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How health benefits might change in 2017 based on the election

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One of the most memorable achievements of the Obama administration is the Affordable Care Act (ACA). The bitter debates about this legislation that started long before its passage continue to this day—becoming a focal point of the 2016 presidential campaign. With the election still a few months away, it’s unclear exactly how healthcare and the ACA will be affected. What is clear, though, is that each candidate believes he or she has the right solution to fix America’s ailing healthcare system.
how benefits might change in 2017
Our Healthcare Services Chairman, Dennis Triplett, explores how each presidential candidate’s health care platform could impact employee benefits and businesses.

  • How we’re still feeling the Bern as Bernie Sanders continues to influence the Democratic health care conversation.
  • How might Hillary Clinton’s healthcare ideas play out?
  • Can Donald Trump repeal the ACA?
  • How might HSAs be affected?
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Of course, we recognize that as with all things political, anything could change.

Still feeling the Bern

Will we still feel the Bern of free healthcare? Bernie Sanders may not have won the Democratic Party nomination, but he has shaped and influenced the party’s platform on several key issues—including health care.

For him, the ACA isn’t good enough because 29 million Americans are still uninsured. And many who are insured can’t afford their deductibles.

The Sanders’ plan would have expanded Medicare to all Americans.

This has the benefit of separating health insurance from employment, which gives employees the freedom to change jobs or start their own business without the worry of losing health insurance.

He also suggests that it also would be a benefit to employers who no longer have the need to administer benefits plans and can focus more time and resources on running their core businesses.
Bernie Sanders
Leave no one behind

  • Medicare for all.
  • Separate health insurance from employment.
    • Employees can change jobs without fear of losing health insurance.
  • Employers can focus on running their businesses—not administering benefit plans.

Pros

  • Coverage for all Americans.
  • Relieves employers of a huge expense.

Cons

  • No out-of-pocket maximums on Medicare, and other coverage gaps.
  • Benefits become less of an employment differentiator.

How might Hillary Clinton’s policy ideas play out?

Clinton believes her more progressive approach on health care could help her with her base in the matchup against Trump. Her primary focus is on making the ACA work, and following President Obama’s lead she’s pledged to defend it against GOP efforts to repeal it.

  • Stay the course and make incremental changes
  • Make premiums more affordable and lessen out-of-pocket expenses.
  • $5,000 tax credit for families with out-of-pocket costs over 5 percent of their income.
  • Enhance premium tax credits.
  • Block or modify unreasonable health insurance premium rate increases.
  • Support new incentives to encourage all states to expand Medicaid.
  • Expand Medicaid in every state.
  • Invest in navigators, advertising and other consumer outreach.
  • Expand access to ACA exchange to families, regardless of immigration status.
  • Continues to support a “public option” to reduce costs and broaden the coverage choices.
  • Establish a federally run public option
  • Allow people to enroll in Medicare earlier, at age 55
  • Increase federal funding for community based health centers by $40 billion over the next decade.
  • Proposed a package of additional reforms.
  • Lower out-of-pocket costs, such as co-pays and deductibles.
  • Reduce the cost of prescription drugs.
  • Reward value and quality.
  • Expand access to rural Americans.
  • Provide women access to reproductive health care.

Can Trump repeal the ACA?

As just about everyone knows, Trump has branded himself as both the anti-establishment and the anti-ACA candidate. If elected, he promises his first order of business will be to ask Congress to immediately deliver a full repeal of Obamacare.

“No person should be required to buy insurance unless he or she wants to.”—Donald Trump

Trump’s plan:

  • Replace ACA with free market reforms to the health care industry that will broaden access and improve affordability and the quality of care.
  • Allow the sale of health insurance across state lines.
  • Tax credit for families that don’t have employer coverage.
  • Make health insurance premium payments tax deductible.
  • Establish high-risk insurance pools.
  • Work with states to review Medicaid options.
  • Provide block grants to states.
  • Incentivize states to remove fraud and waste from the system.
  • Raise the Medicare eligibility age from 65 to 67.
  • Price transparency and consumer tools.
  • Consumers could shop for health care like they do other products.
  • Allow cross-border prescription drug purchases.
  • Health savings accounts for all.
  • Tax-free contributions.
  • Appealing to younger people.
  • Account balance can be used by any family member without penalty.
  • Inheritable without a penalty.

