2010-11 EHA High Deductible Health Plan Health Savings Accounts Webinar INTRODUCTIONS Kurt Genrich – EHA Plan Advocate Kent Trelford-Thompson – BCBSNE Account Executive AGENDA Define High Deductible Health Plans Dual Choice Plan Options $2,850 High Deductible Health Plan
Kurt Genrich – EHA Plan Advocate
Kent Trelford-Thompson – BCBSNE
Define High Deductible Health Plans
Dual Choice Plan Options
$2,850 High Deductible Health Plan
Funding Arrangements (examples)
Health Savings Accounts
What they are:
PPO and Rx plan that meets specific Federal requirements
Consumer Driven Health Insurance
1. Lower Premiums
2. Coverage for serious illness or injury
3. Earnings and Investments
4. 100% coverage
5. Put up to 100% of your deductible in an HSA ($2,850 Single/$5,700 Family)
Large Upfront Deductible- Aggregate for Family coverage (Pay total family deductible before benefits are paid)
No Co-pays for Office Visits, Rx coverage
Regular PPO deductibles do not transfer to HDHP- might consider January 1 for implementation
Have Limited Section 125/Flex plan with HDHP
As of September 1, 2010 EHA will offer four employee dual option plans.
*If offered, subgroup would not qualify for 5% Discount
*Must have at least 10 eligible ees to offer Dual Choice
*Must offer Dual Choice Option for at least 3 years
Only offered as an option (not stand-alone)
$2,850 Single Deductible
$5,700 Family Deductible (Must meet this deductible before any claims are paid for any member of your family)
100% Coverage after deductible
Lifetime Maximum- $5,000,000
Office Visits, Inpatient Hospital, Outpatient Hospital, Emergency Services are subject to Deductible and coinsurance
Routine Care: $500/year, not subject to Ded and coins.
Prescription Drugs- Generic, Formulary Brand, Non-formulary Brand, Specialty Drugs, and Diabetic/Ostomy supplies will be covered subject to Deductible and coinsurance. Mail Order drugs are available for 180 day supply subject to deductible and coinsurance
Mental Health and Substance Abuse coverage is subject to deductible and coinsurance
Apple School- 100 employees
Total Monthly Premium if all were on $350 option- $83,323.08
75 employees stay on $350 option
Monthly Costs- $62,539.48
$350 option: $2,350 Single/$4,700 Family Out of Pocket Max
Out of Pocket Max, Rx: $2,500 single/$5,000 Family
25 employees choose the $2,850 option
Monthly Costs- $17,063.53
$2,850 HDHP: $2,850 Single/$5,700 Family (includes Rx)
Total Monthly Premium- $79,603.01
Difference in Cost: $3,720/Monthly or $44,640/Annually
*Based on current EHA enrollment by tiers
If you use the $350 option as your base, members who choose the HDHP may receive the difference in premium back to them.
This amount, could then be put in a Health Savings Account, or any other negotiated tool.
What they are:
An HSA is a tax-exempt member owned-account established to pay for qualified medical expenses of a person covered under a HDHP. Funds that are not used in a given year can be carried over from year to year and earn tax-free interest over the life of the plan
Eligibility- covered under a HDHP w/out any other non-HDHP coverage (no dual coverage, even spouse’s 125 plan)
Annual HSA contribution limits:
$3,050 Single, $6,150 Family
*Individuals between 55 & 64 can contribute an additional $1,000 above the maximum.
If you are over 65 and/or are on medicare, you no longer can contribute to the HSA.
Qualified Medical expenses: Tax-free if used for qualified medical expenses as defined by IRS Code Section 213(d). The list includes Health plan Ded & Coins., medical expenses not covered by health plan, Rx and OTC drugs, qualified long term care coverage, COBRA premium and Medicare parts A & B premium
Who decides if the expense is a qualified medical expense? The Member decides whether the money being spent is for a “qualified medical expense”. If audited, member must have receipts/records to defend expenditures during an audit. (Member will have a Reimbursement Card, VISA)
How much of my HSA can I use? You can use all the money currently in the account at one time if needed. You cannot use money that has not been contributed yet. (Section 125 plan)
Do HSA funds roll over from year to year? Yes, the money not used will continue to be available to you in future years. It will also earn interest, depending on how invested.
What if the HSA account owner dies, what becomes of his account? The account will be transferred to a named beneficiary decided by the member. If used for something other than medical expenses, it will be taxed.
Who provides these types of accounts? The majority of banks and many other financial institutions offer HSAs to their members. Schools should look into offering only 1 savings option to members (payroll deduction, etc).
Debit Card is usually issued to members for payment of services
The difference in premium will be a negotiated option for the upcoming plan year. Negotiating groups will be able to make decisions on what to do with the money.