2024 HSA & FSA Contribution Limits – The IRS has announced the 2024 inflation-adjusted amounts for Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) as determined under the Internal Revenue Code. The 2024 annual limit on HSA contributions for an individual with self-only coverage under a high deductible health plan (HDHP) is $4,150 (up from $3,850 for 2023), and family coverage is $8,300 (up from $7,750 for 2023), while the Age 55 HSA catchup contribution max remains the same at $1,000. The 2024 annual dollar limit on employee contributions to a Health Care FSA is increased to $3,200 (up from $3,050 in 2023), and the maximum carryover amount is increased to $640 (up from $610 in 2023), while the Dependent Care FSA contribution max remains the same at $5,000. It is worth noting that the 2024 increases on the HSA annual limits are the highest in the 20-year history of HSAs, going back to when they were first signed into law on December 21, 2003.
Weight Loss Drugs – 2023 has shown a rapidly increasing demand for weight loss drugs, known as GLP-1 inhibitors, which originally were created to treat patients with type 2 diabetes, but also have the added benefit of weight loss. Drugs like Ozempic and Mounjaro typically treat type 2 diabetes and can be covered by insurance carriers (usually with prior authorization required by carrier, medical history provided by doctors, etc.), while Wegovy is for weight loss only and typically NOT covered by insurance carriers. These drugs are expensive (between $1,000-1,500 per month, or over $10,000 per year) and they are one of the big reasons Rx drug inflation (i.e. trend) is at an all-time high – anywhere from 10-15% depending on the source. Insurance carriers will continue to monitor market changes and medication utilization, and their management strategies will be adjusted to balance both members’ needs and employers’ costs.
REMINDER: New 2024 Commuter Benefits Mandate for Chicagoland Employers – As communicated in our last Compass, the State of Illinois has passed the Transportation Benefits Program Act, which will require all Chicagoland employers with 50 or more employees to offer a benefit program for all employees, beginning January 1, 2024. Employees will be able to elect to set aside pre-tax dollars (up to $315 per month) to pay for transit passes (e.g. pass, token, fare card, or voucher for any authority under the jurisdiction of the Regional Transportation Authority). It applies to employers that are headquartered in Chicago and its surrounding counties, that are also located within one mile of a transit service location. Employers can administer the program internally or hire an outside vendor (similar to a FSA/HSA/HRA vendor), so contact your SI team if you are interested in hiring a vendor.
Looking to Enhance Your Benefit Offerings? – As employers continue to battle for both employee retention and satisfaction, many employers are looking to offer more benefit options to stay competitive when hiring in their industry. Further motivating employers is the fact that many insurance carriers give “package discounts” when employers purchase additional lines of coverage. Stumm Insurance’s annual client benchmarking reports the following percentage of employers offered these benefits in 2022: Dental 98%, Vision 92%, Life 74%, Short/Long Term Disability 61%/69%, and Accident/Critical Illness 25%. These benefits can be paid for by the employee OR the employer, so if you would like more information about adding additional plans, feel free to contact your Stumm service team to discuss further.
Should you have any further questions, please feel free to contact your Stumm Insurance Client Service Team.