October-2014-High-Deductible-Health-Care-Plan-Option

Report
Optional Health Care Plan
Fall 2014
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 Plan: 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
Kaiser Health Benefits Survey 2014
25,000
Solanco PPO Plan Tiers:
Annual Rate
Employer
19,700
20,000
Employee
13,649
15,000
10,000
Employer + 1
Employee +1
8,443
Employer Family
5,000
507
955
-
2014-15
1,576
Employee Family
HDHCP Plan Design & Pricing:
Rates for 2014-15 PPO and 2015 H S A HDHCP
Employer PPO
Employer + 1 PPO
Employer Family PPO
8,443
13,649
19,700
Employer HDHCP
Employer +1 HDHCP
Employer Family HDHCP
6,417
10,373
14,972
2,026
3,276
4,728
H S A Objective:
Front Load Employee Account; Create Opportunity to
Build up Bank Balance; Maintain Quality Health Care
Contibutions to H S A
Employee only
Tier
Employee* Total To H S A 2014 Max**
2015 Max**
District Yr 1
District Yr 2
District Yr 3
1,600
1,500
1,250
500
500
500
2,100
2,000
1,750
3,300
3,350
District Yr 1
District Yr 2
District Yr 3
Family Tier
3,200
3,000
2,500
Employee*
1,000
1,000
1,000
4,200
4,000
3,500
6,550
6,650
* Employee = Employee share is the required amount, it is from
Premium Share the Employee is paying as per the CBA. These funds are
collected by the district and returned to the Employee H S A account.
**Maximum Excludes additional $1,000 an Employee can contribute in
the year turning age 55 or if age 55 or older.
H S A Bank Account
Employee A
Employee B
(Contributes
2015
Maxium)
Annual
Use/Spend
1,600
1,500
1,250
500
500
500
1,750
1,850
2,100
1,000
1,100
1,200
1,100
900
550
2,350
2,250
2,150
Totals
4,350
Total 3 yr Employer and Employee amounts
at Min and Max
1,500
5,700
3,300
2,550
6,750
5,850
10,050
Employee A
Employee B
(Contributes
2015
Maxium)
Annual
Use/Spend
Employee H S A Bank
Account
Year 1
Year 2
Year 3
Employee( Family) H S
A Bank Account
Employer
Employer
Total A
(Employer
Plus Emp A
less spend)
Total A
(Employer
Plus Emp A
less spend)
Total B
(Employer
plus Emp B
less spend)
Total B
(Employer
plus Emp B
less spend)
Year 1
Year 2
Year 3
3,200
3,000
2,500
1,000
1,000
1,000
3,450
3,650
4,150
2,000
2,200
2,400
2,200
1,800
1,100
4,650
4,450
4,250
Totals
8,700
3,000
11,250
6,600
5,100
13,350
Total 3 yr Employer and Employee amounts
at Min and Max
11,700
19,950
Your Money: To your own Bank
Account
Employee H S A Bank
Account
Year 1
Year 2
Year 3
Employee( Family) H S
A Bank Account
Year 1
Year 2
Year 3
Employee A
500
500
500
Employee A
1,000
1,000
1,000
Emp A per pay
( 24 pays)
20.83
20.83
20.83
Emp A per pay
( 24 pays)
41.67
41.67
41.67
Employee B
(Contributes Emp B per
Min Less
2015
pay (24 pays) Optional Max
Maxium)
1,750
72.92
52.08
1,850
77.08
56.25
2,100
87.50
66.67
Employee B
(Contributes Emp B per
Min Less
2015
pay (24 pays) Optional Max
Maxium)
3,450
143.75
102.08
3,650
152.08
110.42
4,150
172.92
131.25
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 2013, 2014 & 2015)
• Individual 2015 = $3,350 (2014 $3,300) (2013 $3,250)
• Family 2015 = $6,650 (2014 $6,550) (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
IRS Reporting W-2
• Participants of Solanco School District’s High Deductible Health Plan
(HDHP) are required to complete IRS Form 8889 - HEALTH SAVINGS
ACCOUNTS (HSA) with their annual federal income tax filing to
comply with Internal Revenue Service requirements. Employee and
employer contributions to a HSA and distributions from a HSA
during the calendar year must be reported on Form 8889.
• What information must be reported?
• Solanco School District’s W-2 forms report the total amount of
contributions forwarded to the employee’s HSA, by the school
district, during the calendar year. Total contributions forwarded to
the employee’s HSA are reported in box 12, preceded with the code
‘W’. HSA contributions deducted from the employee’s payroll and
HSA contributions provided by the employer for the benefit of the
employee are combined and reported in box 12.
IRS Reporting 1099
• How do I report distributions from my HSA for
federal income tax purposes?
