalty apply • May only be used for expenses incurred on or after the date the HSA was established Distributions for non-qualified expenses for age 65 or older: or
Slide 13: Qualified Medical Expenses
Qualified Medical Expenses EXAMPLES • Prescription and OTC drugs • Insulin (with or without a prescription) • Dental and vision care • Select insurance premiums: • Most medical care that is subject to your • COBRA deductible • Qualified long-term care insurance • Copays • Health insurance premiums p
Slide 14: Non-Qualified Medical Expenses
Non-Qualified Medical Expenses EXAMPLES • Insurance premiums (other than the exceptions listed on the previous slide) • Surgery purely for cosmetic reasons • Expenses covered by another insurance plan • General health items such as tissues, toiletries and hand sanitizer BROWN & BROWN | 14
Slide 15: Interaction of Health FSAs with HSAs
Interaction of Health FSAs with HSAs H E A LT H F L E X I B L E S P E N D I N G A R R A N G E M E N T ( H E A LT H F S A ) • A general purpose health FSA will reimburse all otherwise unreimbursed, out-of-pocket 213(d) (medical) expenses (except for individual premiums) • Because it provides for reim
Slide 16: Interaction of Health FSAs with HSAs
Interaction of Health FSAs with HSAs DESIGNING AN HSA COMPATIBLE HEALTH FSA Limited Purpose Health FSA Post-Deductible Health FSA Provides reimbursement for dental and vision Provides reimbursement after the minimum annual expenses only deductible has been satisfied • The health FSA could reference
Slide 17: Health FSA Grace Period Impact on HSAs
Health FSA Grace Period Impact on HSAs H E A LT H F L E X I B L E S P E N D I N G A R R A N G E M E N T ( H E A LT H F S A ) • The health FSA may a have grace period of up to 75 days following the end of the plan year • Claims incurred during the grace period may be reimbursed from the prior plan ye
Slide 18: Health FSA Grace Period Impact on HSAs
Health FSA Grace Period Impact on HSAs DESIGNING AN HSA COMPLIANT GRACE PERIOD • The plan may be amended (before the end of the plan year) to provide a mandatory limited purpose health FSA where only dental and vision care expenses incurred during the grace period will be reimbursed • This must appl
Slide 19: Health FSA Carryover Impact on HSAs
Health FSA Carryover Impact on HSAs H E A LT H F L E X I B L E S P E N D I N G A R R A N G E M E N T ( H E A LT H F S A ) The health FSA may include carryover of up Some employers allow participants to waive to $570 (indexed for inflation) into the next their carryover to avoid this issue plan year
Slide 20: Interaction of HRAs with HSAs
Interaction of HRAs with HSAs H E A LT H R E I M B U R S E M E N T A R R A N G E M E N T ( H R A ) A health reimbursement arrangement (HRA) provides for reimbursement of 213(d) (medical) expenses • 100% employer dollars • Claims are typically paid from the employer’s general assets If the HRA is “ge
Slide 21: Interaction between HRAs and HSAs
Interaction between HRAs and HSAs DESIGNING AN HSA COMPATIBLE HRA Limited Purpose HRA Post-Deductible Health HRA Retirement HRA Provides reimbursement Provides reimbursement after the Provides reimbursement for dental and vision minimum annual deductible has after the individual has expenses only be
Slide 22: Other Coverage Issues
Other Coverage Issues Telemedicine On-site Medical Clinics EAPs If an individual can receive If an individual can receive medical Similar to telemedicine, if an significant medical benefits benefits with no-cost the on-site individual can receive significant with no-cost, the availability medical cl
Slide 23: Interaction of HSAs with Cafeteria Plans
Interaction of HSAs with Cafeteria Plans EMPLOYEE HSA CONTRIBUTIONS May be made pre-tax through the Employees must be allowed to change their employer’s cafeteria plan elections on a monthly basis without a • This must be listed as an available benefit corresponding change in status (pre-tax HSA con
Slide 24: Interaction of HSAs with Cafeteria Plans
Interaction of HSAs with Cafeteria Plans C O M PA R A B L E C O N T R I B U T I O N R U L E • Comparable contribution rules require employer • May differentiate based on the following contributions to be the same for comparable classifications only: participating employees (based on HDHP coverage •
Slide 25: Mid-Year Change from Family to Single HDHP
Mid-Year Change from Family to Single HDHP W H AT I S T H E M A X I M U M A N N U A L C O N T R I B U T I O N ? Family coverage from January – September and then changed to single the calculation is (2022 amounts):* 9/12 x $7,300 = $5,475 3/12 x $3,650 = $912.50 Maximum Contribution Limit (rounded t
Slide 26: HSA Corrections
HSA Corrections M I S TA K E S H A P P E N What happens when ineligible For those that lose eligibility: contributions are made to an HSA? • Curative distribution can be used if excess • It appears the IRS differentiates between those contribution and net income attributable to an excess that were n
Slide 27: HSA Corrections
HSA Corrections M I S TA K E S H A P P E N What about contributions in excess of the statutory maximum or contributions made due to an administrative error? • Curative distribution can be used if excess contribution and net income attributable to an excess contribution are distributed before the acc
Slide 28: HRCI and SHRM Credits
HRCI and SHRM Credits This Program, ID No. 588933, has been approved for 1.00 HR (General) recertification credit hours toward aPHR™, aPHRi™, PHR®, PHRca®, SPHR®, GPHR®, PHRi™ and SPHRi™recertification through HR Certification Institute® (HRCI®). Brown & Brown is recognized by SHRM to offer Professi
Slide 29: Find your solution at BBrown.com
Find your solution at BBrown.com DISCLAIMER: Brown & Brown, Inc. and all its affiliates, do not provide legal, regulatory or tax guidance, or advice. If legal advice counsel or representation is needed, the services of a legal professional should be sought. The information in this document is intend