Flexible Spending Account: A Short Report

The employee is supposed to engage in an employee-driven health plan where the worker has a chance to contribute towards their personal health accounts. The raised money is used to cater for their health. This eases the employer from possible extra expenses, compared to when the employer contributes solely (Kerzner, 2013).

Funded by the employer, the health reimbursement account (HRA) is a reimbursement plan for the employee with high deductible health plans. In order for employees to receive payments back for out of pocket medical services, the employee must make a claim to the HRA. For instance, the employee with a high deductible, copayments, and coinsurance in which medical services not covered by the health plan, may request payment for out of pocket expenses (Valerius, Bayes, Newby, Seggern, 2008).

The National Federation of Independent Business (NFIB) agrees that the cost of health insurance is a high ranking concern for business owners. Every year, they conduct a study to see what the top general concerns facing small business owners. From the beginning of the fiscal year of 1986 to the present, every year has concluded that the cost of health insurance is the top burden facing small business owners in America. (Wade, Holly Pg 24, table 5). Another important factor to consider are lost capacity due to employee illnesses or unemployment. Brad Plumer of the Washington post recently did an interesting study to determine the amount of money lost due to inactivity at the workplace. Including businesses in both the public and private sectors, Plumer estimates that over $1.8 trillion dollars per year in lost productivity at the workplace. While the Post acknowledged the idea of lost productivity is not a clear science and can be overvalued this is nonetheless a huge amount of money wasted each year.

Healthcare is often driven by consumers and insurance companies; there is strong pushes for insurance companies to start paying better through Patient Care Medical Homes (PCMH) or Accountable Care Organizations (ACO) rather than paying at a per-visit basis (Hamlin, 2015). With PCMH or ACOs payment is made on a continuum of care, encouraging the provider to be involved in all aspects affecting health of the patient (Derksen, & Whelan,

Although the ACA have made progress, many still question whether or not this new law is working. The law is too complicated for people to understanding their coverage. "The ACA is not perfect", "but at least" the U.S. has taken one step toward reducing the disparities between rich and poor and providing health coverage to everyone (Gruber, 2011). In this paper I will discuss the benefit of the ACA and the affect it will have on provider reimbursement.

The National Federation of Independent Business (NFIB) has repeatedly stated that the cost of health insurance is a high ranking concern for small business owners. Every year they conduct a study to see what the top general concerns facing small business owners. In each fiscal year since 1986 the cost of health insurance has been shown to be the top burden facing small business owners in America. (Wade, Holly Pg 24, table 5). Another important factor to consider are business which suffer from lost capacity due to employee illnesses or unemployment cost. Brad Plumer of the Washington Post recently conducted a study to determine the amount of money lost due to inactivity at the workplace. Including businesses in both the public and private sectors, Plumer estimates that over $1.8 trillion dollars per year in wasted each year as a result of lost productivity at the workplace (Plumer, Brad). While Mr. Plumer acknowledged the idea of lost productivity is not a clear science and can be overvalued this is nonetheless a huge amount of money wasted each year.

A Federally Qualified Health Center (FQHC) is a health center that allows patient who might otherwise not receive the critical primary care that they may need. These types of facilities help to fill crucial access gaps, allowing patient to pay according to their income on a sliding fee scale. “Congress passed FQHC-enabling legislation as part of the Social Security Act in 1989 and the application process and requirements for federal qualifications are governed under the Public Health Service Act” (Hennessy, 2013). There are approximately 1,200 main health centers that deliver care with over

America spends 2.5 times more on healthcare than most developed countries yet still ranking 51st in life expectancy in the world (Baum, 2015). The Affordable Care Act (ACA) was implemented January 1, 2014 by President Obama to expand coverage to millions of individuals in need. It consists of two separate pieces of legislation: the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (Centers for Medicaid and Medicaid Services, 2016). Although the ACA will give health benefits to millions of uninsured Americans, hospitals are receiving less compensation because of the high demand of health care from over qualified recipients. Through the Children’s Health Insurance Program and also the Social Security Act, states are able to pilot a test approach that could extend coverage up to 200 percent of the poverty line (Sommers, Kenney, & Epstein, 2015). Such a large increase in the size of the population that is now eligible to apply for the ACA comes with a sizable amount of fiscal responsibility from the states and puts an immense strain on the amount of money guaranteed to pay for the services provided (Sonier et al., 2013). Given the lack of funding from the Medicaid program, absence of reimbursement strategies, and budget of healthcare in America’s Gross Domestic Product (GDP),

A waiver amendment sanctioned beneficiaries between the 50%-138% FPL make monthly cost-sharing contributions to health savings accounts. Those above the 100% FPL who do not make monthly account contributions are responsible for state plan level co-payments and co-insurance at the time of service. Failure to pay these costs can result in the denial of any services. Cost-sharing, however, does not apply to those beneficiaries who are determined to be medically frail as determined by the state’s health care screening assessment (“Medicaid Expansion in Arkansas”, 2015).

it requires consumers to open a Health Saving account and the State will select an administrator in accordance with the account. The consumer finances a self-funded high deductible health benefit coverage including preventive health care to a plan enrollee in the State.

For those Americans not covered or find their work coverage too expensive, there is a new way for them to buy insurance on their own called Health Insurance Marketplaces. Some states have named these marketplaces something else. The Health Insurance Marketplace is like a virtual insurance megamall where private insurers compete for American’s business. Americans can pick out how much coverage they want, how much they want to pay for it, from cheaper high deductible plans to more expensive plans. Regardless what plan is chosen, all plans will cover a complete set of services like hospital visits, doctor visits,

The overall goal of Financial Alignment Initiative or two Financial Alignment Demonstration (FAD) models is to develop, test, and validate fully integrated delivery system and care coordination models that can be applied in other States (Centers for Medicare & Medicaid Services, 2011b). The first model to integrate Medicare and Medicaid dual eligible beneficiaries is the capitated model. The second model to integrate Medicare and Medicaid dual eligible beneficiaries is the managed fee-for-service (FFS). Under the capitated model, a State, CMS, and a participating health plan enter into a three-way contract, and the health plan receives prospective capitation payments to provide comprehensive and coordinated care. Under the managed FFS model, CMS and a state enter into a contract, which the state would gain from savings resulting from the initiatives that improve quality and decrease costs for both Medicare and Medicaid (Centers for Medicare & Medicaid Services, 2011b).

The Federal Insurance Contributions Act (FICA) is the federal law that requires one to withhold taxes from wages. This act sets the employees rates as well. I felt that changes in rates are a good thing because it balances out in the long run. The economy is changing and so additional funds is needed to adjust those

Financial management must come up with proposals that will nurture new ideas, devices or processes to promote and lessen costs; The Affordable Care Act has provisions that will help financial management deal with simplification. By having extra electronic processing and less form-filling, it will eliminate the need to spend money on check printing, phone calls, and postage charges. Simplification and synchronization is needed for administrative.

* Currently offers their employees fee-for-standard, 300 deductibles, 20 percent co insurance, FSA Flexible spending account