Health insurance deadlines and reminders for employers and employees
By: Benefits by Design | Tuesday November 21, 2023Updated : Monday November 20, 2023
Health insurance deadlines are approaching along with the end of the year. That’s why we’re reminding you of all the important deadlines and changes that occur when the benefits plan resets at the beginning of the year.
Spending account reminders and deadlines
There are two types of spending accounts. Health care spending accounts (HCSA)s provide coverage for medical items and services, while lifestyle spending accounts (LSA)s provide coverage for – you guessed it – lifestyle services and items.
Everything You Need to Know About Spending Accounts
Most spending accounts will reset with the calendar year (check with your provider if you are unsure). Which means on December 31st, any unused balances will be either forfeited or carried forward to be used the following year.
Current year claims
Any claims that were incurred in the current year should be submitted for reimbursement. There is usually a grace period after December 31st which allows plan members to submit claims from the previous year. However, not all plans have this option. Therefore, it is important to double check with your plan administrator or provider to confirm:
- If there is a grace period to submit claims; and
- How long the grace period is for submissions. Some plans offer 30 days, others offer 90 days.
Regardless of whether you have a grace period for claims submissions, the sooner you submit your spending account claims the sooner you will be reimbursed. Plus, it means you won’t accidentally miss the submission deadline.
Not everyone will have eligible expenses up to the total allocation amount. In fact, Benefit by Design’s (BBD)’s clients use between 40% to 50% of their HCSA dollars each year. Employees are essentially leaving free money on the table. On the other hand, there’s no reason to spend medical dollars if they are not needed.
This is where balance carry-forward can help. It allows employees who do not spend their total allotment to carry-forward unused amounts and use them towards claims in the next calendar year. Any claims submitted the following year would come out of the previous year’s amount first. Some plans offer claims carry-forward as well.
Learn more: Spending Account Claims Deadlines and Carry-Forward Rules
Health and dental premiums
Sometimes even with balance carry-forward, employees may find they are not using the full allotment each year. Especially those employees who have a HCSA combined with fully-insured health and dental. These employees are in luck! When employees pay 50% of their health and dental premiums – known as a cost sharing arrangement – they can submit those premiums to their HCSA.
This is a useful attraction and retention tool for healthy employees, who may begrudge having to pay those premiums if they are not utilizing the health and dental benefits. This way, they have the coverage for a catastrophic event, but aren’t paying out-of-pocket for unused benefits.
List of Health Care Spending Accounts (HCSA) Eligible Expenses
Health and Dental insurance deadlines and reminders
The insurance deadlines for health and dental are similar to spending accounts, in that they usually coincide with the calendar year. And that there is usually a grace period after the year ends in which to submit claims.
Claims submissions deadlines for current year’s claims
It is always best to confirm with your insurance provider how long you have to submit claims from the previous year. Some companies allow up to three or six months, some allow up to 12 months. While others only allow one month. No matter the length of time, claims must be submitted prior to that deadline.
Annual maximums reset
On January 1st of each year plan member’s annual maximums will be reset. That is, if your plan is set up to coincide with the calendar year. This means that plan members who have used the full amount for certain services or medical supplies can start claiming again or resume treatment. Examples of services or items that reset are:
- Dental maximums for both basic, major restorative and orthodontics
- Paramedical maximums – massage therapists, chiropractors, psychologists, physiotherapists, etc.
- Diabetes supplies
- Prescription drugs (if there is a drug maximum)
Depending on the benefits plan, certain items, like hearing aids, could be tied to a frequency limit instead of an annual maximum. In such a case, the maximum does not reset each year. Instead, it resets after a certain number of years or months has elapsed since the previous purchase.
What You Need to Submit Medical Claims Under a Group Insurance Plan
New tax reporting obligations for the Canadian Dental Care Plan (CDCP)
When the government of Canada released the 2023 budget, they included the new Canadian Dental Care Plan (CDCP). To ensure that only eligible persons receive the benefit, there is a new tax-reporting obligation. Employers are required to report on a T4 or other tax slip whether or not their employees or dependents had access to dental care insurance. This obligation will start with the 2023 tax-reporting cycle.
In order to facilitate this, a new box has been added to the forms. Employers must enter a code to indicate whether dental care insurance was available to their employees and/or dependents in 2023. Employees that have a HCSA are considered to have access to dental care.
Here is a breakdown of the codes (the payee is the employee):
- Code 1 – No access to any dental care insurance, or coverage of dental services of any kind.
- Code 2 – Access to any dental care insurance, or coverage of dental services of any kind for only the payee.
- Code 3 – Access to any dental care insurance, or coverage of dental services of any kind for payee, spouse and dependents.
- Code 4 – Access to any dental care insurance, or coverage of dental services of any kind for only the payee and their spouse.
- Code 5 – Access to any dental care insurance, or coverage of dental services of any kind for only the payee and dependents.
As always, we encourage you to speak with your tax authority if you have any questions or concerns.
National Dental Care: Eligibility and Impacts on Group Dental Plans
The end of the year brings a host of responsibilities and tasks that need to be completed. Insurance deadlines and plan resets included. Remind employees to submit those claims as soon as possible to ensure reimbursement. It can also be helpful to remind them of the grace period length.