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Celebrating 75 Years 1932 -2007. Consumer Directed Health Plans. How can they Impact Retiree Health Benefits. Consumer Directed Plans. Usually use a High Deductible Health Plan Have a component of participant responsibility.

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Consumer directed health plans

Consumer Directed Health Plans

How can they Impact Retiree Health Benefits


Consumer directed plans
Consumer Directed Plans

  • Usually use a High Deductible Health Plan

  • Have a component of participant responsibility.

  • Empower participants to make independent decisions while providing an economic incentive.

  • Successful plans will provide tools to help participants in their decision process.


What are consumer directed health plans
What are Consumer Directed Health Plans?

  • HRA’s - Health Reimbursement Arrangements

  • HSA’s - Health Savings Accounts

  • MSA’s (MMSA’s)- (Medicare) Medical Savings Accounts


Hra health reimbursement account
HRA - Health Reimbursement Account

Employer Benefits

  • Do not require a qualified plan

  • More flexibility in plan design

  • Employer owns benefit

  • Only portable to the extent employer allows

  • Limited long term liability

  • Stabilization of rising costs


Hra health reimbursement account1
HRA - Health Reimbursement Account

Employee Benefits

  • Direct access to providers of choice - no referrals

  • No out of pocket expenditure for expenses under HRA balance

  • Control over healthcare decisions

  • Increasing benefits - rewarded for good health

  • Stabilization of rising costs


Hsa plans
HSA Plans

  • Qualifeid High Deductible Plan (Required)

  • Tax Free Savings Plan to Pay for Healthcare Expenses

  • Available to any size Group

  • Employee Owns Account


Hsa qualified medical plan
HSA - Qualified Medical Plan

  • High Deductible

  • No first Dollar Benefits except for Preventative Care

  • Filed as a HSA Compatible Plan


Hsa health savings account
HSA - Health Savings Account

  • Must use a Qualified Financial Vendor

  • Can Fund up to $2850 (single) or $5650 (family) for 2007

  • Catch-up Provision – Over age 55, $800 for 2007, $900 for 2008

  • Employee and/or Employer can make contributions

  • Employee owns the Account

  • Funds are fully portable


Hsa use of funds
HSA -Use of Funds

  • Medical expenses under IRS Code 213(d) *

    • Medical

    • Dental

    • Vision

  • COBRA Premiums *

  • Medicare Premiums *

  • Long Term Care Premiums *

  • Retirement Savings - Subject to State and Federal Taxes

    * Subject to State Taxes


Hsa health savings account1
HSA - Health Savings Account

Employer Benefits

  • Predictable Costs

  • Employer and Employee Can Fund

  • Usually better pricing than HRA Plans

  • No long term liability

  • Stabilization of rising costs


Hsa health savings account2
HSA - Health Savings Account

Employee Benefits

  • Direct access to providers of choice - no referrals

  • No out of pocket expenditure for expenses under HSA balance

  • Control over healthcare decisions

  • Increasing benefits - rewarded for good health

  • Stabilization of rising costs

  • Employee owns the account


Example of retiree pricing
Example of Retiree Pricing

Fresno County – Unblended Retiree Benefits

  • Blue Shield $250 Ded PPO Plan including Rx, Dental, & Vision = $823.47 per month Retiree Only

  • Blue Shield $1500 Ded HSA Plan $4500 OoP Max including Rx, Dental, & Vision = $468.12 per month Retiree Only

  • Savings = $355.35 Mth, $4264 Ann

  • Pays almost entire liability, Plus Tax benefits for HSA account.


Why hsa s for county retiree s
Why HSA’s for County Retiree’s

  • More Affordable for Retirees

  • Reduces GASB liability where rates are still blended

  • Easy way to introduce to Employee Population

  • If offered to Employees provides a way to save for Retirement Health Benefits


Msa medical savings account
MSA Medical Savings Account

  • Original Term for HSA’s

  • Now an option for Medicare MA Plans

    (MA = Medicare Advantage)

  • Still evolving, look to the future

  • High Deductible Plan combined with a Benefit/Savings account

  • Only Medicare can fund the account


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