Transcript High Deductible Health Plan

IS A HIGH-DEDUCTIBLE MEDICAL
PLAN YOUR BEST CHOICE?
TAKING THE MYSTERY OUT OF HIGH-DEDUCTIBLE HEALTH
PLANS AND HEALTH SAVINGS ACCOUNTS
Purdue Benefits
www.purdue.edu/benefits
Agenda
o High-Deductible Health Plan With HSA
 High-Deductible Health Plan Basics
 Health Savings Account (HSA) Basics
 IRS Says
 How It Works
 Scenarios
 Plan Tips (How To Make It Work For You)
High Deductible Health Plan Basics
High-Deductible Health Plan Plus HSA
HIGH DEDUCTIBLE
HEALTH PLAN BASICS
Purdue Benefits
www.purdue.edu/benefits
Plan Basics
Health
Plan
(HDHP)
Health
Savings
Account
(HSA)
Purdue
Health
Plans Plus
HSA
Background
o Created as a way to help with rising
health care costs
 Offer tax advantages for medical
expenses
 Provide HSA owners with control of
where dollars are being spent
o HSA owners are generally more
interested in how funds are being
spent when they own the account
 Health care providers have
incentive to lower rates due to a
more competitive environment
Background
o Intent of high-deductible health plans and HSA
 Improved version of FSA with retirement savings feature





