BASE^® Blog

Health care costs are an ever-escalating expense and for the year 2020, it is no different, especially when looking towards post COVID-19.  The question of where health care is headed is as certain as to when the pandemic will end, however projections make it clear that the cost of health care and options need to help prepare individuals for more control over health care costs and provide savings.  Predictions point towards the increase in health care being passed on through insurance premiums, which makes now an important time for researching options to combat those increases.

The BASE® Integrated Health Reimbursement Arrangement is a great option to keep the cost of group health insurance coverage affordable for both the employer and their employees.  By coupling a group health plan with the BASE® Integrated HRA, employers are able to suppress the yearly increases most commonly associated with traditional forms of health care.  As things continue to evolve during this crazy time, many employers are reassessing their current benefits.  One thing for them to take into consideration is what an Integrated HRA can do for both the employer and employee – not just now, but into the future.

With this HRA, both the employer and employee will realize cost savings and a tax benefit. 

To the EMPLOYER:

• Plan Design. Employers can choose to raise the deductible on their current group health insurance plan, reducing the overall cost of the insured plan, self-insuring a portion of that deductible to keep the employees responsibility of the deductible maintainable.  All reimbursements are tax-free to the employee and tax deductible to the employer. 
• Protection of Funds.  HRA funds are only paid to the employees once a qualifying expense has been adjudicated by BASE® with no prefunding necessary. 
• Cost Containment. Employers have more control of the overall cost of their benefit plan by coupling a group health insurance plan with the BASE® Integrated HRA. 
• The plan will work with any carrier, health insurance plan, or group benefit plan. 
• Tax Benefit. All reimbursements are 100% deductible as a business expense.

To the EMPLOYEE:

• No Contribution. No prefunding of an account is necessary. 
• No Taxes. All reimbursements are non-reportable and non-taxable income.

The BASE® Integrated HRA has been proven to reduce an employers’ health insurance premium increases by 10-50%, which could be a crucial means of creating more control over health care costs and increased savings in a post COVID-19 era.  BASE® is here to answer your questions on the best approach for offering benefits while controlling premiums.  For more information, call BASE® at 888.386.9680 or visit BASEonline.com.

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During the pandemic, many are faced with a new normal.  This new normal could mean working from home or being unemployed, and for schools and daycares it could mean being closed for the foreseeable future.  These changes have greatly impacted employers across the country, as well as the benefits they offer employees.  One benefit that can be cause for questions is the Section 125 Cafeteria Plan - Dependent Care Assistance Plan.

The BASE® Dependent Care Assistance Plan is a benefit that helps employees pay for the necessary care of a qualified dependent while the parent works.  It allows employees to use their tax-free dollars to pay for child day care or elder day care expenses.  This 125 Cafeteria Plan option allows an employee to be reimbursed for their eligible dependent care expenses so that the employee can continue to work, look for work, or attend school full-time.

In order to meet the requirements for DCAP employees must:

• Be gainfully employed
• Have a qualifying dependent
• Use the funds for care and not education
• Incur the cost during the coverage period
• Submit expenses to be substantiated

With the current public health crisis, many employees are unable to meet one, or more, of the requirements that allows them to continue to contribute to their DCAP – being gainfully employed and/or having childcare.  Because of this, employers are now having employees wanting to make changes to their plan.

Employers should always refer to their plan document before making any midyear election changes to determine whether such changes are allowed.  A qualifying event must occur for a change in DCAP election.  Employers are seeing an increase in these qualified events, which include a change in work status (the employee is no longer gainfully employed), the funds for care (the daycare is closed and funds are no longer used), and/or FMLA (which will be reinstated when employee returns from their absence).

With all the varying circumstances employers are facing during this time, it is important for employees to visit with their employer regarding what is allowable.  If election changes are eligible, participants typically have 30 days from the date of the qualifying event to submit their request.  For more information on the BASE® Dependent Care Assistance Plan, call 888.386.9680 or visit the website. 

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