by admin | Jul 25, 2022 | Blog
A limited-purpose FSA (LPFSA) is a Health Savings Account (HSA) eligible FSA plan that allows you to set aside pre-tax dollars for dental, vision, and orthodontia expenses for you and your dependents, even if they are not covered under your primary health plan. The Limited Purpose FSA covers these eligible expenses, tax-free while your HSA covers eligible medical expenses. It’s a great way to save on HSA dollars – especially if you choose to use your account to invest.
There is an abundance of benefits by enrolling in a LPFSA, notably:
- At the outset of the plan year, your LPFSA is pre-funded, and your full contribution amount is immediately available for use.
- In addition to your HSA contributions, you are able to set aside additional LPFSA tax-free contributions, up to $2,850 in 2022.
- Preserve HSA funds for other purposes, like investing or saving for retirement.
- Money contributed to a limited-purpose FSA is tax-free when it’s spent on eligible dental, vision, and orthodontia expenses, including dental exams, x-rays, vison exams, and much more.
by admin | Jul 19, 2022 | Blog
Last month’s U.S. Supreme Court ruling, which overturned the constitutional right to abortion (Roe v. Wade), has left thousands of women across the country unsure of where to find appropriate care and abortion expenses.
Below is an overview of the recent changes to employee benefits in lieu of the ruling. For a full explanation, please read our latest handout.
Medical care expenses for individuals plus increased mileage rate
For individuals who seek medical treatment in a city or a location hundreds of miles away, there are expenses they can use for transportation, meals, and lodging. All expenses obtained for this service, though, must be primarily for and essential to medical care.
It’s important to note the mileage rate for traveling to obtain medical care also. At the start of every year, the IRS announces the standard mileage rate for this type of service. The standard rate was 18 cents per mile from January 1, 2022, through June 30, 2022. However, due to increased gas prices, the rate rose to 22 cents per mile from now until the duration of the calendar year.
What qualifies as expenses involving transportation to and from medical treatment sites?
Individuals may only benefit from transportation costs obtained to and from medical treatment sites when it’s via taxis, buses, trains, airplanes, rental cars, and rideshare services (such as Uber or Lyft). In addition, transportation to a medical treatment site only qualifies if it’s to treat a specific ailment or disease.
Qualifications for meal and lodging expenses
The only way meal expenses count as expenses for medical care is if they are provided at a hospital or a similar institution where an individual is receiving care. Therefore, meal expenses away from home while an individual seeks treatment is not eligible.
Lodging expenses can be reimbursable as well, however it must meet 1 of these 3 requirements.
- If incurred primarily for and essential to medical care
- If the medical care is provided by a physician in a licensed hospital (or in a medical care facility related to one)
- If there is no significant element of personal pleasure, recreation, or vacation
Lodging expenses can be reimbursed at a maximum amount of $50 per day per individual.
Travel costs associated with abortion care
With the need to travel for abortion services on the rise, many companies have installed abortion travel benefits to their benefit package to help with travel costs. The expenses for abortion travel benefits cover ground transportation (bus, taxi, train), airfare and lodging (individual or two people).
by admin | Jul 18, 2022 | Blog
In the event of employment termination for an account holder, there are several notable procedures and regulations that occur:
- Any participation in a Flexible Spending Account (FSA) – Health Care FSA, Limited Purpose FSA, Dependent Care FSA, Adoption Assistance, or Commuter Account – will end along with the ability to incur additional expenses for reimbursement.
- All future salary reductions will end.
- If you have a NueSynergy FSA benefit card, the card will be deactivated on date of termination.
- You will have 30 days from your date of termination to submit manual claims to NueSynergy by mail, online, fax, or mobile application.
- Manual claims submitted during a 30-day window must have dates of service prior to date of termination.
by admin | Jul 12, 2022 | Blog
As you may be aware, a Health Savings Account (HSA) is a great resource to help pay for medical expenses and premiums. But what happens to an HSA once someone enters retirement? Here is what you need to know.
- If you are enrolled in Medicare or Medicaid, you’re no longer eligible to contribute to an HSA.
- If you are Medicare eligible, but aren’t enrolled in Medicare, you can contribute to an HSA by enrolling in an HSA-qualified High Deductible Health Plan (HDHP). This type of health insurance plan has lower monthly premiums than traditional health insurance plans and can be combined with an HSA.