Allows unspent funds to roll over every year
Employers are not required, but are able to contribute
Account earns interest and offers investment options
Account goes with you if you leave Purdue
Able to save funds for retirement medical expenses, including
premiums
 Remember that funds used for non-medical expenses are fully taxable
 Prevalence of plans
 According to Mercer’s National Survey of Employer-Sponsored
Health Plans 2012:
o 36% of 2,809 employers surveyed offer an HDHP
o Up from 20% in 2008
Plan Basics
High-Deductible
Health Plan (HDHP)
Health Savings
Account (HSA)
Out-of-Pocket
Maximum
Withdrawals
Coinsurance
Deductible
Account
Management
Preventive Care
Contributions
Premium
Plan Basics
o High-Deductible Health Plan
High Deductible
Health Plan
(HDHP)
Out-ofPocket
Maximum
 Lowest premiums compared to more
traditional health plans
 Higher deductible and maximum limit on outof-pocket covered expenses in a calendar year
Coinsurance
 Includes both medical and prescription costs
Deductible
 100% coverage with in-network providers for
preventive care and preventive generic
medications for certain conditions
Preventive
Care
 (i.e. asthma, diabetes, heart disease and stroke,
prenatal vitamins, smoking cessation)
Plan Basics
High Deductible
Health Plan
(HDHP)
Out-ofPocket
Maximum
Coinsurance
Deductible
o Preventive care 100% covered with in-network
providers, includes but not limited to:
 Annual exams, routine prenatal and well-child
care, and child and adult immunizations
 Preventive (non-diagnostic) screening services
 e.g., cancer, diseases (heart and vascular, infectious)
 Conditions: metabolic, nutritional, endocrine, mental
health, obstetric and gynecological, and pediatric
 Disorders (musculoskeletal, vision and hearing)
 Eligible preventive medications
Preventive
Care
 For certain conditions such as: asthma, heart disease
and stroke
 Prenatal vitamins, generic contraceptives approved by
the FDA, smoking cessation
Plan Basics
High Deductible
Health Plan
(HDHP)
Out-ofPocket
Maximum
Coinsurance
o Deductible Phase:
 You pay 100% of all eligible expenses up to
the plan's annual deductible. Includes:
 Non-preventive medical visits and services
o Doctor visits, labs, diagnostics, hospitalizations
 Non-preventive prescriptions
2014 Deductible
In-Network
Out-of-Network
Purdue Health Plan
Plus HSA 1
$1,750 employee only
$3,500 family
$3,500 employee only
$7,000 family
Purdue Health Plan
Plus HSA 2
$ 2,500 employee only $5,000 employee only
$ 5,000 family
$10,000 family
Deductible
Preventive
Care
Plan Basics
High Deductible
Health Plan
(HDHP)
Out-ofPocket
Maximum
o Coinsurance Phase:
 After meeting your deductible, you pay a
smaller percentage of expenses
2014 Medical Coinsurance
Purdue Health Plan Plus HSA 1
Purdue Health Plan Plus HSA 2
In-Network
20%
25%
Out-of-Network
40%
45%
Coinsurance
2014 Prescription Coinsurance
Deductible
Preventive
Care
Purdue
Health Plan
Plus HSA 1
& HSA 2
Prescription
Type
Preventive
Generic
Generic
Preferred
Non-Preferred
Home Delivery
(90 day supply)
0%
Retail
(30 day supply)
0%
Ded. then $25 max
Ded. then 25%
Ded. then 45%
Ded. then $10 max
Ded. then 35%
Ded. then 55%
*Member Pays the Difference program is still in effect.
Plan Basics
o Out-of-Pocket Maximum Phase:
High Deductible
Health Plan
(HDHP)
Out-ofPocket
Maximum
Coinsurance
 Plan pays 100% of eligible medical and
prescription drug costs once you meet the
annual maximum
 This is the most you will pay for medical and
prescription drugs during 2014
Annual Out-of-Pocket Maximum
In-Network
Out-of-Network
Purdue Health Plan
Plus HSA 1
$3,500 employee only
$7,000 family
$7,000 employee only
$14,000 family
Purdue Health Plan
Plus HSA 2
$ 5,000 employee only $10,000 employee only
$ 10,000 family
$20,000 family
Deductible
Preventive
Care
High-Deductible Health Plan
HEALTH SAVINGS ACCOUNT
(HSA) BASICS
Purdue Benefits
www.purdue.edu/benefits
Plan Basics
o What Is An HSA?
 A bank account – called a health savings
account (HSA)
 Offers tax advantages and allows savings to
build over time
 Available with high deductible health plans
only
Health Savings
Account (HSA)
Withdrawals
Account
Management
 Administered by PayFlex
 Debit card allows convenient access to funds