Trump will most likely let Congress take the lead on these proposed reforms since healthcare is not one of his key platform issues.

Trump promises that his administration would require price transparency from all health care providers, especially doctors and health care organizations like clinics and hospitals. Individuals would be able to shop for health care like they do other products so that they can find the best prices for procedures, exams or any other medical-related service. On a related note, the lack of price transparency has been one of the biggest challenges for people with HSAs.

Future of ACA

Unlikely to be replaced because of political obstacles and devastating effect on covered individuals but…

Despite the pre-election banter, my view is that it’s unlikely that the ACA will be going away any time soon.

As you’ve heard, the political obstacles associated with repeal are tremendous.

While I think full or total repeal is unlikely, change is inevitable regardless of whom our next President will be. So following the election, I think I would characterize the degree of probable change as mild to wild. Mild if we have a Democrat in the oval office to wild if we have a Republican. And that change will likely come in the President’s first 12-18 months in office as he or she puts their election mandate to the test. Change will be tempered by the Senatorial elections and we should keep our eyes on those races.  The House will likely remain in the Republican camp and the Speaker Ryan will have an influential role in how healthcare is reshaped in our country.

 

The content above represents the author’s personal views and not those of UMB Bank or UMB Financial.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

 


Dennis Triplett is chairman of UMB Healthcare Services. He has responsibility providing strategic direction and insights to the leadership team. Dennis has more than 29 years of experience in the banking industry. He currently serves as Chairman of American Health Insurance Plan’s (AHIP) HSA Leadership Council, Board Member and past Chairman of the Employer’s Council of Flexible Compensation (ECFC), and a Charter member of the American Bankers Association HSA Council.



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How to manage healthcare costs: now and in retirement

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UMB Bank’s Chief Investment Officer, KC Mathews and Dennis Triplett, Chairman of UMB Healthcare Services, sat down to discuss the rising costs of healthcare and the question on so many minds—how you can adequately plan for medical expenses during and even before retirement begins.

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Dennis Triplett is chairman of UMB Healthcare Services. He has responsibility providing strategic direction and insights to the leadership team. Dennis has more than 29 years of experience in the banking industry. He currently serves as Chairman of American Health Insurance Plan’s (AHIP) HSA Leadership Council, Board Member and past Chairman of the Employer’s Council of Flexible Compensation (ECFC), and a Charter member of the American Bankers Association HSA Council.



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Moving the needle for healthcare in America

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healthcare in America

With all of the regulation changes Americans and American businesses are witnessing in health care today, the importance of understanding health savings accounts (HSAs) has never been greater. An HSA is a tax-exempt trust or custodial account which enables consumers to set aside money for current and future qualified medical expenses not covered by a medical plan. A potentially valuable account in today’s world of rising healthcare costs. And at UMB Healthcare Services, we’re introducing a tool to enhance that value for employers and employees.

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According to a recent AHIP report, nearly 15.5 million Americans are enrolled in HSAs, and that number will only continue to rise. But how many of those Americans and their employers are taking full advantage of the possibilities these accounts offer? We can only know through proper reporting.

While the HSA industry has remained focused on the administration of these accounts – enrollment, opening accounts and contributions – UMB Healthcare Services has put data reporting front and center by introducing HSAWorksTM. In the nearly 10 years since the introduction of HSAs, traditional reporting, when available, has given visibility to average account balances and confirmation if individuals were investing or not. Lack of clarity and further analysis of these numbers has made it cumbersome for employers to create benchmarks for success in their own benefit plans.

With HSAWorks, the industry’s most advanced reporting and first-ever analytics tool, brokers, third-party administrators, health plans and employers are supplied with actionable analytics to achieve desired plan results. Rather than basic metrics, this industry-leading HSA reporting tool empowers employers to drive positive change with their plan and improve employee health and well-being by understanding the data. Now, employers and employees can benefit from all of the possibilities an HSA provides, including and most importantly, influencing health.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Dennis Triplett is chairman of UMB Healthcare Services. He has responsibility providing strategic direction and insights to the leadership team. Dennis has more than 29 years of experience in the banking industry. He currently serves as Chairman of American Health Insurance Plan’s (AHIP) HSA Leadership Council, Board Member and past Chairman of the Employer’s Council of Flexible Compensation (ECFC), and a Charter member of the American Bankers Association HSA Council.



