Just a quick note to let folks know that we now have a comprehensive article about HRA Discrimination Testing online under UpDate Newsletters.  This can be found on the main FlexMagic Home Page menu.  Review this newsletter to see if your HRA plan is likely to be complaint.

There is a lot of discussion these days about the reduction in the Health Care Spending Account (HCSA) limit to a maximum of $2,500 in 2013 and how it will impact Flex Plans.  Some people speculate that Health Savings Accounts (HSAs) with a carry forward of funds and higher contribution ceiling (currently $3,050 for single and $6,150 for family – 2011) will become the dominant choice and HCSA’s will become obsolete! 

We at FlexMagic believe there is a place for each option.  Many of our clients already offer a limited-use HCSA to fund immediate needs for dental and vision expenses for the family; while still allowing the participant to save in an HSA Trust for current and future health care expenses.  This is, of course, only available when a High Deductible Health Plan (HDHP) option and Flex limited-use HCSA plan are both offered.  However, by using both tax-free options a participant can enjoy a maximum tax-free advantage. 

How is this working for your employees? 

Do you think the $2,500 HCSA limit will cause employers to drop their plans and go to HSAs exclusively since they have a higher contribution limit? 

Do you think PPO plans and HMO Plans with a general-use HCSA will still thrive and continue to meet the health care needs for most families?  Each spouse could participate in a HCSA plan to the maximum advantage (assuming each employer offers a Flex plan with a HCSA).  This means a family unit could still apply up to $5,000 per year tax-free for health care expenses.  Each spouse would participate in his/her employer’s flex HCSA to the company plan’s maximum limit of $2,500.  

What do you think?  Please share your opinions and any innovations or insights with us and your fellow bloggers.

FlexMagic comes of age with its own BLOG!  We hope you find this to be a useful forum for discussions and sharing with others who are also offering tax advantaged programs at the workplace.  These programs are a cost-effective way to help control the high cost of employee benefits.   Sooo… Chat away!