IU Human Resources High Deductible Health Plan (HDHP) & Health Savings Account (HSA) INDIANA UNIVERSITY

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1 IU Human Resources High Deductible Health Plan (HDHP) & Health Savings Account (HSA) INDIANA UNIVERSITY

2 HDHP & HSA Overview Health Savings Account Tax-free Bank Account Medical Prescriptions Dental Vision High Deductible Health Plan Comprehensive Medical Office Visits Hospital Mental Health Durable Medical Equipment Prescriptions

3 OVERVIEW MEDICAL PLANS

4 2018 Medical Plan Options Traditional Medical Plan Anthem PPO $500 Deductible Plan High Deductible Health Plans IU Health HDHP Anthem PPO HDHP Due to the U.S. Department of State regulations, J- 1 Visa holders can only enroll in the Anthem PPO $500 Deductible Plan.

5 Glossary of Terms Annual Deductible the amount the employee is responsible for paying before the insurance begins to share in the costs of medical services. Co- insurance the percentage that the employee is responsible for paying after the Annual Deductible amount has been paid out. Annual Out- Of- Pocket (OOP) Maximum the amount after which you pay nothing for in-network covered medical services;; the maximum amount the employee would be responsible for paying in any given year. Deductible You pay 100% of the costs You pay 20% of the costs Coinsurance Out-of- Pocket Max You pay 0% of the costs

6 Deductible & Out- of- Pocket Maximums Combine together All non-preventive medical services expenses All non-preventive prescription expenses All family members expenses $2,600 $0 $0 $0 $0 $0 $600 O R $0 $0 $1,200 $800 $0

7 MEDICAL PLANS PLAN DETAILS High Deductible Health Plans

8 IU Health HDHP Plan Plan uses the IU Health provider network exclusively primarily in Indianapolis, Kokomo, Bloomington No out- of- network coverage except for: emergencies urgent care if more than 50 miles from home a dependent of an Indiana- resident employee who lives out- of- state for non- medical reasons.

9 IU Health HDHP Plan Annual Deductible: $2,500 for employee- only coverage level $5,000 for all other coverage levels Deductible applies to all services except preventive medical services and preventive prescriptions Co- insurance: 20% Out- of- Pocket Maximum: $3,000 for employee- only coverage level $6,000 for all other coverage levels

10 Anthem PPO HDHP Plan One Card can be used at: Medical providers Vision providers Pharmacies New insurance card for 2018 Annual Deductible: $1,350 for employee- only coverage level $2,700 for all other coverage levels Deductible applies to all services except preventive medical services and preventive prescriptions Co- insurance: 20% Out- of- Pocket Maximum: $2,700 for employee- only coverage level $5,400 for all other coverage levels Separate deductible and OOPM for out- of- network services

11 Prescription Drugs for HDHP Plans Preventive Prescriptions: (list on go.iu.edu/oe) Pay $0 for ACA Preventive Rx Pay 20% for Rx on Preventive Drug list no deductible applies All other Rx is subject to HDHP Deductible and Out- of- Pocket Maximums. Medical and Rx costs accumulate together. Once Out- of- Pocket Max is met then plan pays 100% of Rx costs. Rx Cost lookup online at go.iu.edu/oe Call CVS caremark with questions. Retail: 30 day supply Mail Order & Retail at CVS: 90 day supply Specialty Drugs: only available through Mail Order

12 HSA PLAN DETAILS Health Savings Account

13 Health Savings Account Savings Bank Account For Healthcare Expenses Paired with enrollment in an HDHP Help prepare for Retirement Offers Triple Tax Savings

14 Tax Advantage #1 No taxes on contributions No Federal Income Taxes No State Income Taxes No Local Income Taxes No Social Security Taxes (OASDI) No Medicare Taxes (FICA) Example, a married employee with an annual salary of $34,000 with no allowances and no other deductions may save approximately percent in taxes.

15 HSA Contributions Your Contributions: Minimum: $300 Maximum: IRS limit minus IU Contribution IU s Contributions: Those enrolled in the IU Health HDHP: $1,600 for employee- only coverage level $3,200 for all other coverage levels Those enrolled in the Anthem PPO HDHP: $1,300 for employee- only coverage level $2,600 for all other coverage levels

16 Annual HSA Contribution Maximums IRS Annual HSA Contribution Maximums Employee HDHP Coverage: $3,450 Family HDHP Coverage: $6,900 Age 55+ catch- up : $1,000 Includes contributions from all sources (University contribution and Employee contributions) Spouse can contribute to their own HSA up to another $1,000 if covered on an HDHP Maximum contributions are based on 12- months of HDHP coverage; Partial Year eligibility is prorated

