HSA Limits Stay the Same for 2011
For calendar year 2011, the maximum Health Savings Account (HSA)
contribution that can be made is $3,050 for employee-only coverage ($4,050
if you are age 55 or older and eligible to make catch-up contributions)
and $6,150 for family coverage ($7,150 if you are age 55 or older and
eligible to make catch-up contributions). Family coverage is defined as
coverage for an eligible individual and at least one other individual.
For more information about HSAs please contact your account
representative or call us at 800-662-7917. If your employees have
established HSAs through Mellon, you may also contact them directly with
questions. Mellon has a dedicated employer support line, 866-712-4551.
Health Care Reform and HSAs
Outlined below are the health care reform changes with the most
immediate impact on Health Savings Accounts:
- Effective January 1, 2011, amounts paid for over-the-counter drugs
will no longer be qualified medical expenses eligible for reimbursement
from an HSA unless the over-the-counter drug was prescribed by a doctor.
The prescription requirement only applies to over-the-counter drugs. It
does not apply to expenses for other over-the-counter items such as
insulin and diabetic supplies, bandages, band-aids or contact lens
supplies. These items continue to be reimbursable from an HSA without a
- Also effective January 1, 2011, the penalty for reimbursements of
nonqualified medical expenses from your HSA will increase from 10 to 20
Making the Most of HSAs
As a key component of consumer driven health care, a health savings
account (HSA) is a great way for employees to save money for future
medical expenses. By saving money in an HSA, either through their own
contributions or those made by the practice, an employee can pay for
qualified medical expenses, including eyeglasses, dental care, and medical
supplies, with a triple tax advantage. Contributions are tax-deductible,
the interest and capital gains are tax-free, and any money that is
withdrawn for qualified medical expenses is also tax-free. Employees are
encouraged to make the most of their HSAs and actively participate in
health care decisions. If medical expenses are low and contributions are
made regularly, the account can accumulate significant assets as deposits
roll over from year to year.
In order to have an HSA, you must
have a qualified high deductible health plan (HDHP). The North Carolina
Medical Society Employee Benefit Plan is your "one-stop shop" for HDHPs
and HSAs. The NCMS Plan has many qualified HDHP plan options from which
you can choose, and all HDHP plans can be paired with HSAs from an
integrated HSA provider, Mellon Bank.
If you want to use your HSA
as a retirement vehicle, make the maximum allowable deposits each year and
let the money accrue. Similar to a 401(k) or IRA, you'll be able to invest
your HSA in a variety of funds through your HSA administrator. To put it
into perspective: A well-diversified HSA may grow by 7 percent or more
each year, and over the course of 30 years, a $1,000 yearly contribution
could turn into $110,000.
If you use your HSA funds for nonmedical
expenses before age 65, you will be subject to income tax and a penalty on
the money you withdraw. Once you reach 65, you'll be eligible for Medicare
and your out-of-pocket expenses will most likely drop. However, once you
enroll in Medicare you won't be able to make any more contributions to
your HSA. Additionally, if at any point you are no longer covered under a
HDHP, you can still use the money in your account (now or later) but can
no longer make contributions.
Already in your fifties? Don't worry!
The IRS will allow anyone 55 or older to make catch-up contributions of an
additional $1,000 per year.
The bottom line, though, is to make
sure your employees get the care they need, understand the cost of the
care provided, their benefits and what may be their responsibilty after
the claims are processed. The NCMS Plan's administrator (BCBSNC) can be a
valuable resource for evaluating costs and benefits of care for you and
your employees. Employees can reach Member Services at 877-258-3334 or use
online resources including a Health Care Cost Estimator.
information about HSAs and HDHPs, please contact your NCMS Plan
Eat Smart, Move More, Weigh Less
Have you considered beginning or enhancing your health promotion
efforts in 2011? This New Year, help your employees make their plans of a
healthier diet and regular exercise a lifetime goal, not just a fleeting
Did you know that 2 out of 3 adults are overweight or
obese? Eat Smart, Move More, Weigh Less is a 15-week weight
management program that uses strategies proven to work. The program is
offered to worksites and other groups interested in eating smart, moving
more and achieving a healthy weight. Each of the one-hour lessons informs,
empowers and motivates participants to live mindfully as they make choices
about eating and physical activity. The program provides opportunities for
participants to track their progress and keep a journal of healthy eating
habits and physical activity behaviors.
Consider offering Eat
Smart, Move More, Weigh Less at your practice. Visit http://www.esmmweighless.com/ for
more information. Use the "Instructor Locator" to find a trained
instructor near you to lead a Weigh Less class. The average price per
participant is $20-$40 depending on the county you reside. Sessions are
delivered at a public location or could be delivered on-site.
Jason Horay, NCMS Plan Health Promotion Coordinator, partners with
practices to assess their appetite for health promotion, reviews and
interprets NCMS Plan utilization data to target the most cost-productive
areas and assists in the creation of short term and long term program
action plans that will empower employees to maintain, improve and manage
their health. If your practice is interested in creating or building upon
a culture of health, please contact Jason Horay at 919-878-7530 or email@example.com.
Question: George, our practice has an employee that is not working
full-time hours but would like to have the health benefits. We know that
only "full-time" employees are eligible for the coverage but what defines
a full-time employee and how can we get this employee covered?
Answer: You may be surprised to know that the NCMS Plan gives
participating practices a choice of how they define a full-time employee.
A full-time employee is eligible for benefits if they are regularly
scheduled to work at least twenty-four (24) or thirty (30) hours per week
depending on your practice's preference. If a practice chooses the 24 hour
definition, then any employee, physician or non-physician, must be offered
coverage if they meet that criteria.
If you have questions about
your practice's eligibility definition, or would like to change your
full-time employee definition, please contact me at 919-878-7561 or firstname.lastname@example.org.
About the North Carolina Medical Society
As the largest physician organization in the state, the North Carolina
Medical Society (NCMS) is devoted to representing the interests of
physicians and protecting the quality of patient care. The NCMS Plan,
sponsored by the NCMS, is the only statewide employee benefits plan
designed specifically for North Carolina physicians.
information about many other benefits of NCMS membership, visit http://www.ncmedsoc.org/.