in the account
 Account access via web and mobile
 File claims, view account balance,
transfer funds, etc.
Contributions
Plan Basics
o HSA Contributions
 Purdue contributes, and you have the
option to contribute to the same account
Health Savings
Account (HSA)
Withdrawals
2014 HSA
IRS
Contribution
Limit
Purdue
Contributions
Remaining
Employee
Contribution
Allowed
Account
Management
Contributions
Employee
$3,300
$650
$2,650
Family
$6,550
$1,300
$5,250
Plan Basics
o HSA Contributions
 Contributions are deposited pre-tax and
available for use on or after each pay date
 Age 55 or older any time during 2014,
eligible to contribute an additional $1,000
 Update contributions any time during
year through EBenefits
Health Savings
Account (HSA)
Withdrawals
Account
Management
Contributions
 Option to contribute after-tax
Plan Basics
o HSA Funds
 Remaining funds in account roll over
every year, never lose contributions
 Even if you separate or retire
 Funds earn interest and grow tax-free
with investment options available once
minimum balance is met
Health Savings
Account (HSA)
Withdrawals
Account
Management
 Potential for long-term, tax-free savings
 No limit on account balance
 Funds available to beneficiary in the
event of death
Contributions
Plan Basics
o HSA Withdrawals
 Funds never taxed when used for eligible
expenses such as:
Health Savings
Account (HSA)
 Medical (e.g. doctor visit, hospital stay)
 Prescription and Over-the-counter drugs
(with doctor's prescription)
 Vision (e.g. contacts, glasses)
 Dental (e.g. fillings, braces)
 Upon retirement , use funds tax-free for medical
premiums and eligible medical expenses
 Including COBRA, Medicare premiums and supplement
plans, and long-term care premiums
 Age 65 or older able to pay tax and withdraw funds
with no tax penalty for any reason
Withdrawals
Account
Management
Contributions
Plan Basics
o HSA Withdrawals
 Pay eligible expenses of any family member
who qualifies as a dependent on your tax
return, even if you cover only yourself
 Dependent must be covered under plan, for
expenses to apply toward your plan’s deductible
 Same-sex domestic partners are eligible to be
covered under an employee’s HDHP
o Partner must be employee’s qualified tax
dependent for University’s HSA family
contribution to apply
o Tax-free distributions can be made from the HSA
for the qualified tax dependent’s health expenses
Health Savings
Account (HSA)
Withdrawals
Account
Management
Contributions
Plan Basics
o HSA Withdrawals
 Flexibility to pay expenses from HSA or
pay out-of-pocket and reimburse yourself
 Direct deposit option available
Health Savings
Account (HSA)
Withdrawals
 Use funds for you, your spouse, and your
tax dependents, even if you cover only
yourself
Account
Management
 Keep your receipts for expenses
Contributions
 If not an eligible expense:
o Pay tax on purchase(s)
o 20% tax penalty
Plan Basics
o Limited Purpose Flexible Spending
Account (LPFSA)
 In addition to the HSA, you
have the option to contribute
pre-tax to a Limited Purpose
FSA (LPFSA)
 May only be used for eligible
dental and vision expenses
 Funds are available for use
immediately
 Must use funds by end of
year (use it or lose it rule)
 2014 contribution limit of
$2,500 per employee
Plan Basics
o Limited Purpose Flexible Spending
Account (LPFSA)
 If you choose the LPFSA with
your HSA, you will receive one
card
 PayFlex’s technology will
understand which purchases
should be applied to your
Limited Purpose FSA before
your HSA
 Claim forms and direct deposit
available if you choose to pay
out of pocket and reimburse
yourself
High-Deductible Health Plan Plus HSA
IRS SAYS
Purdue Benefits
www.purdue.edu/benefits
IRS Says
o To offer an HSA with a high-deductible health plan,
certain IRS rules apply
 Higher deductible and out-of-pocket maximum with
lower premiums than traditional plans
 Must combine medical and prescription expenses to
one deductible and out-of-pocket maximum
 Offer preventive care and certain preventive
medications at no cost
 Charge fair market value for services
 (i.e., No “low or no” cost services)
IRS Says
o To participate in an HSA, certain IRS rules
apply
 You must be covered under a highdeductible health plan (HDHP)

