HCSO Moving Forward

HCSO Moving Forward

We have received many questions regarding the off again – on again HRA to comply with San Francisco HCSO. Here are some the most common FAQs to keep you informed so you can choose the best option for you and your employees. The most important issue is how BeneFLEX’s ability to help you going forward has improved.

In October 2013, BeneFLEX was restricted to only providing you with the mandated 24 month spend down. Now in 2014 we can provide an Excepted Benefit HRA for employees who average 8 to 20 hours per week. You must put the remaining hours in a separate plan, yet many of our clients have said half a loaf of savings is better than none.

The best option moving forward:

Combine BeneFLEX’s Excepted Benefit HRA with the City Plan to meet the City of San Francisco HCSO Obligation:

WHY???
The HRA Works!!! The HRA HCSO has saved our clients many many thousands of dollars.  With the changes that were released on December 24th, you have the opportunity to do a Dental/Vision/LTC HRA and continue to save money for all hours that average 20 or less per week.

HOW???
Across the board submit the average 8 to 20 hours (260) per quarter to BeneFLEX for the new Excepted Benefit Dental/Vision/LTC HRA. Anything over that would go into the City’s Plan.

Going Forward:
Your 2014 Excepted Benefit HRA must:
1. Reimburse Excepted Benefits as identified by the City and approved by the
HRA105 tax code (see qualified FAQs Q3).
2. Make HRA funds available for 24 months.
3. Only award an average of 8 to 20 hours per week in HRA quarterly.
4. Etc…BeneFLEX will help you follow the City guidelines.

Example:
This example depicts the benefit of combining BeneFLEX’s Excepted Benefit HRA with the City Plan versus using the City Only Plan to comply with the HCSO HRA guidelines.

Table shows: Projected employer savings for a group of 10 employees who work an average of 30 hours per week and spent 20% on healthcare costs.
BeneFLEX’s Solution        vs      City Only Plan

Submit 20 hours to the D/V/LTC HRA

Submit remaining hours to the City Plan

Submit All funds to the City

Total hours worked per   quarter: 3,900 hrs

2,600 hours

1,300 hours

3,900 hours

Hourly expenditure for   large company

$2.44

$2.44

$2.44

Funds required for   HCSO Contribution

$6,344

$3,172

$9,516

Employee spends 20% on   healthcare

($-1,269)

($-634)

($-1,903)

Funds remaining after   healthcare costs

$5,075

$2,538

$7,613

Employer’s Average   Yearly Cost

$5,076

($12,688)

($38,064)

Employer’s Average   Yearly Savings(4   quarters per year)

$20,300

Goes back to the employer

-0-

City keeps all the funds

-0-

City keeps all funds

Call BeneFLEX and ask us to run your numbers to project your savings! 

FAQs???
Q1.      Can BeneFLEX do my 24 month spend down for the 2012 and 2013 HRA?
A1.      Yes, BeneFLEX will administer the 24 month required spend down. All 213D medical expenses will be eligible.

Q2.      I thought the 12/13 spend down HRA was switching to all D/V/LTC Expenses?
A2.      That was the plan, but the City suggested that any plan that restricted the HRA for 2012 and 2013 would then be subject to the 20 hour average rule.  We made a business decision on behalf of our clients so they would not be put into the position of paying out the hours above the 20 hour average. All 213D medical expenses will be eligible. The only change is insurance premiums can no longer be reimbursed by the plan.

Q3.      What are the Excepted HRA Benefits you mention for the earned 2014 rewards?
A3.      The City listed the following excepted benefits that have to be offered in the HRA.
● Dental benefits limited to treatment of the mouth;
● Vision benefits limited to treatment of the eye;
● Long-term, nursing home, home health, or community-based care; and
Note: In discussions with the City, they clarified on 2/27/2014 that Employers would only reimburse excepted benefits allowed under an HRA.

Q4.      Do I need to communicate my HRA needs on how BeneFLEX should or should not continue to administer the SF HCSO obligation?
A4.      Please. We must have directions from you. We have attached an updated order form. The changes for moving forward have been included. Please submit or resubmit to info@beneflexhr.com.

Q5.      When does the new HRA plan have to be set up by?
A5.      The City ordinance requires that you set up any new plans for 2014 by March 31, 2014. This allows ample time for you to have BeneFLEX complete set up process and continue to administer your HRA plan(s).

Q6.      But I already started a City plan or the Boon Group plan for 2014?
A6.      The City allows you to run two plans concurrently to meet your HCSO obligations. If you have started the City plan for 2014, you can add the BeneFLEX Excepted Benefits HRA. If you have started with the Boon Group you can continue to split the employees with 8 to 20 hours to BeneFLEX and give the Boon Group the entire set of hours for employees 21 to 40. The Boon Group is a monthly plan and employees can go in and out of it by month, based on their average hours.

Q7.      In your example, you show splitting 30 hours.  You split out 20 hours to BeneFLEX and 10 hours to the City each week.  Will the Boon group allow us to split the hours giving them the additional 10?
A7.      Unfortunately the Boon Group plan is a full insurance plan. They would require the entire set of 30 hours (using our example).

Q8.        You mentioned insurance.  Should I confer with my broker?
A8.        Yes, your broker should be a part of this important decision.  Call us if you have any questions.

Printable Forms:
HRA Order Form
Dental/Vision/LTC HRA Waiver Form – for California Insurance Exchange

Sincerely,

Mark Schmersahl
Vice President
800.631.3539