It’s time again in the US for the annual ritual of Open Benefits Enrollment, where employees register, pick, and choose from the benefits offered to them by their employer.\u00a0 What a stupid system.<\/p>\n
My preparation complaint – why does each company choose their own schedule for this activity?\u00a0 Few households with 2 employed adults have the employers schedule at the same time, so every year it is a guess which employer will have the better option in every category.\u00a0 (I’m not even going to go off on whether funding health care through employers is a good idea or not.\u00a0 Different post, some other time.)\u00a0 Overall, I favor less government involvement in everything – but this is a case where I think a regulation requiring all companies to make their benefits packages known to their employees within a small time window would be A Good Thing.\u00a0\u00a0 Hold the enrollment whenever, but you have to tell your employees what the options are between October 15 and 30 every year, for example.<\/p>\n
My real complaint is the FSA boondoggle.\u00a0 That’s Flexible Spending Account, for those not keeping score at home.\u00a0 This is a plan where you can set aside money directly from your paycheck before taxes are calculated on your pay, into a special account that can be used only for certain health care expenses.\u00a0 The theory is that it “saves you money” by reducing your income tax liability by letting you pay for some health care expenses with pre-tax dollars.\u00a0 (Yes, another overall stupid idea, administration of these things is entirely waste in the overall cost of health care.)\u00a0 But OK, its the game we have to play, so we do it.<\/p>\n
The rules say that whatever you put in that isn’t spent by the end of the calendar year will be lost.\u00a0 Lost?\u00a0 Not exactly – its really profit for the plan administrator.\u00a0 But you can’t have it back or roll it to the next year.<\/p>\n
The rules also say that you can only spend what you put in on expenses incurred in that calendar year.\u00a0\u00a0 There is a grace period for most employers\/plans, where you can submit receipts for payment until the end of the first quarter of the following year.<\/p>\n
Fine, what happens when you incur an expense in November, for example, that the health care provider doesn’t get around to billing for 5 months? (That kind of delay is quite common, as the provider and insurance companies negotiate back and forth about who is going to pay what.)\u00a0 The health care recipient doesn’t know what amount to pay until the insurance companies are done.\u00a0 So the health care recipient gets a bill in April for service rendered in November.\u00a0 But wait, that’s past the first quarter deadline for submitting receipts!<\/p>\n
So sad, too bad, pay it out of pocket.\u00a0 The funds left in the FSA for that expense are profit for the plan administrator, and the health care recipient essentially paid double – once into the FSA, and again out of pocket because the FSA funds were not available.<\/p>\n
So the behavior the brilliant legislators and regulators that came up with this marvel of a plan want to encourage must be: don’t use the health care system\u00a0 in the last quarter of the year for anything that will have a delayed billing.\u00a0 Better to not need any services in the second half of the year, because you don’t know how long the health care providers will take to bill, and you need to leave a good cushion so you can submit the receipts on time.<\/p>\n
What a stupid system.\u00a0 And among the many broken parts of the US health care system that Obama’s health care reform didn’t come close to fixing, and that the incoming Congress doesn’t see a need to fix.<\/p>\n
I repeat – what a stupid system.<\/p>\n","protected":false},"excerpt":{"rendered":"
It’s time again in the US for the annual ritual of Open Benefits Enrollment, where employees register, pick, and choose from the benefits offered to them by their employer.\u00a0 What a stupid system. My preparation complaint – why does each company choose their own schedule for this activity?\u00a0 Few households with 2 employed adults have […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/posts\/332"}],"collection":[{"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/comments?post=332"}],"version-history":[{"count":1,"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/posts\/332\/revisions"}],"predecessor-version":[{"id":333,"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/posts\/332\/revisions\/333"}],"wp:attachment":[{"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/media?parent=332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/categories?post=332"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/dennissherman.com\/dennis\/wp-json\/wp\/v2\/tags?post=332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}