Tag Archives: employee benefits

Extending the COBRA Premium Subsidy Extension (No, it’s not inadvertently redundant.)

The original COBRA premium subsidy extension, passed in December 2009, extended the original eligibility period for involuntarily termed employees. The original cutoff date, December 31, 2009, moved to February 28, 2010.

With February 28th  just four days away, a NEW extension for COBRA premium subsidy eligibility has not yet been passed.  In fact, reference to such an extension was actually stripped from the jobs bill passed by the Senate today.  

However, the AP reports that with the jobs bill now on its way to the House, Harry Reid now wants to extend the COBRA extension  (as well as unemployment benefits) before February 28th. 

Reid is reported to be considering a two step process:

     1) An initial 30 day extension.
     2) A follow on,  longer term extension, possibly to the end of December.

Another scenario, of course, is “no further extension”…an unlikely outcome, in our view.

We will keep you informed …


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Filed under COBRA, Health Care Reform, Health Plans, Legislative Updates

Don’t Dismiss Disease Management: Part 2

I’m still thinking about that Business Week article I posted about earlier this week…I really do think it is short sighted to dismiss the usefulness of wellness programs, based on the review of a single program that took place 10 years ago.

A quick look around today found the following from SHRM, citing two recent publications, both supporting the opposite view. See what you think!

A study in the Jan/Feb issue of “The American Journal of Health Promotion” concludes that wellness and prevention programs do make a difference…Engaged participants can reduce their costs. The key here is “engaged participants.”

Another highlight is a Harvard study, published in the February issue of the journal “Health Affairs.” The study, “Workplace Wellness Can Generate Savings,” focuses on specific case studies. Their indications are “a positive return on investment (ROI) from employer-sponsored wellness programs.” It may take some time to get there, but it does happen.

Not an overnight fix, and you need buy in from your employees, but employer sponsoered wellness plans can make a difference.

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Filed under Health Care Spending, Wellness

Health Care Reform – More Trouble for the Individual Mandate

One of the key components health care reform is the individual mandate – the theory goes that if everyone has insurance, the pool widens, costs (eventually) drop, and we all benefit. As we have pointed out in the past, this idea has come under fire from a range of opponents.

The Washington Post reports that the Virginia Senate, with the backing of both Republicans and Democrats, passed measures this week that will make it illegal to require individuals to purchase health insurance. The Post notes that  “The action in Virginia…could indicate that the president is failing to reassure members of his own party that current reform efforts remain worthwhile.”

As well as the Virginia action, the AP reports, “Conservative lawmakers in more than two-thirds of the states are forging ahead with constitutional amendments to ban government health insurance mandates.” Ultimately, federal law would trump state laws, so these measures may have no real effect, but this does show that the issue remains in the forefront for conservatives.

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Filed under Health Care Reform

HSA – Health Savings Account

The health savings account (HSA) was introduced in 2003. There are really two sides to an HSA plan: the savings account, usually referred to as the HSA, and the health plan.  The HSA is a tax advantaged medical savings account. Savings can be used  to pay the deductible of the corresponding  High Deductible Health Plan (HDHP). The HDHP must meet specific guidelines to qualify for HSA status.

There are some similarities between an HSA and a flexible spending account (FSA). Employers don’t have  to fund either the HSA or the FSA. HSA’s allow deposits up to the maximum contribution limit, set annually by the IRS.  For the year 2010, the amount  is $3,050 for individual coverage,  and $6,150 for family coverage, and includes both employee and employer contributions.

Unlike FSAs, the unspent HSA funds roll over each year. Contributions, as well as interest earned, remain free from taxes. Disbursements are also tax free, provided they are used to pay qualified medical expenses.

By investing in a health savings account, employees get a tax advantaged account that stays with them. They may continue to contribute as long as they remain covered by a qualified HDHP.

Qualified HDHPs are very different to “traditional” health plans. Because of the differences, some employees may be initially reluctant to embrace them. We will look at these in our next HSA post.

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Filed under Health Plans, HSA