Flying home last week from the wintry Northwest, I heard lots of sneezing and sniffles from my fellow travelers.
Although we’ve been lucky to have such a mild winter so far, cold January weather usually brings with it the onslaught of cold and flu season. In a typical year, 5 to 20 percent of the population in the U.S. will get the flu, according to www.flufacts.com , and some of your employees may end up with flu complications that may require a trip to the doctor or even hospitalization.
With the increased popularity of Consumer Driven Health Plans (CDHPs) that have a high deductible, many employees face out-of-pocket costs due to these flu complications or other medical expenses. Some employers have chosen to offset the high deductible found in a CDHP by funding a Health Reimbursement Account (HRA) or a Health Savings Account (HSA) with an employer contribution. Other employers offer their workforce the ability to set aside tax-free dollars in an HSA or Flexible Spending Account (FSA) through payroll deduction.
Preventable action is the first step
Unfortunately, due to lack of funds or lack of knowledge about these accounts, many employees do not take advantage of these accounts by setting aside a portion of their paycheck to offset the high deductible on their health insurance and then find themselves in a bind when it comes to paying the hospital bill. How can you help?
The first line of defense is always preventative action. If you offer an HSA or FSA, make sure to provide plenty of education to your employees on how to take advantage of these accounts.
Although the FSA is “use it or lose it,” the HSA allows unused funds to roll over each year, a fact that many employees get confused about. Employees may also not realize that they can contribute to their HSA by simply writing a check, and can actually make 2011 tax year deposits up to the tax filing deadline of 4/17/2012.
Other ways you can help
A good time to provide the financial education necessary to better understand the HSA or FSA is during open enrollment each year, as your workforce is choosing their health insurance coverage for the following year. However, sometimes employees feel rushed and overwhelmed during open enrollment, so a workshop in the beginning of the year to focus on a Financial New Year can be very beneficial to hit not only the advantages of their healthcare accounts, but also the increased limits in the 401(k) and last minute tax tips to help your employees increase their overall financial wellness.
If you have an employee come to you that is already facing a delinquent medical bill, there is still action you can take to help. By offering direct access over the phone or in person to a financial counselor as an employee benefit, your employees who are struggling with how to handle medical bills can receive guidance on negotiating a payment plan with their doctor or hospital.
There is also a brochure available from FamiliesUSA, a non-profit organization dedicated to being the voice for health care consumers, which can be provided to the employee as a useful resource on dealing with medical bills.
This was originally published on the Financial Finesse blog for Workplace Financial Planning and Education.