• The employee (owner of HSA) should receive an
IRS Form 1099-SA from Health Equity (HSA
administrator) with the total amount distributed
from the HSA during the calendar year reported in
box 1 (Gross Distribution). Report this amount on
Line 14a, Part II of IRS Form 8889. Complete
additional lines of Part II, as applicable.
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 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
• $3,350 (self-only coverage) 2015
• $6,650 (family coverage) for 2015 [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-bymonth 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 Portal
www.myhealthequity.com
Prepopulated With Your Claims
View and Pay Claims Online
HSA How To
Doctors Visits
1
Go to the doctor
No co-pays
2
Doctor sends insurance
carrier the bill
HealthAmerica adjusts price based on
discounts
3
Claim integrated
into member portal
Pay doctor from HSA funds, if funds are
available. Pay out of pocket if funds
aren’t available and reimburse yourself
later.
*This card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. The Bancorp Bank; Member FDIC.
Member HSA Experience
Integrated Medical Claims
If deductible
has not been
met, provider
will bill
member for
their plan
negotiated
portion.
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
daily
If deductible
has been met,
plan will pay
provider for
service. If
member owes
coinsurance,
provider will bill
member for
their portion.
daily
Member pays
outstanding
provider bill
using funds
on HSA card
or personal
funds through
member
portal
daily
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.
HSA How To
Pharmacy Prescriptions
1
Go to pharmacy
Show your HealthAmerica card
2
Pharmacy
applies discount
Pay with your
HSA card
3
Pharmacy sends claim to
insurance carrier
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.
HSA Member Experience
Pharmacy Claims
Member goes to
Pharmacy and shows
HealthAmerica card
daily
Pharmacy verifies
eligibility.
If out of pocket max
is not met, member
can pay using HSA
card or out of pocket.
immediate
Pharmacy and
HSA card send
payment
information to
Health America
and
HealthEquity
for record
keeping and
account
tracking.
daily
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.
Member Services
HealthEquity Member Services is available
everyday, 24/7/265 at
866.855.4066
Building Health SavingsSM through
Live Service 24/7/365
Personalized 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
Proposed District and Employee Contribution to Optional H S A QHDHCP
Coverage
Tier
District H S A
Contribution
Minimum
Employee
premium
share
Total
Minimum
HSA
Entry
Year
Single
Family
$
$
1,600 $
3,200 $
500 $
1,000 $
2,100
Year One
4,200
Single
Family
$
$
1,500 $
3,000 $
500 $
1,000 $
2,000
4,000 Year Two
Single
Family
$
$
1,250 $
2,500 $
500 $
1,000 $
1,750
3,500
Year
Three
Eligibility & Funding
• For January 1:
– 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
Deposits to Health Equity Bank
Account.....
• Year one: 100% of Board Contribution made in
January
– 2015 “Class” January 2015 = $1,600 or $3,200
• Successive years: 65% in January --& 35% in See
Separate Hand out sheet
• Employee Payroll Contributions – After Each Payroll
[No less than Monthly]
• E-mail notifications from Health Equity----Funds in
and out.
Timelines / Schedule
• October Presentations
• PPO 60 day PPACA notice and Summary of
Benefit & Coverage (SBC’s)issuance
• October 29; Central Office; meeting and
employee Q & A
• November 14 Enrollment deadline
– Time to Set up Accounts; Payroll deduction set-up:
both mandatory and optional entry; Funding
alignment; WEB site set-up and on-line tools
• New ID Cards---January 1st start
(Not just H S A)
For January 1, 2015
• 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 $1,627.92 for 2015
– [E + 1 Rate of $13,649.28 x 12%]
• Dual Coverage issues impact H S A selections ( i.e. you
are “covered” by your spouses plan too)
Deductibles and Co-pay Changes
Hospitalization Data for 2014-15
Current PPO Plan Jan 2015
QHDHP
Participating
Provider
Non-Participating
Provider
Participating
Provider
Non-Participating
Provider
Individual
$200
$400
$2,000
$4,000
Family
$600
$1,200
$4,000
$8,000
$35.00
80% after
deductible
$15.00
20% after
deductible
$25.00
20% after
deductible
$25.00
$25.00
$15.00
20% after
deductible
$25.00
20% after
deductible
Deductible
Co-Pays
Office Visit (PCP)
Office Visit (Specialist)
$45.00
Urgent Care Center
$35.00
80% after
deductible
80% after
deductible
$25.00
80% after
deductible
$35.00
80% after
deductible
Chiropractic
Mental Health - Outpatient
Additional Resources
• District web site under Business office
Department
– www.solanco.org
– Go to Departments, and then the Business Office
page
• Health Equity web site below:
– www.healthequity.com/hsalearn

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