17 Tax Advantage #2 No taxes on interest or earnings Cash Account earns savings interest Open an Investment Account $1,000 initial account transfer Set up one time or recurring transfers Manage investments online (FREE) Speak with a Nyhart registered investment representative (FREE)

18 Tax Advantage #3 No taxes on funds when used for IRS approved health expenses Medical Prescriptions Dental Vision Hearing Aids Acupuncture COBRA premiums Medicare premiums

19 More Advantages Can be used for the health expenses of any tax dependent (spouse, child(ren), dependent relative, etc.) Flexibility of access o Use debit/visa card at healthcare providers (physician offices, pharmacy, dental, vision providers) o Use Online tools to pay bills directly o Use Online tools to transfer money o Download the mobile app

20 More Advantages Unused funds are always yours to keep o o o o Even when you retire Even when you leave IU employment Even when you are no longer eligible to make contributions Even when you pass away, your funds can pass to your beneficiaries Review & update every year!!! Can use funds to reimburse yourself for expenses incurred all the way back to the date the account was opened

21 Health Savings Account Card Expiration Anyone who transitioned their HSA from Chase to Nyhart back in 2015 Nyhart card will expire in December 2 new cards will be issued late November/early December Will come in a non-descript envelope to employee s home Be sure to use new cards in January

22 Health Savings Accounts IRS Rules

23 HSA Restrictions Must meet eligibility requirements to be eligible to make tax- free contributions Until Age 65, must use ONLY for IRS qualified healthcare expenses, otherwise IRS imposes: 20% penalty Income taxes Age 65 or older, can use account for non- healthcare expenses: NO penalty Income taxes

24 Eligibility Rules In order to be an eligible individual and qualify for an HSA, you must meet the following requirements: You must have a valid Social Security Number. You cannot be claimed as a dependent on someone else s tax return. You must be covered under a high deductible health plan (HDHP). You must not have other medical coverage.

25 Eligibility Rules No Other Medical Coverage Requirement Coverage by a federal government program (Medicare A & B or D, Tricare, or VA medical) Receiving Social Security Income (automatically enrolled in Medicare Part A) Coverage by a spouse s medical plan unless it is also an HDHP Coverage by a spouse s Flexible spending account (FSA) Health Reimbursement Arrangement (HRA) IU s TSB Healthcare Reimbursement Account (TSB)

26 Ineligible to make Tax-Free Contributions You can enroll in HDHP plan and waive the HSA No HSA account will be opened; No IU contribution No taxes or penalties to worry about Can still enroll in the TSB Healthcare Reimbursement Account If you are ineligible and still enroll in the HSA You will be required to contribute the $300 minimum to receive the IU Contribution to your account You are responsible for: Filing an Excess Contribution form with Nyhart Reporting all contributions (University and Employee contributions) as taxable income on your annual tax return Paying any taxes or penalties assessed by the IRS. Recommend consulting a tax advisor

27 HSA Record Keeping Requirements Copy of Receipt or EOB Doctor s Prescription or Note Show expense is primarily for medical care Recommended for treatment of a specific medical condition Keep Records for 7 years Shoebox records Scan records Attach receipts to transactions in Nyhart account Keep Records of expenses not reimbursed from HSA

28 HSA Tax Reporting Requirements Form 1099-SA (Distributions) Provided online by Nyhart;; Available mid to late January Form 5498-SA (Contributions) Provided online by Nyhart Available mid to late January Have until April 15 to make additional contributions. Final form available in May Receipts do not get sent to the IRS. Keep receipts and records for use if audited by the IRS Form 8889 (annually with income taxes) Report contributions to your HSA Report distributions from your HSA Figure any taxes or penalties for ineligible contributions and/or distributions

29 HDHP & Health Savings Accounts Resources

30 Nyhart Website iu.nyhart.com View account activity Expense Tracker function Transfer funds online to/from a personal bank account Pay your healthcare expenses directly from account Find common forms Searchable IRS Qualified Expense List

31 Castlight Health hr.iu.edu/benefits/castlight.html Search for a primary care physician Know where you stand in your deductible and out-of-pocket maximum Look up prior medical and Rx claims Learn more about prescription drug alternatives Estimate personalized costs for medical services Compare in-network doctors, facilities, and medical services Receive helpful tips Mobile app available

32 IRS Website Publications 969 Health Savings Accounts and Other Tax- Favored Health Plans 502 Medical and Dental Expenses Tax Forms Form 8889 Instructions for Form 8889

33 HDHP & Health Savings Accounts Questions?