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2014
City of Vancouver – 2014 plans
The City continues to offer two additional options for employees to choose from
Both Regence and Kaiser offer a Consumer Directed Health Plan (CDHP) along side their traditional PPO and HMO plans
The CDHP offerings allow employees to set up a Health Savings Account (HSA) to save money for future health care expenses
2CDHP 2014
City of Vancouver – CDHP/HSA Eligibility
You or your dependents may not be enrolled in another health care plan that pays for services before the deductible is met if you are enrolling in the City’s CDHP
Since an HSA and an FSA are both tax-sheltered accounts, you may not participate in both accounts
You may continue to participate in a dependent care spending account if you enroll in the CDHP/HSA
3CDHP 2014
What is Consumerism and Consumer-Directed Health Plans (CDHP)?
Consumerism - any activity that encourages or empowers informed or responsible spending for or use of healthcare related goods or services
CDHP - a plan, typically a PPO with a high deductible and an “account” (e.g. Health Savings Account (HSA))
4CDHP 2014
What is Consumerism and Consumer-Directed Health Plans (CDHP) (cont.)?Consumerism is a wide-ranging topic, not
limited to just Consumer Directed Health Plans (CDHPs) and shares these goals:
Create better consumers of health careReduce the number of services utilized,
particularly unnecessary services, or those for which less expensive, and equally as effective, alternatives exist
Deliver health care in a more cost-effective and efficient manner
Act as a long-term strategy to reduce costs or future “trend” increases
5CDHP 2014
What is health care consumerism?Exhibiting healthy behaviors
Taking personal responsibility for the cost and quality of the services that an individual purchases
Using strategies for encouraging consumerism, which include communicating effectively with your health care professionals, understanding your coverage, and getting informed about options
Putting your health at the forefront, because consumerism isn’t just managing your health plan, it’s about managing your life
6CDHP 2014
What is a consumer-directed health plan?
It is a plan under which employees spend money from Health Savings Accounts (HSAs) to pay for health care services. Once the high deductible is met, services are covered by traditional insurance.
7CDHP 2014
Consumer Directed Health Plan (CDHP) with Health Savings Account (HSA)
Health Savings Account (HSA)
Employer funds $500 per employee-only and $1,000 per employee/dependents
Employee may also fund account
Traditional Insurance Coverage
80% PPO60% Non PPO
$5,000 out-of-pocket maximum per person ($10,000 per family); includes the deductible
Then plan pays 100%
Pre
ven
tive
Ca
re
100
%
CDHP Deductible$1,500 deductible per person ($3,000 per family) (may be offset by HSA)
8CDHP 2014
Health Savings Account (HSA) DetailsCity Annual Contribution $500 per enrolled employee only$1,000 per enrollment employee and dependentsCity’s contribution will be deposited at the
beginning of the plan year
Annual Tax-Free Contribution LimitsEmployee-only coverage: $3,300One or more dependent coverage: $6,550 $1,000 annual HSA catch-up contribution at age
55 and olderMaximums are combined totals that include
employer and employee contributions9
continued …CDHP 2014
Health Savings Account (HSA) Details
Establishing/Using an AccountThe HSA will be an employee-owned accountAccount is through Bank of AmericaHSA account holders will have a debit card and/or
checkbook to pay for qualified medical expensesNo reporting on the account is provided to the CityAfter the account balance reaches $1,000,
employees can choose whether or how to invest the balance
The City pays the administrative fee for active employees
1010CDHP 2014
Health Savings Account OverviewFlexible Portable and, like an IRA, travels with you, not
your jobRolls over each year, unlike a Flexible Spending
AccountNot a “use it or lose it” account – save for next
year, or better yet, for retirementCity will make a contribution to the HSA in 2014You also may contribute to the HSA on a pre-tax
basis You’re in control and choose when to use your HSA
or pay out-of-pocket11
continued …11CDHP 2014
Health Savings Account Overview
Flexible
InheritableYou can make an after-tax contribution to the
HSA and deduct it on your federal tax returnThe CDHP premium is lower than the regular
plans, those that are currently making a higher pre-tax premium contribution can elect to contribute the difference to the HSA and be neutral on payroll deductions.
1212CDHP 2014
continued …CDHP 2014
Health Savings Account Overview
Tax Advantages
Contributions are tax-free
Withdrawals are tax-free when used to pay for qualified medical expenses
Earnings grow tax-free
Even if your HSA-compatible coverage ends, you can use HSA funds tax-free for eligible medical expenses
13
continued …CDHP 2014CDHP 2014
Health Savings Account Overview
Allows Long-term Investment Opportunities
HSA funds may be invested for greater earning potential
Choose from a variety of mutual funds
14CDHP 2014CDHP 2014
ResourcesFurther information can be found on the City’s
website.
Our medical carriers’ websites also house important information to help you be a better health care consumer
www.myregence.com
www.kp.org
Each carrier’s website will help you understand the costs for various procedures, compare providers for cost and quality, review costs for prescription drugs
1515CDHP 2014
continued …CDHP 2014
Resources
Cascade Centers offers health education services to City employees along with Wellness.
www.cascadecenters.com
16CDHP 2014 16
Questions and Discussion
17CDHP 2014