- If a distribution from an HSA is used for purposes other than a qualified medical expense, the amount withdrawn is subject to both income tax and a 20% penalty. However, once a person reaches the age of 65 years old or older, the amount withdrawn for non-medical purposes is treated as retirement income and is subject to normal income tax.
by admin | Jul 11, 2022 | Blog
The U.S. Supreme Court has rejected a challenge to the constitutionality of Mississippi’s Gestational Age Act, which prohibits performing or inducing an abortion after 15 weeks of pregnancy (as determined by probable gestational age) except in limited circumstances. Previously, a federal trial court and the Fifth Circuit appellate court had each ruled that the law was unenforceable based on the Court’s precedents establishing a constitutional right to abortion up to the point of fetal viability (primarily Roe v. Wade and Planned Parenthood of Southeastern Penn. v. Casey). The Court’s decision expressly overrules Roe and Casey, concluding that the Constitution “does not prohibit the citizens of each State from regulating or prohibiting abortion.” Explaining that, absent a fundamental constitutional right to abortion, abortion laws are analyzed like other state laws governing health and welfare and must be sustained if there is a rational basis on which the legislature could have thought that the law would serve legitimate state interests, the Court held that the Mississippi law met that test.
EBIA Comment: As a result of this ruling, many states’ laws (some of which have already taken effect) will prohibit abortion or impose greater restrictions than were permissible under Roe and Casey. This may raise a variety of issues for employee benefit plan sponsors. For instance, it is widely reported that employers have expressed an intent to assist employees in accessing abortion services, such as by covering employees’ expenses if they need to travel for an abortion. Among other considerations, these employers will need to weigh the effect of state laws that may seek to impose civil or criminal sanctions on anyone—including residents of another state—assisting an individual in obtaining an abortion.
Furthermore, employers will have to consider whether to provide such benefits on a tax-favored basis (which limits the type and amount of expenses that may be covered) and whether to use an existing plan or establish a separate arrangement. Each approach will raise different considerations, including compliance with otherwise applicable group health plan requirements; the need to amend existing plan terms, related insurance or administrative services contracts, and employee communications; and whether a separate arrangement would create a new plan independently subject to ERISA and other rules. Broader issues also loom for health plan benefits, such as whether existing coverages remain in compliance and whether any proposed changes comply with, for example, HIPAA (and other federal privacy laws) and mental health parity requirements (if travel benefits are provided for this medical procedure but not for mental health treatment), as well as potential preemption of the various state laws by ERISA or other federal laws. Employers should seek the advice of experienced employee benefits counsel as they consider their options.
Source: Thomson Reuters
by admin | Jun 30, 2022 | Blog
The IRS has announced a midyear increase in the standard mileage rates for business and medical use of an automobile, and for deducting moving expenses. For travel on or after July 1, 2022, the business standard mileage rate is 62.5 cents per mile (up from the original 2022 rate of 58.5 cents per mile). The rate when an automobile is used to obtain medical care is 22 cents per mile for travel on or after July 1, 2022 (up from 18 cents per mile). The rate for deducting automobile expenses that are moving expenses will also increase from 18 to 22 cents per mile for travel on or after July 1, 2022. For taxable years beginning after 2018 and before 2026, however, the moving expense deduction is available only for certain moves by members of the Armed Forces on active duty. The rate for charitable use of an automobile will remain unchanged at 14 cents per mile.
Standard mileage rates can be used instead of calculating the actual expenses that are deductible. For example, the business standard mileage rate can be used instead of determining the amount of fixed expenses (e.g., depreciation, lease payments, and license and registration fees) and variable expenses (e.g., gas and oil) that are deductible as business expenses. Only variable expenses are deductible as medical or moving expenses, so the medical and moving rate is lower. (Parking fees and tolls related to use of an automobile for medical or moving expense purposes may be deductible as separate items.)
EBIA Comment: Ordinarily, the IRS updates mileage rates only once a year, but occasionally it makes interim adjustments like this one, which reflects recent gasoline price increases. Transportation expenses that are deductible medical expenses generally can be reimbursed on a tax-free basis by a health FSA, HRA, or HSA. (To simplify administration, some employers’ health FSAs or HRAs exclude medical transportation expenses from the list of reimbursable items.)
Source: Thomson Reuters