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Building long-term wealth with your HSA

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So you know what a health savings account (HSA) is and that you can use it for long-term savings. Now what? How exactly do you use your HSA as a savings tool? You can use them as a compliment to your retirement strategy to build wealth for qualified2 medical expenses, including tax-free Medicare premiums.

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Don’t sell yourself short

According to the Devenir Year-End 2012 survey, the average HSA individual account balance was $1,807. Most people aren’t taking full advantage of their HSA. The IRS allows a maximum HSA contribution of $3,250 for individuals1 or $6,450 for family1 coverage for 2013 (plus a catch-up amount of $1,000 more for people over 55 years old).

Medical costs are a major financial burden for retirees. Fidelity’s widely-recognized annual study shows an average healthy couple retiring in 2012 at age 65 needed $240,000 for out-of-pocket health care costs (after Medicare and not including long-term care costs).

Everyone faces the possibility of high medical costs in their later years so you should start planning sooner rather than later. Starting to save earlier adds more to savings, and delays limit the amount of the nest egg. Long-term returns may vary, but like all savings plans, it’s always a good idea to start early.

Gain triple tax advantages

It’s also a good idea to always first take advantage of any offered match for your HSA or 401(k). While many further invest in their 401k or IRAs, your HSA may be a more appealing choice in terms of flexibility, tax advantages and long-term growth potential.

It’s important to consider taxes in long-term investing because of the compounding of savings. The comparison chart below shows the key tax considerations for each type of account.

 Building long-term wealth with your HSA

 * Not taxed if funds are withdrawn for qualified medical expenses.
**  Tax references are at the federal level.  States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions. If you have questions about your tax implications, consult your tax advisor.
***
Investment products are not FDIC insured, have no bank guarantee, and may lose value.

HSAs have the potential to offer triple tax advantages for individuals – something not seen in other retirement accounts. Only an HSA offers tax benefits at deposit**, during the account’s life and upon a qualified2 medical expense withdrawal. So a person saving for future medical needs can avoid taxes at all three stages in this life cycle.

Invest for long-term growth

Major HSA providers now offer multiple investment options. Learn more about what kind of investment options are available with your employer’s HSA. If your HSA encourages long-term savings, consider participating in the multiple investment options available. And take advantage of any tools offered by your employer to help you plan for the future, including investment objectives, risk tolerance and mix of assets across all accounts.

You have an opportunity to prepare for future health care expenses during retirement or later in life. Start learning more about your employer’s HSA and how you can use it to your advantage.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

 

1 If you do not meet HSA eligibility requirements for the full tax year, you may not be able to contribute the maximum amount. Please consult your tax advisor or employer for more information.

2 Qualified medical expenses are those defined under Section 213(d) of the Internal Revenue Code.

 

Investments in securities, whether through a Money Market Sweep Account or through a Self-directed Brokerage Account are:

Not FDIC-Insured • May Lose Value • No Bank Guarantee.

 Securities  through your self-directed HSA brokerage account are offered through UMB Financial Services, Inc., member FINRA (www.finra.org), SIPC (www.sipc.com).  UMB Financial Services Inc. is a subsidiary of UMB Bank, n.a. UMB Bank, n.a. is a wholly owned subsidiary of UMB Financial Corporation. UMB Financial Services, Inc. is not a bank and is separate from UMB Bank, n.a. and other banks.


Dennis Triplett is chairman of UMB Healthcare Services. He has responsibility providing strategic direction and insights to the leadership team. Dennis has more than 29 years of experience in the banking industry. He currently serves as Chairman of American Health Insurance Plan’s (AHIP) HSA Leadership Council, Board Member and past Chairman of the Employer’s Council of Flexible Compensation (ECFC), and a Charter member of the American Bankers Association HSA Council.



