2009 HSA Contribution Limits Announced

The Internal Revenue Service 2009 maximum contribution levels for health savings accounts and out-of-pocket spending limits for high deductible health plans connected to HSAs, which have been indexed for inflation for federal income tax purposes. For 2009, the agency reports that the maximum annual HSA contribution for an eligible individual with self-only coverage is $3,000. For family coverage, the maximum annual HSA contribution is $5,950. In addition, catch-up contributions for participants who are 55 or older will increase to $1,000 for 2009.

The guidance explains that eligible individuals are allowed the full annual contribution, including a catch-up contribution, if 55 or older by year end, regardless of the number of months the individual was an eligible individual in the year.

"For individuals who are no longer eligible individuals on that date, both the HSA contribution and a catch-up contribution apply pro rata based on the number of months of the year a taxpayer is an eligible individual," the IRS explains.

For 2009, the maximum annual out-of-pocket amounts for HDHP self-coverage jumps to $5,800, and the maximum annual out-of-pocket amount for HDHP family coverage is twice that, $11,600. The minimum deductible for HDHPs increases to $1,150 for self-only coverage and $2,300 for family coverage.

For more information visit the US Treasary Website:

http://www.treasury.gov/offices/public-affairs/hsa/

TARDY MEDICARE REIMBURSEMENTS ARE HURTING DOCTORS IN CALIFORNIA, NEVADA AND HAWAII

Los Angeles Times -

Nov. 8: Doctors across California and in two other Western states are owed millions of dollars in backlogged Medicare reimbursements, leading some physicians to turn away elderly patients and pushing others to the brink of bankruptcy.

In the most extreme cases, doctors have not been paid since February. Others are owed hundreds of thousands of dollars. Doctors who serve high numbers of Medicare patients say they are defaulting on rent, laying off staff and begging drug suppliers not to stop shipments. One cardiologist said she's even resorted to doing the office laundry to cut costs.

Medicare owes Dr. Tim Ganey and his Bay Area practice of oncologists $750,000 in outstanding claims. He sought grace periods from vendors for his drug payments, but now he's running out of time. He won't be able to order more chemotherapy treatments unless he pays his bill.

The holdup is twofold. By May, doctors were supposed to be using a new universal identification number assigned by the Centers for Medicare and Medicaid Services. Without the new number, which is like a Social Security number, doctors can't get reimbursed.

Then, as scores of doctors still waited for those numbers, in September the federal agency switched to a new claim processor for its 90,000 California providers. The move to Palmetto GBA in South Carolina, part of a national effort to reform Medicare contractors, compounded the billing issues and left even doctors who had their universal identification numbers waiting months for reimbursement.

"This is just a complete disaster," said Dr. Dev Gnanadev, medical director and chairman of the Department of Surgery at Arrowhead Regional Medical Center in Colton and president of the California Medical Assn. "I know people who have turned down their office to minimal size. Some are even considering closing temporarily. If you don't get paid, then you're in deep trouble."

Rep. Henry Waxman (D-Beverly Hills), whose office was contacted by at least two dozen doctors, called the transition to the new contractor "marred by missteps."

"I have been hearing from numerous doctors who have been waiting for months for hundreds of thousands of dollars in reimbursements," he said in a statement. "The delay in payments threatens to compromise patient care and provider solvency."

Palmetto has also been the subject of complaints from doctors in Nevada, which switched to the processing firm in August. The state has the fastest-growing Medicare population in the nation.

"If we're still dealing with this in January or February, Medicare patients are going to have serious access problems," said Larry Mathies, executive director of the Nevada State Medical Assn.

So far, Medicare patients have been largely insulated from the reimbursement fight, though they may have difficulty making new appointments. Some doctors, particularly those with specialties that get minimal Medicare reimbursements, say this could be the tipping point that makes them abandon their participation in Medicare altogether.

"There are patients waiting to be seen, and I can't see them," Wong said. "Without completing my enrollments, I can't take Medicare patients."

Mike Barlow, a Palmetto vice president who oversees California, Nevada and Hawaii, said company officials are aware of the issues and have acted to address them. The company has hired and trained more people to field calls. Teams are in place to fast-track the most severe cases. This week, some Palmetto staffers were on site in Reno and Las Vegas trying to process complaints in person.

"We are accelerating to the extent that is humanly possible," Barlow said. Palmetto has taken the brunt of the doctors' ire. The cover of Southern California Physician magazine that hit mailboxes this week features a huge picture of a cockroach, also called a Palmetto bug, with the word "INFESTATION!" stripped across the front. The article opens with one doctor telling Barlow, "I wish I had a tomato," as he stood before an angry crowd at a California Medical Assn. meeting last month.

Critics of the switch say the federal Medicare agency is also to blame for undertaking two major transitions within months of each other. In an effort to cut costs, the agency picked a contractor that was not equipped or prepared to handle California's Medicare providers, they contend.

But federal officials defend the choice. Torris Smith, an associate regional administrator for the agency, said Palmetto has more than 40 years of experience as a Medicare contractor and was selected after a "full and open competition."

