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Optional Health Care PlanFall 2013
A Qualified High Deductible Health Care Plan (QHDHCP)
with a Health Savings Account (H S A)
High Deductible Health Plans[HDHCP]
• Basically two types– Regular plan that simply has a higher deductible –
usually means a deductible of $1000 or more –Sometimes fully insured plan will use an HRA to help offset a higher deductible
– A Qualified (signified by a Q) plan has an upfront (before any benefits are paid) deductible and is most often offered in conjunction with an HSA
What is a QHDHCP?• Must follow the guidelines as laid out by the
IRS...to obtain the tax advantages prescribed• Annual Deductible Minimum set by the IRS
– $1,250 Individual and $2,500 family (IRS)
• Solanco Proposal: A $2,000 Individual and $4,000 Family plan design
Qualified High Deductible Health Plan (QHDHP)
• QHDHPs generally have:– First dollar coverage (no deductible) for
preventive care– Higher out-of-pocket (copays &
coinsurance) for non-network services• All covered benefits must apply to the plan
deductible, including prescription drugs
Qualified High-Deductible Health Plan (QHDHP)
• Preventive Care– PPACA guidance provides list of preventive care that QHDHP
may provide as first-dollar coverage before minimum deductible is satisfied:
• Periodic health evaluations (e.g., annual physicals)• Screening services (e.g., mammograms)• Routine pre-natal and well-child care• Child and adult immunizations• Tobacco cessation programs• Obesity weight loss programs
HSA Overview• A Health Savings Account (HSA) is a special account
owned by an individual used to pay for current and future medical expenses
• HSAs are used in conjunction with a Qualified High-Deductible Health Plan (QHDHP)
• Insurance that does not cover first dollar medical expenses (except for preventive care)
• Can be an HMO, PPO or indemnity plan, as long as it meets the requirements
• A QHDHP can be offered by a group as an option along with other type plans OR can be a stand alone offering
What is an H S A?
• An employee owned account• Contributions can come from Employee (EE) or Employer
– Employer Contribution– EE Pre-tax via payroll– EE After tax contribution (out side of payroll)– EE Gifts– EE IRA transfer - 1 one per lifetime tax free– IRS annual maximum ( For 2014)
• $3,300 individual ( 2013 $3,250)• $6,550 Family (2013 $6,450)• $1,000 per year catch-up provisions – age 55 end of tax year.
What is an H S A? (2)• As an employee owned account, funds are
rolled over every year, not taxed on interest earned or when funds are used (i.e. used with in IRS guidelines). Taxed as income with a 20% penalty if funds are used for non-medical expenses
• Contributions can be made generally up to April 15th ( tax return time) for the prior year….IRS rules governing contributions
HSA Contribution Rules
• Contributions to HSA can be made by the employer or the individual, or both.– If made by the employer, it is not taxable to the employee
(excluded from income and wages)– If made by the individual, it is an “above-the-line”
deduction– The maximum amount that can be contributed to an HSA
from all sources• $3,300 (self-only coverage) 2014• $6,550 (family coverage) for 2014 [includes working
spouses if both H S A eligible]
HSA Contribution Rules: Employee Contributions
• Can be made by a salary reduction arrangement through a cafeteria plan (section 125 plan amendment)– Elections to make contributions through a
cafeteria plan can change on a month-by-month basis (unlike salary reduction contributions to an FSA)
– Remember that contributions to the HSA through a cafeteria plan are “pretax” and not subject to individual or employment taxes
Member Portalwww.myhealthequity.com
Prepopulated With Your Claims
View and Pay Claims Online
HSA How ToDoctors Visits
*This card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. The Bancorp Bank; Member FDIC.
No co-pays
HealthAmerica adjusts price based on discounts
Pay doctor from HSA funds, if funds are available. Pay out of pocket if funds aren’t available and reimburse yourself later.
Go to the doctor
Doctor sends insurance carrier the bill
Claim integratedinto member portal3
2
1
Member HSA ExperienceIntegrated Medical Claims
Member goes to Doctor, shows HealthAmerica
card
Doctor sends visit details and coding to HealthAmerica
for claims adjudication
HealthAmerica sends claims to HealthEquity for record keeping and member
portal population
When the member has
claim activity, an EOB from
HealthAmerica is sent for each claim. Claim
information and monthly
statements on HSA funds and
account information is available on HealthEquity
portal.
If deductible has not been met, provider
will bill member for their plan
negotiated portion.
If deductible has been met, plan will pay provider for service. If
member owes coinsurance,
provider will bill member for their portion.daily
daily
Member pays outstanding provider bill using funds
on HSA card or personal
funds through member
portal
daily
HSA How ToPharmacy Prescriptions
Show your HealthAmerica card
Pay with yourHSA card
Insurance carrier applies amount to your deductible—no paperwork needed
*This card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. The Bancorp Bank; Member FDIC.
Go to pharmacy
Pharmacy applies discount
Pharmacy sends claim to insurance carrier
3
2
1
HSA Member ExperiencePharmacy Claims
Member goes to Pharmacy and shows HealthAmerica card
Pharmacy and HSA card send
payment information to Health America
and HealthEquity
for record keeping and
account tracking.
When the member has claim activity, they will receive an EOB from
HealthAmerica for each claim. Claim
information and monthly statements on HRA funds and account information is available
on each member’s HealthEquity portal.
Pharmacy verifies eligibility.