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Making the most of your HSA

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As health savings accounts (HSAs) become more popular with employers and employees, you should be well-informed about the benefits and rules around this option. For example, did you know you can use an HSA as a savings/investment tool? Most HSAs are tax-advantaged, offer investment options and you can use them in retirement planning.

So, what else do you need to know? To get the most out of an HSA, you need to understand some of the long-term benefits of this health care savings strategy and what options are available when you sign up for an HSA.

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  • Move past the “use it or lose it” mentality

    HSAs are different than flexible spending arrangements (FSAs), because your unused HSA balance rolls over from year to year so you will not give up the money and your account may grow over time. FSA funds that aren’t used by the customer within a certain time period are lost.Here is an example of how an HSA can be used to save for future expenses.You’re a generally healthy, 20-something male who doesn’t have many major health care expenses. You would like to save for future health care expenses for when you start a family or possibly for when you are closer to retirement age and are more likely to have substantial health care costs. You should consider an HSA.

  • Take a long-term view

    Eligible HSA deposits are tax-deductable, earnings grow tax-free‡(1), and withdrawals for qualified medical expenses are tax-free1. These features may make the HSA a more appealing choice than other tax-advantaged financial instruments such as an IRA. With an IRA, you will pay income tax on your withdrawals used to pay for medical expenses and you may have to pay a penalty for withdrawing money too early. If you withdraw from an HSA for a non-qualified medical expense, you will have penalties and tax implications similar to an IRA.Many HSAs offer investment options. You can invest part or all of your HSA into money market accounts‡(2),or self-directed brokerage accounts (3) for mutual funds or individual stocks. Like all investments, other factors will determine the actual returns on those made within an HSA, but the reality is that these options are underutilized by most HSA accountholders.

  • Learn more and determine next steps

    If your company offers a high-deductible health insurance plan with an HSA, talk to your benefits department about what is included with the HSA. Determine if an HSA is right for you at the time. Many benefit partners will offer “people like me scenarios” to give you a better idea of how you can benefit from an HSA.Here is another example of how an HSA can be used to save for future expenses within a shorter timeframe.

    You’re a woman in your 50s and you are preparing for your retirement in the next 10 to 15 years. You have noticed that your health issues are more frequent and more expensive. You realize that the HSA makes the most sense for you to start investing in now, while you’re still eligible. You also learn that you can make a catch-up contribution to your HSA since you are over age 55. It’s not too late for you to consider an HSA.

To learn more, click here.

UMB CFO Mike Hagedorn discusses the innovation of HSAs and how they have become an important part of the payments industry. He explains the distinction between product and innovation and how a company can poise itself to be a leader in innovation.

 

1All mention of taxes is made in reference to federal tax law. States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions.  Please check with your state’s tax laws to determine the tax treatment of HSA contributions, or consult your tax adviser. Neither UMB Bank n.a., its parent, subsidiaries nor affiliates are engaged in rendering tax advice.

2 Contributions up to the $1,000 peg balance are FDIC insured.  Any funds over the peg balance that are swept into a money market mutual fund are not insured or guaranteed by the FDIC or any other governmental agency.  Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market mutual fund.

3 Investments made through your HSA Self-Directed brokerage account are not FDIC insured.  Investments offered through UMB Financial Services, Inc., member FINRA, SIPC.  UMB Financial Services, Inc. is a subsidiary of UMB Bank n.a.  UMB Bank n.a. is a wholly-owned subsidiary of UMB Financial Corporation.  UMB Financial Services, Inc. is not a bank and is separate from UMB Bank n.a. and other banks.

Investments in securities, whether through the money market sweep account or through other investment options available in the self-directed brokerage account are:

Not FDIC-Insured · May Lose Value · No Bank Guarantee

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Dennis Triplett is chairman of UMB Healthcare Services. He has responsibility providing strategic direction and insights to the leadership team. Dennis has more than 29 years of experience in the banking industry. He currently serves as Chairman of American Health Insurance Plan’s (AHIP) HSA Leadership Council, Board Member and past Chairman of the Employer’s Council of Flexible Compensation (ECFC), and a Charter member of the American Bankers Association HSA Council.



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