AGENDA What is an HSA? Elements of Consumerism HSA Examples – Do the Math Resources

1. AGENDA What is an HSA? Elements of Consumerism HSA Examples – Do the Math Resources Studies – HSAs are working! HSA Usage Trends Health Reform and CDHPs EDJohnson@FirstHorizon.com Connect with Eric on Linked In! www.linkedin.com/in/ericjohnson262 817-366-7536

2. Do the Math!

3. Copay vs. HSA $3k deductible 100% Copay Plan $3k deductible 100% HDHP

4. Plan Design – No Copays COPAY $3,000 Deductible 100% coverage after deductible Dr: $30 Rx: $10 / $40 / $60

5. Plan Design – No Copays COPAY HSA $3,000 Deductible 100% coverage after deductible Dr: $30 Rx: $10 / $40 / $60 $3,000 Deductible 100% coverage after deductible Dr: Negotiated rate / deduct. Rx: Negotiated rate / deduct.

6. Plan Design – No Copays COPAY HSA $3,000 Deductible 100% coverage after deductible Dr: $30 Rx: $10 / $40 / $60 Monthly: $347 Yearly: $4,164 $3,000 Deductible 100% coverage after deductible Dr: Negotiated rate / deduct. Rx: Negotiated rate / deduct. Monthly: $297 Yearly: $3,564

7. Premium Savings – Put in HSA COPAY HSA $3,000 Deductible 100% coverage after deductible Dr: $30 Rx: $10 / $40 / $60 Monthly: $347 Yearly: $4,164 $3,000 Deductible 100% coverage after deductible Dr: Negotiated rate / deduct. Rx: Negotiated rate / deduct. Monthly: $297 Yearly: $3,564 $600/year

8. What’s the Risk? COPAY $3,000 Deductible Doctor copays Prescription copays (all paid with after tax dollars)

9. What’s the Risk? COPAY HSA $3,000 Deductible Doctor copays Prescription copays (all paid with after tax dollars) $3,000 Deductible $600 deposited in HSA $2,400 Total Exposure (all paid with pre-tax dollars)

10. Example 1 Low Utilizer

11. Low Utilizer COPAY Annual physical: $0 No other doctor visits or prescriptions No refund from insurance company

12. Low Utilizer HSA COPAY Annual physical: $0 No other doctor visits or prescriptions No refund from insurance company Annual physical: $0 No other doctor visits or prescriptions $600 in HSA to use for dental, vision, or future medical expenses

13. Qualified Medical Expenses Until 1/1/11

14. Great R.O.I. for Employers Low Utilizers will appreciate their benefits Employees will be happier Employers will get their money’s worth

15. The Winner and New Champion HSA COPAY HSA

16. Example 2 Medium Utilizer

17. Medium Utilizer HSA COPAY Annual physical: $0 Annual physical: $0

18. Medium Utilizer COPAY Annual physical: $0 2 sick visits: $60

19. Medium Utilizer HSA COPAY Annual physical: $0 2 sick visits: $60 Annual physical: $0 2 sick visits: ???

20. Price Transparency Tools www.FirstHorizonMsaver.com

21. Price Transparency Tools Office Visit, Established Patient, Level 2 (zip code 76012) Minor problem requiring a limited exam and treatment – approximately 10 minutes with the doctor $70 Office Visit, Established Patient, Level 3 (zip code 76012) Moderate problem requiring counseling and treatment, may require coordination of care with other providers – approximately 15 minutes with the doctor $113

22. Medium Utilizer COPAY HSA Annual physical: $0 2 sick visits: $60 Annual physical: $0 2 sick visits: $226

23. Medium Utilizer COPAY Annual physical: $0 2 sick visits: $60 Synthroid ($10) $120 Lipitor ($60) $720

24. Medium Utilizer COPAY HSA Annual physical: $0 2 sick visits: $60 Synthroid ($10) $120 Lipitor ($60) $720 Annual physical: $0 2 sick visits: $226 Synthroid Lipitor ?

25. Price Transparency Tools www.FirstHorizonMsaver.com

26. Synthroid(100 MCG) Insurance Company $26.09 $20.35 $18.24 $20.35 $20.74 MyFloridaRx.com $22.83 $20.79

27. Lipitor(10 MG) Insurance Company Not Listed $95.27 $88.80 $95.27 $97.41 $99.95 $96.59

28. Medium Utilizer COPAY HSA Annual physical: $0 2 sick visits: $60 Synthroid ($10) $120 Lipitor ($60) $720 Annual physical: $0 2 sick visits: $226 Synthroid ($18) $216 Lipitor ($89) $1,068

29. Medium Utilizer COPAY HSA Annual physical: $0 2 sick visits: $60 Synthroid ($10) $120 Lipitor ($60) $720 Total $900 Annual physical: $0 2 sick visits: $226 Synthroid ($18) $216 Lipitor ($89) $1,068 Total $1,510

30. Medium Utilizer COPAY HSA Total: $900 Total: $1,510 minus HSA: $ 600

31. Medium Utilizer COPAY HSA Total: $900 Total (after tax): $900 Total: $1,510 minus HSA: $ 600 Total: $ 910

32. Federal Income Tax Brackets 2010

33. Medium Utilizer COPAY HSA Total: $900 Total: $1,510 minus HSA: $600 minus Tax Savings $378 (25%)

34. FICA Tax Rate 2010 6.2% of first $106,800 1.45% with no limit TOTAL 7.65% matched by employer

35. Texas Sales Tax Holiday

37. Medium Utilizer COPAY HSA Total: $900 Total (after tax): $900 Total: $1,510 minus HSA: $600 minus Tax Savings $378 (25%) Total: $532

38. Medium Utilizer COPAY HSA Total: $900 Total (after tax): $900 Total: $1,510 minus HSA: $600 minus Tax Savings $378 (25%) Total: $532 Savings vs. Copay: $368

39. Medium Utilizer COPAY HSA Total: $900 Total (after tax): $900 Remaining Risk: $3,000 + add’l copays Total: $1,510 minus HSA: $600 minus Tax Savings $378 (25%) Total: $532 Savings vs. Copay: $368 Remaining Risk: $1,490

40. The Winner and Still Champion HSA COPAY HSA

41. Example 3 High Utilizer

42. High Utilizer COPAY Annual physical: $0

43. High Utilizer COPAY Annual physical: $0 4 sick visits: $120

44. High Utilizer COPAY Annual physical: $0 4 sick visits: $120 1 Generic ($10) $120 1 Brand ($40) $480 1 Non-Form. ($60) $720

45. High Utilizer COPAY Annual physical: $0 4 sick visits: $120 1 Generic ($10) $120 1 Brand ($40) $480 1 Non-Form. ($60) $720 1 Hospital Visit: $3,000

46. High Utilizer COPAY Annual physical: $0 4 sick visits: $120 1 Generic ($10) $120 1 Brand ($40) $480 1 Non-Form. ($60) $720 1 Hospital Visit: $3,000 Total: $4,440

47. High Utilizer COPAY HSA Annual physical: $0 4 sick visits: $120 1 Generic ($10) $120 1 Brand ($40) $480 1 Non-Form. ($60) $720 1 Hospital Visit: $3,000 Total: $4,440 Deductible: $3,000

48. High Utilizer COPAY HSA Total: $4,440 Deductible: $3000 minus HSA: $600

49. High Utilizer COPAY HSA Total: $4,440 Deductible: $3000 minus HSA: $600 minus tax savings : $750

50. High Utilizer COPAY HSA Total: $4,440 Total (after tax): $4,440 Deductible: $3,000 minus HSA: $600 minus tax savings: $750 Total (after tax): $1,650