You cannot be covered under any nonHDHP plan in addition to your Purdue
HDHP plan

If your spouse has non-HDHP coverage,
you cannot be covered by that plan

If you elect an HSA, your spouse cannot
have a health care FSA

You cannot be claimed as a dependent on
someone else's tax return
IRS Says
o To participate in an HSA, certain IRS rules apply
 Insurance or accounts not
allowed with an HSA:
 Non-HDHP medical
coverage
 Health care flexible
spending account (HCFSA)
or a Spouse's HCFSA
 Part A and/or Part B
Medicare
 TRICARE or TRICARE For
Life
 Any VA benefits used
within previous 3 months
 You can have additional
insurance that provides
benefits for the following
items:
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

Accident
Disability
Dental care
Vision care
Long term care
Specified disease or illness
Insurance that pays a fixed
amount per day for
hospitalization
IRS Says
o To participate in an HSA, certain IRS
rules apply
 You must keep records to show:
 Funds were used exclusively to pay or
reimburse qualified medical expenses,
 qualified medical expenses had not
been previously paid or reimbursed
from another source, and
 medical expenses had not been taken
as an itemized deduction in any year
 Expenses incurred before you
establish your HSA are not
qualified medical expenses
IRS Says
o To participate in an HSA, certain
IRS rules apply
 If funds are withdrawn for
anything other than a
qualified medical expense
prior to retirement, you are
subject to taxes plus a 20%
tax penalty
Purdue’s Special Rules
o Special Limitation Groups
 Long Term Disability
 Not eligible for HSA
 COBRA
 Not eligible for HSA
 Over 65 Active Employees
 Eligible for HSA, if not covered
under Medicare (including Part A)
 Under 65 Retirees
 Not eligible for HSA
 Over 65 Retirees
 Not eligible for HSA
High-Deductible Health Plan Plus HSA
HOW IT WORKS
Purdue Benefits
www.purdue.edu/benefits
How It Works
o Doctor’s office
 Show your Anthem ID card
 Doctor’s office processes through Anthem
 Your doctor’s office will bill you for any amount owed
 Amount owed will count toward your
medical/prescription deductible and out-of-pocket
maximum
 Choose to use your HSA card or another form of
payment
How It Works
o Pharmacy
 Show your Anthem ID card
 Pharmacy processes through Express Scripts
 Payment due at time of purchase
 Choose to use your HSA card or another form of
payment
 Amount owed will count toward your medical/
prescription deductible and out-of-pocket maximum
unless you choose a brand name prescription over
generic (Member Pays The Difference)
How It Works
o Eye care provider
 Show your Purdue ID card
 Choose to use your HSA/LPFSA card or
another form of payment
o Dentist’s office
 If you are covered under a Purdue dental plan, show
your Purdue ID card
 Choose to use your HSA/LPFSA card or another form of
payment
High-Deductible Health Plan Plus HSA
SCENARIOS
Purdue Benefits
www.purdue.edu/benefits
Scenarios
Sandy: Employee only with $1,000 in medical costs*
Under $44,000 annual salary
Annual
premium
$44,000 and above annual salary
Purdue
Health Plan
Purdue
Health Plan
Plus HSA 1
Purdue
Health Plan
Plus HSA 2
Purdue
Health Plan
Purdue
Health Plan
Plus HSA 1
Purdue
Health Plan
Plus HSA 2
Annual
deductible
= $750
Annual
deductible
= $1,750
Annual
deductible
= $2,500
Annual
deductible
= $750
Annual
deductible
= $1,750
Annual
deductible
= $2,500
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
$747
$178
$0
Annual
premium
$1,496
$497
$0
Deductible
+ $750
+ $1,000
+ $1,000
Coinsurance
+ $50
N/A
N/A
- $650
Claims paid
using Purdue
contribution
N/A
- $650
- $650
$350
Sandy pays
medical
expenses +
annual
premium
$2,296
$847
$350
+
+
Deductible
+ $750
+ $1,000
+ $1,000
Coinsurance
+ $50
N/A
N/A
Claims paid
using
Purdue
contribution
Sandy pays
medical
expenses +
annual
premium
N/A
$1,547
- $650
$528
*Scenario assumes in-network providers are used in all cases.
Scenarios
Sandy: Employee only with $5,000 in medical costs*
Under $44,000 annual salary
$44,000 and above annual salary
Purdue
Health Plan
Purdue
Health Plan
Plus HSA 1
Purdue
Health Plan
Plus HSA 2
Purdue
Health Plan
Purdue
Health Plan
Plus HSA 1
Purdue
Health Plan
Plus HSA 2
Annual
deductible
= $750
Annual
deductible
= $1,750
Annual
deductible
= $2,500
Annual
deductible
= $750
Annual
deductible
= $1,750
Annual
deductible
= $2,500
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
$747
$178
$0
Annual
premium
$1,496
$497
$0
Deductible
+ $750
+ $1,750
+ $2,500
Coinsurance
+ $850
+ $650
+ $625
Deductible
+ $750
+ $1,750
+ $2,500
Claims paid
using
Purdue
contribution
Coinsurance
+ $850
+ $650
+ $625
N/A
- $650
- $650
Claims paid
using Purdue
contribution
N/A
- $650
- $650
$3,096
$2,247
$2,475
Annual
premium
+
+
Sandy pays
medical
expenses +
annual
premium
$2,347
$1,928
$2,475
Sandy pays
medical
expenses +
annual
premium
*Scenario assumes in-network providers are used in all cases.
Scenarios
Sandy: Employee only with $40,000 in medical costs*
Under $44,000 annual salary
Annual
premium
$44,000 and above annual salary
Purdue
Health Plan
Purdue
Health Plan
Plus HSA 1
Purdue
Health Plan
Plus HSA 2
Purdue
Health Plan
Purdue
Health Plan
Plus HSA 1
Purdue
Health Plan
Plus HSA 2
Annual
deductible
= $750
Annual
deductible
= $1,750
Annual
deductible
= $2,500
Annual
deductible
= $750
Annual
deductible
= $1,750
Annual
deductible
= $2,500
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
Sandy pays:
$747
$178
$0
Annual
premium
$1,496
$497
$0
+
+
Deductible
+ $750
+ $1,750
+ $2,500
Deductible
+ $750
+ $1,750
+ $2,500
Coinsurance
+ $1,650*
+ $1,750*
+ $2,500*
Coinsurance
+ $1,650*
+ $1,750*
+ $2,500*
- $650
Claims paid
using Purdue
contribution
N/A
- $650
- $650
$3,896
$3,347
$4,350
Claims paid
using Purdue
contribution
Sandy pays
medical
expenses +
annual
premium
N/A
$3,147
- $650
$3,028
$4,350
Sandy pays
medical
expenses +
annual
premium
*Scenario assumes in-network providers are used in all cases.
High-Deductible Health Plan Plus HSA
PLAN TIPS
Purdue Benefits
www.purdue.edu/benefits
Tips
o Take advantage of your 100% covered preventive
benefits, including preventive medications
o Talk with your doctor or pharmacist


