The CPA’s Guide to Health Care: 2021 Update

In the immediate aftermath of a global pandemic, it makes sense that health care is a hot topic. A new presidential administration is making short work of Trump-era health care rollbacks, while at the state level Illinois is seeing a push to make health care more equitable. There are also new pandemic-specific policies for employers and employees to navigate, changes to how health care is being offered, and overlooked strategies that people could be utilizing.

It can be hard to keep up with all the health care changes already enacted or underway, so here are the five biggest things CPAs should know now to best advise their clients—and make choices themselves.

Restoring ACA

President Joe Biden began his term with a flurry of executive orders, many of which were revisions to Trump’s Affordable Care Act (ACA) rollbacks. So far, the Biden administration has restored funding for navigators and ACA marketplace enrollment outreach to consumers and established an ACA special enrollment period for uninsured and under-insured Americans to seek coverage. The Biden administration hopes to overturn more Trump-era health care policies that shortened marketplace open enrollment from three months to just six weeks, allowed states to loosen requirements for the essential health benefits required by plans sold on the ACA marketplaces, and loosened rules for Section 1332 waivers, which allowed states to experiment with different coverage options. They also hope to roll back changes to the formula for indexing increases in ACA plan premiums, broaden LGBTQ+ civil rights protections in the ACA, and restore funding for marketplace operations.

While CPAs should keep abreast of all this activity, there are no real changes to health insurance, employee benefits, or tax implications, says Marcus Newman, RHU, CBC, vice president of benefits consulting for GCG Financial in Chicago. “President Biden hasn’t done much more than open the ACA back up so far,” he says.

Championing Health Care Equity

Changes are also underway at the state level in Illinois. On April 27, Gov. J.B. Pritzker signed HB 158 into law, a bill that focuses on health care equity for minority and low-income populations by, among other things, enhancing mental health services, requiring bias training for doctors, and creating a community health worker program that improves oversight and transparency.

“The bill is about equity and accessibility,” says Chris Manson, vice president of government relations for OSF HealthCare, headquartered in Peoria, Ill. “We’re supportive of any efforts to help address long-term health care disparities and inequities in marginalized communities. It’s more of a matter of how we go about accomplishing that.”

Newman says the issues surrounding health care and health insurance come down to three basic factors: accessibility, affordability, and delivery/education. That final component is especially tricky now.

“We used to put everyone in the same room and explain their health insurance options. In the COVID-19 era, we can’t do that anymore,” he explains. “Now how do we educate people and help them make the best possible decisions about their insurance and care? If I don’t know that my wellness visit is 100 percent covered by the preventative care element of the ACA, I don’t get a checkup. That education component is critical.”

Changing How Doctors See Patients

Illinois CPA Society member Michelle Carrothers, CPA, vice president of strategic reimbursement at OSF HealthCare, says the pandemic not only demonstrated how vital it is that health care be accessible to everyone—it also made it clear that innovative ways to access health care will remain a common feature moving forward.

OSF HealthCare was already seeking new ways for patients to contact providers prior to the pandemic, but COVID-19 put those efforts into high gear. The results? A dedicated COVID-19 hotline and innovation center. “We worked with the state and clinicians to get these programs up and running to screen people for COVID-19 and get them to the right health care provider,” Carrothers says.

At the same time, health care providers had to continue caring for individuals who had health issues completely unrelated to COVID-19. “We’ve tried to meet patients where they are,” Manson says. “Telehealth is one avenue that allowed us to continue to address the needs of the community so chronic health care issues don’t go untreated, while at the same time minimizing the spread.”

While the pandemic was and remains an enormous drain on health care providers, Carrothers hopes that it will recede into the distance while the new methods providers implemented to make health care more accessible will stay. “We’ll see the benefits down the road as we’re trying to serve our communities and help them become healthier,” she says.

The COBRA Conundrum

The American Rescue Plan signed into law in March 2021 contains a health care provision that has raised quite a few challenges. In an effort to support Americans who lost their jobs and help them maintain access to health care, the federal government will pay 100 percent of COBRA insurance premiums for eligible employees and their covered relatives through September 2021, allowing them to stay on their company-sponsored health plan.

The subsidy has proven difficult to navigate for some small businesses. Ultimately, these subsidies will be funded by refundable quarterly payroll tax credits, but employers must first come up with the funds to pay the state continuation premiums.

“Some employers have laid off 50 percent of their staff because they didn’t have any revenue,” Newman says. “There’s no payroll tax to cover the COBRA premiums of those individuals, so what are they supposed to do?” In addition, the onus is on small employers to notify employees of their eligibility. “Employers shouldn’t be in that situation,” he says. “It’s not within the financial reality of small businesses.”

And for former employees still on unemployment, the question is whether to take the COBRA subsidy or not.

Kelley Long, CPA/PFS, CFP, offers financial coaching for do-it-yourself financial planners and investors via her independent firm in Chicago, Financial Bliss With Kelley Long, and has a unique passion for helping clients use their health care options strategically. She notes that the COBRA provision presents CPAs with the opportunity to discuss an under-utilized provision that has the potential to help but can also be difficult to claim. “The COBRA subsidy could be a huge headache for folks who are still unemployed,” she says. “Even if people who lost their jobs prior to the pandemic could get at least one month subsidized by the federal government, they have to look back and decide if it’s worth the trouble to claim it. This is a great opportunity for CPAs to help.”

Using HSAs Strategically

Long, an Illinois CPA Society member who will be presenting on health care strategies at ICPAS SUMMIT21, says, post-pandemic, people are more in need of savvy financial advice surrounding health care than ever before—and that is an often overlooked advising opportunity for CPAs. “The biggest mistake people make is spending all their HSA money,” she says. “They reimburse themselves for smaller expenses like bandages, vitamins, PPE, and menstrual products, but you can—and should—let that money build up if you can afford to.”

Long says that savers should allow their HSAs to build up and invest the funds, treating it more like a supplemental 401(k) plan or an IRA where the growth can be invested for future use, such as Medicare premiums or long-term care in retirement. An HSA can even be used to save for the future children you might have with someone you haven’t even met yet. “For people who think about it early enough, you can build up a sizable amount,” Long says. “Health care is the biggest wild card of retirement and an HSA can help mitigate that.”

Being well-versed in the nuances of HSAs can help CPAs stand out with clients who need help making difficult decisions about benefit plans. “As the trusted advisor, you should know if an HSA plan would fit a client’s finances,” Long says. “The higher the income and more emergency funds someone has, the more an HSA-eligible plan makes sense. You’re helping them save taxes and also fund retirement—you’ll sound like a genius.”

Overall, understanding the rapidly changing health care space is an important insight CPAs can offer to their clients. “We have to understand where you can cut costs, eliminate waste, and get people the right solution for them,” Carrothers says. “There’s an opportunity in understanding government reimbursements and add-ons, Medicaid complexities, and forecasting for bond financing. Hopefully, we CPAs are also benefitting by serving our communities in a more effective manner. Getting patients into the right setting, whether that’s telehealth or outpatient, and being more proactive with preventative care and screenings so we save costs and don’t have health problems down the road is better for the patients—and better for all of us.”

Natalie Rooney is a freelance writer based in Eagle, Colo. A former vice president of communications for the Ohio Society of CPAs, she has been writing for state CPA societies for more than 20 years.