With costs spiraling out of control, it is vital that Americans find solutions to the health care crisis in the United States. Benefits are becoming an increasingly larger percentage of employers’ compensation costs. As the predominant buyers of health care, U.S. employers have a vested interest and a responsibility to take action to reduce health care costs and improve medical treatment for their employees.
The requirements of the Privacy and Security Rules of the Health Insurance Portability and Accountability Act (HIPAA) of 1996 affect nearly every U.S. enterprise that provides health care services, sponsors an employee health plan, pays or processes health care claims, or stores and processes health care information. The Final HIPAA Enforcement Rule, which went into effect on March 16, 2006, is a serious matter for all organizations that are subject to the regulations. Failure to comply can result in penalty fines and, possibly, criminal sanctions.
With the advent of consumer-directed health care plans, many organizations are evaluating their health care plan options to realize greater cost efficiencies. While Health Savings Accounts (HSAs) are one option with distinct advantages, these high-deductible health plans may not be the right choice for every employer—or their employees. There is another option to consider: the Health Reimbursement Arrangement (HRA).