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

methods of costing, Q.2  Explain different methods of costing. Your answer...

Q.2  Explain different methods of costing. Your answer should be studded with examples (preferably firm name and product) for each method of costing.

Balance sheet and income statement, 1) The detailed information is on the s...

1) The detailed information is on the second tab marked "Financials". Enter summarized Balance Sheet and Income Statement information for Cummins into the template on the "Summary

I. To disengage government from economic or business activit, i. To disenga...

i. To disengage government from economic or business activities in which it has no competence or in areas where the private sector is more competent. ii. To make the enterprises a

Accounting standard, redemption of debentures by sinking fund method

redemption of debentures by sinking fund method

Break-even point, am trying to figure out the break-even point in units usi...

am trying to figure out the break-even point in units using the mathmatical equation. the numbers i have are unit selling price $520, the variable costs per unit are $312 and fina

Business during year, No.         Account Title                         ...

No.         Account Title                                                                                     Debit                     Credit 101         Cash . . . . .

Compute the present value, Q. Compute the present value? The offer for...

Q. Compute the present value? The offer for the manufacturing rights is for a ten-year period. Annual after-tax cash flow after Year 4 = $660000 Present value of this c

List the various methods of determining goodwill, Question 1 Explain the f...

Question 1 Explain the five accounting concepts with an example Separate entity concept Going concern concept Money measurement concept Cost concept Dual aspect

Return on Equity, Maghrabi Enclosure follows a moderate current asset inves...

Maghrabi Enclosure follows a moderate current asset investment policy, but it is considering whether to shift to a different strategy. The firm''s annual sales are $500,000; its f

Characteristics of accounting information?, According to the FASB, the usef...

According to the FASB, the usefulness of accounting is judged by which of the following two qualitative characteristics of accounting information? Comparability and neutrality Unde

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