It’s time for open enrollment on insurance plans for thousands of companies and their employees across America.
Many corporations are changing health care insurance options available to their employees; much of that change is cost-shifting in response to the new Health Care Plan recently passed by the government.
Some employers are now offering only high deductible health plans (HDHP) with the options being $1500 or $3000 annual deductibles.
To help defray some of the out-of-pocket expenses on those HDHPs, companies are giving their employees a Health Savings Account. The HSA accounts are "seeded" or partially funded by the employer. Employees are eligible to continue adding funds to the account with monthly pre-tax contributions; that is unless you are a veteran who also uses the VA.
By law, only employees who have a high deductible plan are eligible to use health savings accounts.
Why would this hit the radar of the National Military Examiner?
Because due to a 2004 IRS law there is an unintended consequence for military veterans who would otherwise benefit from employer funded health savings accounts.
A veteran who has used the Veterans’ Administration three months prior to enrollment is NOT eligible to make Health Savings Account (HSA) contributions or receive HSA funds contributed by their employer, even if that service was for a war-related injury or illness.
Additionally, military (or retired) personnel who use TRICARE or the Veterans' Administration hospital are not eligible to use an HSA because coverage options do not meet the minimum annual deductible requirements.
In a nutshell, this IRS ruling means work-force veterans will not be able to use millions of dollars in employer funded Health Savings Accounts that are made available to their non-veteran co-workers. Many of these veterans have recently served combat tours.
This IRS law is an obvious oversight with an unintended consequence by lawmakers.
U.S.Senators and Representatives need to have this IRS ruling called to their attention for immediate revision.
Examiner’s Note: Being perfectly clear, this is an IRS ruling and has nothing to do with employers, other than the fact they have chosen to offer only high deductible plans to their employees.
The following is an excerpt from the IRS ruling:
Q-5. If an otherwise eligible individual under section 223(c)(1) is eligible for medical benefits through the Department of Veterans Affairs (VA), may he or she contribute to an HSA?
A-5. An otherwise eligible individual who is eligible to receive VA medical benefits, but who has not actually received such benefits during the preceding three months, is an eligible individual under section 223(c)(1). An individual is not eligible to make HSA contributions for any month, however, if the individual has received medical benefits from the VA at any time during the previous three months.
Q-6. May an otherwise eligible individual who is covered by an HDHP and also receives health benefits under TRICARE (the health care program for active duty and retired members of the uniformed services, their families and survivors) contribute to an HSA?
A-6. No. Coverage options under TRICARE do not meet the minimum annual deductible requirements for an HDHP under section 223(c)(2). Thus, an individual covered under TRICARE is not an eligible individual and may not contribute to an HSA
Comments
One unintended consequence as a result of the new healthcare reform is that employers are moving to no co-pay high deductible health plans to lower their premiums and at the same time asking employees to pay a larger percentage of the premiums. Between having to pay for their own healthcare until the deductible is met and the added premiums, employees have much higher out-of-pocket costs. The unintended consequence? People are forgoing seeking treatment for routine illnesses, which can often result in a worse illness down the line that requires more expensive treatment. With WhiteGlove (www.whiteglove.com) you don't have to put it off, WhiteGlove members seek care early to avoid being sick a long time and it just costs them $35 a visit.
It is time for all Military and Retired Military to do what other groups do. We start a class action law suite against the IRS, Congress, and the Administration, not only on the grounds of not providing equal coverage through the Health Care Coverage Law, but also as a discrimination against veterans and active duty military. How many are now ready to stand up and be counted before we have no benefits left.
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