QUESTIONS & ANSWERS KAISER PERMANENTE HSA QUALIFIED DEDUCTIBLE HMO PLAN UNDERSTANDING YOUR PLAN. kp.org

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1 QUESTIONS & ANSWERS A different kind of plan. A different way to pay for care. Put pretax 1 funds from your salary into a Health Savings Account (HSA) to pay for your qualified medical expenses. 2 UNDERSTANDING YOUR PLAN What is the HSA-Qualified Deductible HMO Plan? This plan gives you access to high-quality care at Kaiser Permanente. Plus, it offers flexibility in how you spend your dollars on qualified medical expenses. As with our other deductible plans, you ll have little or no out-of-pocket costs for most preventive care services. Such services range from booster shots to routine physical exams. With this plan, you can use pretax funds from your Health Savings Account (HSA) to pay for your qualified medical expenses, including payments toward your deductible. Here are some key facts about the HSA-Qualified Deductible HMO Plan: It pairs our deductible HMO plan with an HSA. You put pretax money from your salary into an HSA that you can use to pay for qualified medical expenses. You can grow the account and use the funds for qualified medical expenses later in life including after you retire. The money is not considered part of your wages, so it s not subject to federal income taxes. You can pay for your copayments, coinsurance, deductible, and prescriptions from your HSA. How do deductible plans work? You probably know about deductibles from your auto insurance policy. Our deductible HMO plans work much the same way. Your medical deductible is a set total amount you re responsible for paying for certain covered services in a calendar year. Preventive services are not subject to the deductible. When you come in for a visit with your personal physician and you haven t reached the deductible limit, you pay the full charges for covered care. When you ve reached your deductible limit, you ll pay just a copay or coinsurance for covered services, depending on your plan. To protect you from expenses adding up, your plan has an out-of-pocket maximum, or limit. This puts a cap on what you pay each calendar year. Most of the money you spend on your care counts toward your out-of-pocket maximum. Copays and coinsurance don t count toward your deductible, but they do count toward your out-of-pocket maximum. Once you reach your out-of-pocket maximum, we ll pay for most covered services for the rest of the calendar year. For more information, visit. 1

2 Does the deductible apply to preventive care? Most preventive services do not count toward the deductible. However, for certain preventive care services, you ll have little or no out-of-pocket costs, whether or not you ve reached your deductible. What is preventive care? Preventive care can help you avoid illness and protect your health. We offer many preventive care services, including: routine physical exams well-child visits scheduled prenatal care hearing tests immunizations routine well-woman visits, including mammograms, pelvic exams, clinical breast exams, and Pap tests diabetes screenings prostate cancer screenings, including prostate-specific antigen (PSA) tests cholesterol screenings colonoscopies How does a deductible HMO differ from a traditional HMO plan? You pay more for care when you receive it, but you pay a lower premium. You pay for the services you re scheduled to receive when you check in. You may be billed later if you receive additional services during your appointment. For example, your physician may order tests that weren t scheduled. How do my deductible and my out-ofpocket maximum work? All HSA-qualified Deductible HMO plans have a deductible and an out-of-pocket maximum. For an individual plan, the individual calendaryear deductible limit must be met first. That means, it should be met before you can begin paying copays or coinsurance for covered services (except for certain preventive care). For family coverage (two or more members), there are two different types of deductible plan aggregate and embedded. If you have an aggregate deductible plan, here s how the deductible and out of pocket maximum would be applied: For a family of two or more, the family deductible applies to your entire family. You can satisfy the deductible with expenses incurred by one family member or a combination of family members. Once the deductible has been satisfied, you ll pay only copays or coinsurance for covered services for the rest of the year. The out-of-pocket maximum accumulates in the same way as the deductible. Each family member s expenses (including deductibles, copays, and coinsurance) count toward the family out-of-pocket maximum. Once you reach the family out-of-pocket maximum, We ll pay for 100 percent of covered services for all family members for the rest of the calendar year. 2

3 If you have an embedded deductible plan, here s how the deductible and out-of-pocket maximum would be applied: For a family of two or more, an individual deductible is part of the family deductible. If one person meets his or her individual deductible before the family meets its family deductible, only that person will begin paying copays or coinsurance for covered services. ueach remaining family member will continue to pay full member charges for services that are subject to the deductible until he or she satisfies the individual deductible or until the family as a whole meets its family deductible. Once the family deductible has been satisfied, all family members will pay only copays or coinsurance for most covered services for the rest of the year. Each family member s expenses for covered services count toward his or her individual out-of-pocket maximum. Once that individual maximum is reached, We ll pay for 100 percent of covered services for that family member for the rest of the calendar year. Once the family out-of-pocket maximum has been met, we ll pay for 100 percent of covered services for all family members for the rest of the calendar year. For more information about your benefits, consult your Evidence of Coverage. What medical services are subject to the deductible and contribute toward the out-of-pocket maximum? All charges that you pay for covered services, except certain preventive care, count toward your deductible limit. All charges that you pay for covered services count toward your out-of-pocket maximum. Consult your Evidence of Coverage for more information. Most preventive services All other services Prescription drugs Will the dollars apply toward my deductible? NO Will the dollars apply toward my out-of-pocket maximum? With HSA-qualified plans, medical and pharmacy services have one combined deductible. Can I see a Kaiser Permanente physician with this plan? Yes. You can see Kaiser Permanente doctors and affiliated providers. 3

4 HSA BASICS What is a health savings account? An HSA is a savings account that works with an HSA-qualified deductible HMO plan. You can use pretax 1 dollars to pay for qualified medical expenses. What can I use my HSA funds for? You can use the funds in your HSA to pay for deductibles, coinsurance, copays, and other qualified medical expenses 2 under your health plan. This is for you and your covered dependents. Examples include: eye exams hospital visits prescription drugs primary and specialty care visits X-rays and lab tests You can even use your HSA funds to pay for qualified medical expenses not covered by your health plan. But those expenses will not contribute toward your medical deductible or your out-of-pocket maximum. For more information about your benefits, refer to your Evidence of Coverage. Who is eligible for an HSA? To be eligible for an HSA, you need to meet the following requirements: You can t be enrolled in Medicare. You can t be eligible to be claimed as a dependent on someone else s tax return. You can t have additional health coverage that is not an HSA-qualified deductible plan. (There are certain exceptions, including specific injury insurance or accidents, disability, dental care, vision care, or long-term care.) You can t have received benefits from the Department of Veterans Affairs in the past three months. You may want to consult with a financial advisor for more information about HSA eligibility. Who can contribute to an HSA? You, your family members, and your employer are all permitted to contribute to your HSA. The same annual limits on the contributions made to your account apply no matter who makes the contributions. How much can I contribute? For 2011, annual contributions to an HSA are capped at $3,050 for individuals or $6,150 for families. These maximums may be changed for inflation each year. You may contribute to your account until April 15 following the year for which you want to make contributions. How do I use my HSA to pay for qualified medical expenses? There are several ways to pay for your qualified medical expenses with your HSA: Debit card Use your HSA debit card, if you have one, either uwhen you get care, or uby writing your card number on your bill and sending it in. 4

5 Reimbursement Pay out of pocket using your own funds, and get reimbursed by submitting a claim to your HSA administrator. Combination If you don t have enough funds in your HSA to cover the full charges, you can use the balance available in your account and pay the difference with another form of payment. When should I submit HSA reimbursement requests? You can submit HSA reimbursement requests for out-of-pocket expenses anytime, as long as the expenses are incurred on or after the date you ve established the HSA. If you have more questions, contact your HSA administrator. HOW AN HSA-QUALIFIED DEDUCTIBLE HMO PLAN WILL WORK FOR YOU What are the advantages of the HSA-qualified plan? Lower-cost option. You can contribute pretax dollars into the HSA. You can grow the account and use the funds for qualified medical expenses later in life including after you retire. The money is not considered part of your wages, so it s not subject to federal income taxes. How do I get started? There are two ways to enroll in a plan using your HSA: 1. Your employer sets up the plan with a specific HSA administrator. 2. You choose your own financial institution for your HSA. When can I start accessing my HSA funds? You re eligible to use your HSA funds once you establish the account. What if I leave my current employer or retire and still have money in my HSA? The money in your HSA belongs to you. If you ever leave your company, you can take your HSA with you. What if there s money left in my account at the end of the plan year? At the end of the plan year, the money remaining in your HSA will be rolled over to the next year. What if I use all the money in my HSA before the end of the plan year? When your HSA funds are used up, you ll need to pay any further health care expenses you incur through the end of the plan year. That includes the deductibles, copays, and coinsurance that apply under your plan. 5

6 Can my HSA contribution level exceed my health plan deductible? Yes. The maximum amount you re permitted to contribute to your HSA is set annually by the federal government, regardless of your deductible amount. If my coverage starts in the middle of the calendar year, how much can I contribute to my HSA? If you become covered in the middle of the year, you may still contribute up to the federally set maximum contribution amount for that year. Here are important timeframes for you to keep in mind when contributing to your HSA: You must be enrolled in an HSA-qualified deductible plan at least for the full month of December in the year you wish to contribute to your HSA. You must also remain enrolled for the full calendar year following your mid-year enrollment (or your extra contribution above the prorated amount will be included in your taxable income and subject to an additional 20 percent penalty tax). Can I make my entire HSA contribution at the beginning of the year? Yes. At the beginning of the year, you can contribute as much as you d like to your HSA, up to the applicable limit. You might, however, have to make a corrective distribution later in the year if your eligibility status changes during that year (for example, if you change from family to individual coverage). Can I make catch-up contributions if I am 55 or older? Yes. You can make an additional contribution of $1,000 in 2010 and in For more information about HSAs, go to treasury.gov/offices/public-affairs/hsa. PAYING FOR CARE What can I expect to pay for a visit? To find out how much you ll pay for a visit, you can Use our online tools to estimate your costs: at. Call Member Services, weekdays, 8 a.m. to 5 p.m. Denver/Boulder members can call: (TTY: ) or toll free at (TTY: ) Southern Colorado members can call: toll free at (TTY: ) When you come into Kaiser Permanente for care, you ll be asked to pay a copay, coinsurance, or deductible payment up front. This will depend on the service you re scheduled to receive. If you receive additional services during your visit that weren t scheduled, you ll be billed for those later. If the amount you paid for services and their actual cost differ, you ll get a refund or a bill later. Consult your Evidence of Coverage for more information. 6

7 ACCESSING CARE Where can I get care? Kaiser Permanente has more than 1,800 physicians and affiliated community providers in Colorado. We have 21 medical offices in our Denver/ Boulder and Southern Colorado service areas to better serve you. Most offer many services in one location, which can help you save time, and many have evening and weekend hours. Please refer to your service area s Member Resource Guide for medical office locations, important phone numbers, and services. If I m away from my home area and have an emergency, 3 will this be covered? Yes. We cover emergency care from Plan providers and non-plan providers anywhere in the world. Please see your Evidence of Coverage for more information. Whom should I call about my deductible or deductible accumulation or with general questions about my health plan? Call Member Services, weekdays, 8 a.m. to 5 p.m. Denver/Boulder members can call: (TTY: ) or toll free at (TTY: ) Southern Colorado members can call: toll free at (TTY: ) For pharmacy receipts, please contact the pharmacy where the item in question was purchased. COMMON TERMS Aggregate family plans: In an aggregate deductible plan, there is only one deductible and one out-of-pocket maximum for your entire family. Annual out-of-pocket maximum: The maximum amount you ll pay for covered services in a calendar year. Coinsurance: The percentage of charges you pay when receiving certain covered services. Copayment (copay): The fixed fee you pay when you receive covered medical services or prescriptions. Deductible: A total set amount you pay in a calendar-year before we provide most covered services at a copayment or coinsurance. Embedded family plans: In an embedded family plan, each family member has a deductible and out-of-pocket maximum, and the family as a whole has a family deductible and family out-of-pocket maximum. Preventive care: Medical services, exams, and screenings that can help avoid illness and protect your health. Such care ranges from booster shots to well-baby visits to mammograms. Qualified medical expense: An expense that meets the definition of a qualified medical expense under Internal Revenue Code Section 213(d) and that may be reimbursed with funds from an HSA. 7

8 1 The tax references in this document relate to federal income tax only. Consult with your financial or tax advisor for information about state income tax laws. Federal and state tax laws and regulations are subject to change. If tax, investment, or legal advice is required, seek the services of a qualified professional. 2 To view the list of qualified medical expenses defined under Internal Revenue Code Section 213(d), download IRS Publication 502, Medical and Dental Expenses, at As an HSA holder, you ll ultimately be responsible for determining whether an expense is a qualified medical expense under the tax laws. Effective January 2011, over-the-counter medicine, except insulin, will no longer qualify for payments from HSA funds, unless accompanied by a doctor s prescription. 3 If you have an emergency medical condition, call 911 or go to the nearest hospital. An emergency medical condition is (1) a medical or psychiatric condition that manifests itself by acute symptoms of sufficient severity (including severe pain) such that you could reasonably expect the absence of immediate medical attention to result in serious jeopardy to your health or body functions or organs, or (2) active labor when there isn t enough time for safe transfer to a Plan hospital (or designated hospital) before delivery, or if transfer poses a threat to your (or your unborn child s) health and safety, or (3) a mental disorder that manifests itself by acute symptoms of sufficient severity such that either you are an immediate danger to yourself or others, or you are not immediately able to provide for, or use, food, shelter, or clothing, due to the mental disorder _11_DC_HSA_DHMO