If out of pocket max is not met, member can pay using HSA
card or out of pocket.
immediate
daily
daily
Member Services
HealthEquity Member Services is available everyday, 24/7/265 at
866.855.4066Building Health SavingsSM through
Live Service 24/7/365Personalized Savings Strategies
Account Integration
HSA Accounts• No “use it or lose it” rules like Flexible Spending Arrangements
(FSAs)– All amounts in the HSA are fully vested– Unspent balances in accounts remain in the account until spent and
carry over year-to-year– Encourages account holders to spend their funds more effectively on
their medical care– Encourages account holders to shop for the best value for their health
care dollars
• Accounts can grow through investment earnings, just like an IRA– Same investment options and investment limitations as IRAs
H S A: Board and Employee Contribution Mix and Shares
Coverage Tier
District H S A Contribution
Minimum Employee premium
share
Total Minimum
H S A
Entry Year
Single 1,600$ 500$ 2,100$ Family 3,200$ 1,000$ 4,200$
Single 1,500$ 500$ 2,000$ Family 3,000$ 1,000$ 4,000$
Single 1,250$ 500$ 1,750$ Family 2,500$ 1,000$ 3,500$
Proposed District and Employee Contribution to Optional H S A QHDHCP
Year One
Year Two
Year Three
Dist + EE OptionalIRS Annual
Max: All sources
IRS:+55 catch-up
IRS Max w/+55 Catch-
up
Single yr 1 2,100$ 1,200$ 3,300$ 1,000$ 4,300$ 50.00$ 41.67$
Family yr 1 4,200$ 2,350$ 6,550$ 1,000$ 7,550$ 97.92$ 41.67$
Maximum for 2014
Per Pay examples:
Per Pay examples:
Eligibility & Funding• For January 1, 2014:
– Full-time active staff currently enrolled in the District Health Care ( e.g. LTS’s not eligible)
– Retirees eligible • Presently have a $1,200 deductible plan option & now the Q
plan
• Eligible employees hired (start date) after April 1 of each year not eligible for QHDHCP until following January (via Fall enrollment)
• Year one : 100% board share in January• Successive years 65% in January and 35% in
September
Show me the money.....• Year one: 100% of Board Contribution made in
January – 2014 “Class” January 2014 = $1,600 or $3,200
• Successive years: 65% in January --& 35% in September– 2013 Single Class : Jan 2014 = $975 & Sept 2014 = $525– 2013 Family Class: Jan 2014 = $1,950 & Sept 2014 = $1,050
• Employee Payroll Contributions – After Each Payroll [No less than Monthly]
• E-mail notifications----In and out.
Timelines / Schedule• October Presentations• PPO 60 day PPACA notice and Summary of
Benefit & Coverage (SBC’s)issuance• November 5; Central Office; meeting and
employee education program• November 15 Enrollment deadline
– Set up Accounts; Payroll deduction set-up: both mandatory and optional; Funding alignment; WEB site set-up and on-line tools
• New ID Cards---January 1st start
For January 1, 2014
• Choose the ‘Q ‘plan with H S A (Options on H S A $ amounts, No FSA)
• Stay with H S A Plan.....Leave H S A Plan• Stay with the current PPO plan (FSA option, no H S A)• Spousal Rule certifications – Everyone; H S A context
– Surcharge is $1,523.18 for 2014 – [E + 1 Rate of $13,847.16 x 11%]
• Dual Coverage issues impact H S A selections ( i.e. you are “covered” by your spouses plan too)
PPO HDHCP200/600 2000/4000
Premium share: Annual Annual
Single 513.84 513.84
E+1 969.36 969.36
Family 1598.88 1598.88
Employer contributions:Health Equity
BankYear One Example:
Single 0 1600Family 0 3200
Returned premium Share: Total Bank Cash:Single 0 500 2,100 Family 0 1000 4,200
Deductibles Deductible less H S A Cash
Deductible; single -200 -2000Difference in Paid Premium share -500 0
-700 -2000 100
Deductible: Family -600 -4000
Difference in Paid Familiy Premium share -1000 0
-1600 -4000 200
Co-pays??
Withheld and paid from section 125
payroll deductions as
per CBA.
Premium shares:
2013-14 (Eff. Jan. 1, 2014)
Participating
ProviderParticipating
Provider
Deductible
Individual $100 $200
Family $300 $600
Co-Pays
Offi ce Visit (PCP) $25.00 $30.00
Offi ce Visit (Specialist) $35.00 $40.00
Urgent Care Center $25.00 $30.00
Chiropractic $15.00 $20.00Mental Health - Outpatient $25.00 $30.00
Current PPO Plan
2013-14 (Eff. Jan. 1, 2014)
Participating
ProviderParticipating
Provider
Deductible
Individual $2,000 $2,000
Family $4,000 $4,000
Co-Pays (after deductible)Office Visit (Primary or other practitioner) $15.00 $15.00
Office Visit (Specialist) $25.00 $25.00
Urgent Care Center $25.00 $25.00
Chiropractic $15.00 $15.00Mental Health - Outpatient $25.00 $25.00
QHDHP
Per Pay Amount12 month (24 pays)
10 month (19 pays)
COBRA Monthly Rate
Annual Premium
Share Employee $21.41 $27.05 $713.77 $513.84
Employee + 1 $40.39 $51.02 $1,153.93 $969.36
Employee + Family $66.62 $84.15 $1,665.47 $1,598.88Annual
Spousal Surcharge - eff. Jan. 1, 2014 $8,565.2411% of employee + 1 COBRA rate $13,847.16$13,847.16 x 11% = $1,523.18 / 26 pays = $58.58 per pay $19,985.64
Health Care Premium 2013-14 Information