Hsa advantages , Financial Accounting

Assignment Help:

A HEALTH SAVINGS ACCOUNT AT FRONTLINE PR

Susan Berry just returned from a national conference on compensation and benefits where she attended a session on Health Savings Accounts (HAS). Susan is the Human Resources Director at Frontline PR and her company has been struggling with the cost of healthcare insurance. After speaking with several experts at the conference, Susan now thinks an HAS might be a viable option for the company. Frontline PR is a public relations firm located in the Northeast that employs close to 150 people in four different offices. Public relations professionals make up most of the staff, but they also employ a complete administrative and operations staff. All of Frontline's employees work full time schedules and are eligible to participate in their healthcare insurance plan. Frontline currently offers a standard fee-for-services healthcare insurance option. The plan has a modest deductible of $300 per year and a 20 percent coinsurance requirement. In addition, the company offers a Flexible Spending Account (FSA) that allows employee's to set aside pretax earnings to pay for the deductible, coinsurance, and other medical expenses. Susan is considering offering a HAS along with high-deductible health insurance plan instead of the current insurance plan and FSA. At the conference, Susan learned that making such a change could result in significant cost savings for a company. The high-deductible health insurance plan would cost a lot less for a company than the standard fee-for-services plan that Frontline currently offers. While Susan suggest the Frontline make contributions to each employee's HAS, the overall costs for the healthcare benefit would still be less than its current option. Beyond cost savings on premiums, many believe that consumer-driven healthcare tends to reduce overall healthcare costs. Some of the experts Susan spoke to at the conference stated that when employees have a greater say in their healthcare decisions, they make wiser decisions and do not spend as much on healthcare. Susan has discussed the HAS option with Frontline's Director of Finance, Allison Jones. From the financial perspective, Allison agrees that the option would be a good step to start controlling healthcare costs. However, as an employee who would use the benefit, Allison isn't so sure that an HAS with a high-deductible health insurance plan is the right option for the company. Based on Susan's initial explanation, Allison didn't really understand how the HAS worked. Further, she was concerned that she would have to spend more out of pocket on her own healthcare. Susan is convinced that the HAS option would offer a significant cost savings to Frontline. However, after her discussion with Allison, Susan is still unsure if it is the right path to recommend for her company.

QUESTIONS:

1. What are some advantages of implementing the HSA option?

2. What are some potential disadvantages of the HAS option?

3. What do you recommend? Why?


Related Discussions:- Hsa advantages

What is comparability, What is Comparability This quality would en...

What is Comparability This quality would enable users to identify changes in the business over time (for instance, trend in sales revenue over the past five years). It wou

Financial accounting regulation, Carminho Building Products Ltd (an Austral...

Carminho Building Products Ltd (an Australian company) is a client of Rodrigues Accounting (RA). Carminho Building Products Ltd (CBP) is involved in the development, manufacture a

Estimate the expected return, Case study Josephine Josephine has jus...

Case study Josephine Josephine has just landed her first job out of graduate school.  She is lucky enough to be working for one of the Big Four, earning $50,000 per year.  S

Describe how it is helpful for management decision makings, Question: (...

Question: (a) Describe how cost concepts and behavior can be important to Management. (b) What do you meant by "flexing" the Budget? Describe the importance of flexible bud

Looking for income statement and balance sheet, Looking for Income Statemen...

Looking for Income Statement and Balance Sheet for the Better USA, Inc. company for 2010 and 2011 Facts: Sales 11,573 (2010) and 12,936 (2011) - Depreciation 1,661 and 1,736 - Cost

Fund accounting and preparation of financial statements, Fund accounting an...

Fund accounting and preparation of financial statements) The scenario: At the start of the year beginning January 1, 2013, Coco City's General Fund had a cash balance of $40,000, v

Non-for-profit organization, Non-for-Profit Organization/Tax-Exempt Organiz...

Non-for-Profit Organization/Tax-Exempt Organization - An incorporated organization that exists for charitable or educational purposes, and from that its shareholders or trustees do

Determine balance sheet, Determine balance sheet: Income Statements ...

Determine balance sheet: Income Statements Year Ended December 31, 20X8   Insure Co. Go-med Co. Sales $3,900,000

Hat is the after-tax cash flow from the salvage value, 48 Morgado Inc. has ...

48 Morgado Inc. has provided the following data to be used in evaluating a proposed investment project: Initial investment $130,000 Annual cash receipts $78,000 Life of th

Atriculation of Statements, What information goes on each sheet of an Artic...

What information goes on each sheet of an Articulationof statements, i.e. the Data Entry sheet, the Trial Balance sheet, the Single step Income statement, multi-step income stateme

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd