HSA/HDHP Presentation 5/6/2013

Report
© GEA 2013
Glastonbury Public Schools
May 6, 2013
Presenter: Josh Steffenson
All sample values and calculations are according to GEA
negotiated benefits. Dollar amounts for other bargaining
units will vary.
© GEA 2013

An account that you own.

Both you and your employer make
contributions to this account to pay for
current and future medical expenses.

This account is used in conjunction with a
high deductible health plan (HDHP) –
The HDHP is your ‘insurance’ plan.
© GEA 2013
Tax free dollars on: Contributions,
Investment Earnings, and Withdrawals for
qualified medical expenses.
 Reduced health care premiums.
 Rewarded for staying healthy.
 Dollars not used toward deductible can
be used for qualified medical expenses.
 Your health care is exactly the same,
the only thing that changes is the way
you pay.

© GEA 2013
Traditional Insurance

Each employee pays
a percent of the cost
of the premium. (Ex:
GEA 2013/14 – 18.5%)

Each employee pays
a respective ‘copay’
for services.
HDHP / HSA

Each employee pays
a percent of the cost
of the premium. (Ex:
GEA 2013/2014 – 15%)

Each employee pays
the full cost of every
service until their
deductible is met.
Traditional (PPO) - Family
HDHP (Anthem) - Family
© GEA 2013




Per paycheck contribution: $150.14
Annual contribution (20 paychecks):
$3002.80
Board Contribution to HSA (GEA: 75% of
deductible) - $3750
Deductible: $5000 – No copays ever – Out
of pocket maximum $1250
Per paycheck contribution: $230.24
 Annual contribution (20 paychecks):
$4604.80
 Varying copays for each respective
service.

© GEA 2013
Employer contribution to HSA, both amount and date(s) of contribution are a
negotiated benefit.
© GEA 2013
Annual contribution (20 paychecks): $3002.80
 At most, $1250 toward your deductible.
 TOTAL: $4252.80 (This is the max amount. You
will only pay this much if you reach your
deductible).
Traditional (PPO) - Family
HDHP (Anthem) - Family


Note: Your contribution to HSA is tax free,
potentially reducing the actual total cost.
Annual contribution (20 paychecks): $4604.80
 + copays ($20 Office Visit, $250 Inpatient, etc)
 TOTAL: $4604.80 + Copay total.


Note: This cost is $352 more than the HDHP
option and does not include copay costs and
HSA tax savings.
© GEA 2013







Office Visits
Prescription Medicines
Emergency Room Visit
Medical Testing / Laboratory Work
Inpatient Admission
Outpatient Treatment
Mental Health / Substance Abuse Treatment
Well visits and preventative treatment (physicals,
mammograms, vision testing, etc.) DO NOT cost
anything, but therefore do not count toward meeting
your deductible.
© GEA 2013
Enroll in your high deductible health plan (HDHP)
 Establish an HSA at a qualified financial institution. (You choose your
bank).
 Choose how much to contribute to your HSA. (One time payment,
payroll deduction, etc.)

Start receiving care. Show insurance card at first visit.
 Receive explanation of benefits AND bill from service provider.
 Pay via debit card or check assigned to your HSA. (Make sure EOB
and bill match.)

Keep track of your expenses for tax return or in case of IRS audit.
 Funds roll over from year to year
 Resources are available to assist you. (Employer, Anthem /
ConnectiCare, Financial Institution, Accountant.)


Switch jobs? Take your HSA account with you.
© GEA 2013

Remember: Funds roll over from year to
year and accrue interest / may be
invested.

IRS Publication 502 provides complete list of
qualified medical expenses.
http://www.irs.gov/pub/irs-pdf/p502.pdf

Common uses of HSA funds include:
Eyeglasses, Laser Eye Surgery, Braces,
Dental Work, Post Retirement Insurance
Premiums / Medical Care.
© GEA 2013

Lowest employee
premium cost.

Operates as an ‘open
HMO.’ – No referrals are
necessary if within
network. Out of network
treatment only possibly
with ConnectiCare’s
authorization.