Some Employers Are Viewing Consumer-Directed Health Plans as Retiree Savings Vehicles

Reprinted from INSIDE CONSUMER-DIRECTED CARE, By Michael Carbine, Editor, (mcarbine@aispub.com)

The Kaiser/HRET 2008 employee benefits cost survey and a summary of the Towers Perrin 2009 Health Care Cost Survey, both released on Sept. 24, find that companies view CDH plans as a vehicle for managing their costs and continuing to provide their employees with health benefits.

But the Towers Perrin survey of 321 of the nation's largest employers, covering 6.6 million employees, also suggests that large employers view CDH plans as a way to help their employees prepare for medical expenses in retirement. The final version of the report will be released in early January 2009.

Towers Perrin says employers are viewing CDH plans as one solution to their continuing ability to offer affordable health benefits to their employees and, especially, retirees. The survey found that 58% of "high performing companies," defined by Towers Perrin as companies that focus on supporting and improving employee health and rigorously managing their health plans, say their CDH plans are helping them control employee costs. Over half of the companies surveyed say they are offering or will offer a CDH plan in 2009 (up from 46% in 2008), and that most will have an HSA rather than an HRA feature. This, Towers Perrin says, indicates employer interest in providing wealth-accumulation vehicles for retiree medical benefits.

But the Towers Perrin survey also finds that only half of employees participating in HSA-based plans, on average, contribute to the account. Ron Fontanetta, principal in the company's health and welfare practice, says this indicates that while CDH plans deliver lower costs, employers (and employees) "still have work to do to more effectively use these plans to support the wealth accumulation that active employees will need when approaching retirement." Overall, he says, "employers and employees may not yet have developed the mindset required to take full advantage of this new benefit approach."

Analysts caution that this new retiree benefits approach has its limitations, however. An August 2008 report from the Employee Benefits Research Institute concluded that statutory limitations on contributions and other factors make it unlikely that such accounts will play more than a minor part in retiree savings strategies. The report concludes, "The maximum savings that can be accumulated in an HSA will be far from sufficient to fully cover the savings needed in retirement for insurance premiums and out-of-pocket expenses."

The EBRI report was published in the August EBRI Notes and can be viewed at www.ebri.org.

Family Security And Employee Benefits

(NAPSI)-The choices you make in your employer-sponsored group benefits can be much more important than many realize. Having too little life and disability income insurance might have severe, lasting effects on your family if something were to happen to you or your spouse. In a recent survey of 1,000 Americans conducted by Ipsos Public Affairs, 67 percent of survey respondents said that their death or the death of their spouse would be a much greater threat to their family's future financial situation than falling home prices, an economic recession or rising interest rates.

The difference in one group life or group disability income option versus another could add up to hundreds of thousands of dollars in financial stress should you have to rely on the insurance. One reason people often select employer-sponsored life insurance coverage with only a few seconds of thought is that it's seemingly such an easy decision. Many companies provide the equivalent of one times salary automatically, then let the employee add three or four times their salary in additional coverage for a competitive monthly cost. So adding one times salary to their coverage seems like plenty to cover things, but rarely is this the case.

"Premature death and prolonged disability always seem to happen to someone else, not to us, so it's natural for people to underestimate the importance of having solid coverage," said Ivan Gilreath, president of ING Employee Benefits. "Yet, every day, people suffer these losses and the degree of resulting stress often comes down to several dollars in monthly premium deducted from your paycheck--based on a hasty decision you made months before during benefits enrollment."

Gilreath points out that U.S. Department of Labor rules stipulate that most employees are allowed to change group benefit options once each year, generally coinciding with the calendar year. The autumn months are sometimes known as benefits enrollment season, as employers work to finalize plan participation before the beginning of each year, according to Gilreath. ING Employee Benefits' insurers, ReliaStar Life Insurance Company and ReliaStar Life Insurance Company of New York, currently provide group life insurance coverage for about 4.4 million Americans through various employers and affiliate groups.

How Much Insurance Do You Need?

Here are a few factors to consider as you determine how much coverage you may need while looking ahead to your employer's annual benefits enrollment process.

• Your home. Maybe your family wouldn't want to pay off the mortgage if you were to die. But, at the very least, you may want to consider leaving an amount that might serve to pay down the mortgage amount enough to lower monthly payments.

• New debt. Have you taken out a home equity loan in the past year or so? Or increased balances on your credit cards? These numbers may not seem like much, but stretched out over many years, they alone may prompt the decision to add another "one times salary" to your group life coverage.

• Future costs. Do your kids aspire to be scientists, artists or CEOs? While you may not be able to fund everyone's college plans through a group life policy, it makes sense to factor these important goals into your life insurance equation. Don't look at projections of college tuition increases and just throw up your hands. Any money, saved carefully, can help down the road.

Decisions On Group Insurance Benefits

Once you've made your selections, make sure to clearly communicate them to your spouse and share any supplemental materials the insurer might provide. For example, some companies provide a comprehensive package of support services to beneficiaries. These might include special withdrawal accounts for your beneficiaries to help them access their death benefit dollars, toll-free bereavement hotlines to get help with questions and concerns, and booklets and other resources to help them deal with legal and financial issues.

Spend a little time choosing your insurance coverage so you'll be preparing your family well for an uncertain future.

For help in developing a comprehensive benefits package, please contact Ray Ward at Legacy Benefits & Insurance Services.