Be open and honest, keep the line of communication open
As the patient, you have the right to know
 Ask the tough questions
 Make sure to get copies of medical records and imaging to reduce
duplicate services
o Use Tier 1 labs for the best savings

www.purdue.edu/hr/Benefits/Medical/purdueChoiceFund.html#Tier1labs
Tips
o Check out the Center for Healthy Living
for a high quality, low cost option


$45 flat fee for center visits
No-cost health coach services






Tobacco cessation
Medication therapy management
Nutritional counseling
Employee assistance counseling
Convenient online scheduling option
Tier 1 lab location
o Lower your costs for prescriptions



Use generics
Try home delivery
Check with retailers for low cost
prescription programs
Tips
o Always show your insurance
information, even when you have
to meet your deductible
 Medical and prescription
expenses
 In-network provider discounts
o Keep your receipts and
explanations of benefits (EOBs)
o Consider a Limited Purpose
Flexible Spending Account
 Vision/dental expenses
o Check in to additional coverage
with accident / critical illness
insurance options
Tips
o Benefit from the triple tax advantages
 Contributions you make are pre-tax
 Consider contributing what you
would have paid for 2013 premiums
 Add what you would typically
contribute to your FSA

Funds in HSA grow with interest
tax-free
 You have option to allow HSA to build
now, save funds for later

Funds are tax-free when used for
eligible expenses
 Continue to use HSA funds tax-free
on eligible expenses after retirement,
including Medicare premiums
Tips
o Choose the right level
of care and save

Sample costs for
established patient visit
for sinus infection
symptoms
 Assumes 2014 cost
 No labs/tests included
Center for Healthy Living
Amount Billed
$45
Discount
$0
What’s left to pay
$45.00
Convenience Care Clinic
Amount Billed
$89.00
Discount*
$28.00
What’s left to pay
$61.00
Immediate Care/Urgent Care
* Based on 2013 Cigna discount
Amount Billed
$148.00
Discount*
$46.35
What’s left to pay
$101.65
Tips
o Use available technology
 Center for Healthy Living
 Schedule appointments online
 Castlight
 Shop around for care
 Express Scripts
 Price medications and
order home delivery refills
 PayFlex (Healthhub)
 Track your expenses
 EBenefits
 Update HSA contributions anytime
Center for Healthy Living
1. Schedule an
appointment
2. View lab
results from
your visits
with the
center
Castlight
1.
Search
personalized cost
and quality
information for innetwork providers
and services
2.
Track how close
you are to meeting
your deductible
3.
Connect seamlessly
to Express Scripts
for prescription
pricing, ordering
and more
4.
See tips to help
manage you health
care
Castlight
1. View your
family’s
spending,
including:
 medical
 prescription
 what Purdue
paid
2. Review past
medical
spending to
see how much
you paid and
why
Castlight
Castlight Mobile
 Available for iPhone, Android and
other smartphones
 View personalized cost and quality
information
 View provider details
 Check your deductible and out-ofpocket maximum status
Castlight Guides By Phone
 Full access over the telephone
 Call toll-free 888-272-9572, Monday Friday, 8 a.m. - 9 p.m.
Castlight
www.purdue.edu/castlight
Express Scripts
1. Order home
delivery
prescriptions
2. Make the
switch from
retail to home
delivery
3. Track your
prescription
expenses and
view history
Express Scripts
1. Price
medications
and compare
costs:
 Retail vs.
home
delivery
 Brand name
vs. generic
equivalent
PayFlex
1.
View account
details and
history
2.
File claims, view
eligible
expenses, and
order additional
debit cards
3.
Update settings
to receive
email/text
notifications
4.
Enroll in direct
deposit, submit
documents
online
PayFlex
1. Link your bank
account to
transfer funds
to and from
your HSA with
ease and view
investment
options
2. Set up
recurring
transactions,
print claim
forms, and use
planning tools
PayFlex
PayFlex Mobile
 Access real-time account information



Account balances
Claims status
Transaction details
 Account alerts
 Submit claims
 Take pictures of
receipts and submit
from your phone
EBenefits
1. Increase and
decrease HSA
contributions
at any time
during the year
Resources
www.purdue.edu/benefits
Purdue
Benefits
[email protected]
www.purdue.edu/hrhelp
765-494-2222
Try HR’s new secure message tool!
www.anthem.com
Anthem
Castlight
Center for
Healthy
Living
Check out Anthem’s tools
and resources today!
www.purdue.edu/castlight
888-272-9572
Mobile app available!
www.purdue.edu/healthyliving
Now schedule appointments online!
765-494-0111