Provides out of network
benefits. Out of network
treatment is subject to a
cost share, up to an
annual maximum dollar
amount.

Medical ‘Centers for
Excellence’ are
considered in-network.
© GEA 2013
Appendix A - Sample Anthem Explanation of
Benefits
 Appendix B – Choosing a financial institution for
your HSA account.
 Appendix C - IRS Rules for HSA contributions.
 Appendix D – Calculated Employee Savings if full
deductible is met.
 Appendix E – Sample Scenario – 4 Person Family –
Deductible Met - Anthem
 Appendix F – Sample Scenario – Single Coverage –
Deductible Not Met - ConnectiCare

Appendix A
© GEA 2013
This is a sample document. The document you will receive will vary, but be of the
same nature.
Appendix B
© GEA 2013
You may select a financial institution of your choice. When
choosing a bank consider the following:
Accessibility – Consider a bank with locations close to
home/work so that you may easily deposit / withdraw
funds.
 Payment Methods – Some banks offer checking accounts,
debit cards or both as means of paying your medical bills.
 Service Fees – Banks may charge a small monthly or
annual service fee to your account. Make sure you are
aware of any fees before establishing your account.
 Most banks provide information about their HSA accounts
online. Additionally the business office can offer
assistance in selecting a bank.

© GEA 2013
Appendix C
The IRS has established maximum contribution amounts to an
HSA for 2013. This includes contributions from all sources
(employer, self, other). Contributions beyond the maximum are
taxable as income and subject to a penalty.
Maximum
Contribution
Additional Allowable
Contribution if Age 55+
Single Plan
$3250
+$1000
2 Person / Family
$6450
+$1000 or +$2000 if both
over age 55
Although your year for deductible purposes runs from July through
June, these contribution maximums are for calendar year 2013.
© GEA 2013
Appendix D
Current Plan
HDHP Plan
Single
2 Person
Family
Anthem PPO
Anthem
-$31.80
+$41.40
+$352.00
Anthem HMO
Anthem
+$71.40
+$268.00
+$630.20
C.Care HMO
C.Care
+$199.00
+$546.20
+$974.40
Anthem PPO
C.Care
+$336.20
+$845.60
+$1345.20
Note: These values do not include the income tax savings
you will receive for contributions to your HSA. You do not
need to itemize your deductions for HSA contributions to
reduce your tax burden.
Additionally, these values do not include the various copays
you would have incurred while reaching your deductible.
This, combined with tax benefits, will ensure that all plans have
guaranteed savings for teachers over current non HDHP
options.
© GEA 2013
Employee
Appendix E
3 Dr. visits @ $150 = $450
 12 Rx @ $75 = $900
 Total = $1,350

2 Dr. visits @ $150 = $300
 12 Rx @ $50 = $600
 1 X-Ray @375
 Total = $1275
Spouse

Child 1





2 Dr. visits @ $150 = $300
2 Specialist visits @ $220 = $440
Laboratory Work $550
3 Rx @ $75 = $225
Total = $1215
© GEA 2013
Appendix E
2 Dr. visits @ $150 = $300
 1 Emergency Room @ $875
 2 Rx @ $75 = $150
 Total = $1325
Family Total
Child 2


Employee + Spouse + Child 1 + Child 2
= $5165

Deductible = $5000 (You pay $5000 only)
Premium savings ($352 vs. Anthem PPO)
 Tax savings (Income tax savings on $1250
contribution to HSA)
 Savings from 41 copays not incurred.
Savings

© GEA 2013
Appendix F
Employee





Total / Savings




2 Dr. visits @ $150 = $300
12 Rx @ $ 60 = $720
Total = $920
Employee Total = $920
You pay full $920 (Deductible of $2500 not met).
Premium savings ($199 C.Care HMO vs. HDHP with
employee making $625 contribution to HSA)
Tax savings (Income tax savings on $625
contribution to HSA)
Savings from 14 copays not incurred.
Remaining $1580 in HSA rolls over to next year and
is yours to keep. – Employer makes annual
contribution of $1875 again on July 1 (GEA only)

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