Health Savings Accounts (HSAs)

Health Savings Accounts (HSAs)

Consumer Directed Plans

Develop Appreciation for Cost of Services

The Advantage is:

– You are reducing your premium, and taking control of the rest

Flexibility

The Future of Healthcare is NOW!

Support Services Alliance, Inc.

Main Objective of HSAs

Reduce Fixed Premium

Increase Possible Expense


You only pay for services when you actually use the service!

Definition

Deductible is the amount of money paid out of pocket before the insurance is used.


Health Insurance XL2250H

Employee pays 100% of all medical expenses before the deductible

Policy pays 100% of all medical expenses after the deductible

Individual

$0

2-PersonFamily

$0

$2,250

$4,500

Unlimited

EE pays 100% Insurance pays 100%

Family Deductible

HSA deductibles are aggregate

Aggregate deductible is twice the individual deductible, and must be met before charges are paid by the insurance carrier

Individual Deductible Family Aggregate

$2,250 $4,500


Health Insurance

Deductible covers– Physician’s visits & Services– Inpatient Hospital Services– Outpatient Hospital Services– Prescription Drugs– (*Detailed list on XL2250H brochure)

No Deductible required – Well child visits and routine immunizations for children up to age 19


Health Insurance Specifics

NO REFERRALS EVER

Underwritten by Univera Healthcare

Dependents covered until December 31st of the year they turn 23


Health Insurance

Freedom of Choice – In & Out of Network

Providers– WNY – Univera– CNY – Excellus BlueCross BlueShield – Outside NYS – Beech Street Network

Best way to find doctor/hospital– Smallbizgrowth.com– Then click “Find a Provider”


2 Separate Parts

High-deductible health insurance plans

Savings Account

Health Insurance Savings Account

HSA-eligible high-deductible health plans with benefits such as:

-Freedom of choice of physicians and hospitals-Physician’s services-Inpatient hospital services-Outpatient hospital services-Prescriptions

Can be used for all of the deductible expenses and coinsurance (if necessary) under medical, as well as:

-Dental-Vision-Over-the-counter medication-Long-term care premiums-Long-term care expenses-Annual physical


Tax Treatment of Contributions

Employer contributions

– Contributions made by the Employer are NON-taxable to the employee

Employee contributions

– May be an above the line deduction on form 1040 of federal income tax return or

– Pre-tax deduction out of paycheck


AccumulationsAccumulations

Interest earned in Savings account is tax-deferred

– No maximum limit on account balance

NOT a “use it or lose it” account

Can always be used for out-of-pocket medical costs.

Account is 100% owned by the employee.

– If the employee leaves their job, the account and the money in the account remains with the employee.


Withdrawals

Withdrawals made for qualified medical expenses are tax free

Non-qualified expenses subject to 10% penalty plus taxes (penalty is waived for death or disability)

Non-qualified withdrawals for individuals age 65 and above are subject to income tax only

Accurate record keeping is employee’s responsibility

– If audited, employee is responsible to prove withdrawals were qualified


Claims

In-Network: You Pay a Reduced Rate

– Doctors, hospitals, testing, etc.

– Pharmacy

Claim Procedure

– MD or Hospital – “Run the Claim”

– Pharmacy – Use Debit Card or Check


Office Visit

You go to the doctor and show your card but DON'T PAY ANY CO-PAY

Doctor sends claim to Univera

Univera tells the doctor the negotiated rate to charge the client

Doctor sends client the bill, Univera sends EOB to client

Client pays the doctor.

If there is money in the HSA you can use that money to pay the doctor.


Prescription Drug

You go to the Pharmacy and show your Insurance card

If you haven’t reached your deductible you pay the full negotiated rate to the pharmacy

If there is money in the HSA you can use that money to pay the Pharmacy.


How Will a HSA Save Me $$$

Low Utilizing Person

Normal Utilizing Person

High Utilizing Person


Low Utilizer


Current Plan HDF

Premium $230/month $144/month

Annualized $2,760 $1,728

1 Dr. Visit $10 $100

Actual Cost $2,770 $1,828

SAVINGS $942

Example of Healthy Person

Normal Utilizer


Current Plan HDF



2 Dr. Visit $20 $200

1 Script $120 $360


SAVINGS $612

Example of Normal Person

High Utilizer


Current Plan HDF



12 Dr. Visit $120 $1,200

8 Scripts $2,400 $1,050


SAVINGS $1,302

Example of Very Ill Person

10 co-pay

Avg. co-pay $25 Maxed out

You May Use Funds For:

OTC Drugs

Dental

Vision

Portion of Long-Term Care Premiums

These Expenses WILL NOT Reduce Your Deductible

You Are Not Required to Use HSA Funds


Documents

Health Savings Accounts (HSAs)