The HSA minimum deductible, a benchmark for comparing HSAs with traditional PPO plans, will rise to $2,500 family and $1,250 individual in 2013, the first increase in the past 3 years, according to former Treasury official Roy Ramthun who makes the annual estimate using near-final government data.

A statutory technical freeze on the rise for three years has resulted in the average employee plan deductible without an HSA rising to virtually the same amount as an HSA minimum deductible. This means people who are offered a choice now often see little difference in deductibles if they pick an HSA. From now on, HSAs will probably rise at closer to the same rates as regular HD plans.

Health reimbursement accounts (HRAs) have no minimums on how much the deductible is or the level of the employer contribution. In real market terms, HRAs typically have lower deductibles and generate less out-of-pocket cost than HSAs. So if anything, the faster-rising minimum HSA deductible will make that difference with HRAs even greater from the consumer point of view.

Ramthun also announced that the maximum contribution to HSAs in 2013 will hit a new high of $6,450 family and $3,200 individuals (self-only), plus $1,000 for those over 55 who will be allowed a total of $7,450. Anybody can contribute up to the maximum regardless of their deductible (combined EE and ER), so a rise in the total allowed makes HSAs more attractive as investments.

Click here to access Rick Joyner's benefit blog.

ERRP Funding Exhausted and Closed to New Claims ---- CMS Provides Update on Payment Processing

On February 17, 2012, the Centers for Medicare and Medicaid Services (CMS) published an update on the Early Retiree Reinsurance Program (ERRP), indicating that as of January 19, 2012, $4.7 billion of the ERRP funds have been disbursed. CMS stated that "ERRP has received requests for reimbursement that exceed the $5 billion in funding." Related to ongoing ERRP requirements, CMS announced its expectation that plan sponsors will use the ERRP reimbursement funds they have received or will receive, as soon as possible, but no later than December 31, 2014. CMS also provided reminders of how the reimbursement process and related operations will continue as ERRP approaches the disbursement of the temporary program's $5 billion appropriation. Additionally, CMS indicated that plan sponsors should keep the following information current with the ERRP program:

• Responses to application questions;
• Authorized Representative, Account Manager, and Designee contact information (e.g., email address, phone number, etc.); and
• Bank account information.

Plan sponsors should also notify the ERRP Center if they have identified inaccuracies or changes to previously submitted price concession amounts (such as rebates) in order to obtain instructions on steps necessary to update their data.

For more information: 

• The ERRP press release.
• The February 2012 ERRP progress report.
• The ERRP Common Questions ("Use of Reimbursements" answer).