Compare Your Medical Plan Options

Transcription

1 Compare Your Medical Plan Options You ve got a lot going on. Between meeting your new coworkers, learning your duties and scoping out the best spots for lunch, you also need to think about your options for McKesson medical coverage. You only have 31 days from the date on your New Hire Kit to enroll in the coverage that works for you. That s why we want to help you get to know your medical plan options the HSA, HSA Plus and HRA Core plans. The HSA, HSA Plus and HRA Core plans share many features, such as comprehensive medical and prescription drug coverage, no-cost preventive care (in-network), and limits for your coinsurance* and out-of-pocket costs. The medical plans also differ in many ways. A major difference is whether the medical plan comes with a health savings account or a health reimbursement account. As you compare your coverage options, think about how the deductible, out-of-pocket maximum and plan account work to meet your healthcare needs. You can start with the chart below. Note that EE = employee, SP = spouse and DP = domestic partner. Your Primary Medical Plan Options HSA plan HSA Plus plan HRA Core plan Deductible The amount you need to pay out of pocket before you and the plan begin sharing costs. $3,500 EE only $5,250 EE + SP/DP or EE + Child(ren) $7,000 EE + Family $2,125 EE only $3,175 EE + SP/DP or EE + Child(ren) $4,250 EE + Family $2,125 EE only $3,175 EE + SP/DP or EE + Child(ren) $4,250 EE + Family Out-of-pocket maximum The most you pay each year for your annual deductible + coinsurance. In-network: $6,250 EE only $9,375 EE + SP/DP or EE + Child(ren) $12,500 EE + Family Out-of-network: $9,000 EE only $13,500 EE + SP/DP or EE + Child(ren) $18,000 EE + Family In-network: $4,625 EE only $6,925 EE + SP/DP or EE + Child(ren) $9,250 EE + Family Out-of-network: $7,125 EE only $10,675 EE + SP/DP or EE + Child(ren) $14,250 EE + Family Medical plan account Use your account to pay eligible expenses that count toward your deductible. In-network: $4,625 EE only $6,925 EE + SP/DP or EE + Child(ren) $9,250 EE + Family Out-of-network: $7,125 EE only $10,675 EE + SP/DP or EE + Child(ren) $14,250 EE + Family Health savings account Health savings account Health reimbursement account * Coinsurance is the percentage you and your medical plan pay for eligible expenses when you re sharing costs. Coinsurance kicks in once you meet your annual deductible. MEDICAL PLAN ACCOUNTS

2 Health Savings Account The HSA and HSA Plus plans come with a health savings account that has many financial benefits, such as before-tax contributions, tax-free withdrawals for eligible healthcare expenses (now and in retirement), account ownership. A health savings account can also act as a long-term investment account, similar to a 401(k). When you enroll in the HSA or HSA Plus plan for the first time, Fidelity automatically sets up a health savings account for you. However, you need to activate your health savings account on the Fidelity website ( before you can access or use it. It s easy, and once you activate your account once, you don t have to do it again. There are special rules if you re only eligible to put money in a health savings account for part of the year. You can find more information in IRS Publication 969 at Account Highlights Triple Tax Advantage* 1. Before-tax and tax-deductible contributions that lower your taxable income 2. Tax-free withdrawals for eligible healthcare expenses 3. Tax-free earnings from interest and investments * Some states tax contributions and interest/earnings. Check with your tax advisor to see how your account is affected or contact Fidelity for assistance. McKesson Contribution (HSA Plus plan) Along with the money you put aside, if you enroll in the HSA Plus plan, McKesson puts money in your health savings account as soon as administratively possible after your HSA Plus coverage begins. The IRS limits how much you can put into your health savings account and the amount McKesson contributes depends on who s covered under your plan, as shown in the chart below IRS Health Savings Account Contribution Limits Coverage McKesson Annual Contribution Your Monthly Contribution Limit Your Annual Contribution Limit HSA Plan Employee $0 $ $3,400 Spouse/ Domestic Partner or Children or Family $0 $ $6,750 HSA Plus Plan Employee $750 $ $2,650 Spouse/ Domestic Partner or $1,100 $ $5,650 Children Family $1,500 $ $5,250 If you re age 55 or older, you can make catch-up contributions of $1,000 per year ($83.33 per month). Ownership Your health savings account is yours to keep whether you change medical plans, leave McKesson or retire. Fidelity is the account administrator. Control You decide how and when to spend the money in your account. Similar to a regular checking account, you can only spend the money you have available in your account. You can use your money to cover eligible medical, prescription drug, dental and vision expenses that count toward your deductible. Investment Opportunities You can start investing through Fidelity when you have at least $500 (the minimum investment amount) in your health savings account. Reasons to Choose a Health Savings Account You can: Enjoy tax advantages that save you money and lower your taxable income. Own your account and control when to spend your money on eligible healthcare expenses. Get a McKesson deposit in your account if you enroll in the HSA Plus plan. Save your money for eligible healthcare expenses after you retire. Explore investment opportunities through Fidelity. Learn more at the Total Rewards Library > Flyers > Health Savings Account Overview. TIP You can use your health savings account to pay eligible healthcare expenses not normally covered by your medical plan. See a list of eligible expenses at totalrewardslibrary > Flyers > Health Savings Account Qualified Expenses. 2

3 Health Reimbursement Account The HRA Core plan comes with a McKesson-funded health reimbursement account that s used automatically by your medical plan carrier to pay for eligible medical and prescription drug expenses. Account Highlights McKesson Credit McKesson puts money in your health reimbursement account as soon as administratively possible after your HRA Core coverage begins. The amount McKesson puts in depends on who s enrolled in your medical plan: $750 Employee only $1,100 Spouse/Domestic Partner or Child(ren) $1,500 Family You can t add money to your account. McKesson Owns the Account You lose your health reimbursement account if you change medical plans, leave McKesson or retire. Automatic Payments Before you pay out of pocket, your medical plan carrier automatically uses your health reimbursement account to pay your eligible expenses. You don t control how or when to spend the money in your account. Your Medical Plan Carrier Administers the Account Your medical plan automatically pays your eligible medical and prescription bills from your health reimbursement account. These payments count toward your deductible. Once your account is empty, you begin paying medical and prescription drug expenses out of pocket or with a standard healthcare flexible spending account (FSA). Learn more about standard healthcare FSAs at > Flyers > Flexible Spending Account Overview. Reasons to Choose a Health Reimbursement Account Account dollars are automatically applied to eligible expenses. Account dollars are available to spend immediately. Use It or Lose It Any money left in the account at the end of the current year doesn t carry over to the next year. You have until December 31 to use your account to pay for eligible expenses. 3

4 Understand the Medical Plan Accounts A health savings account and health reimbursement account work in different ways. Compare the features of each account to see which one is right for you. Health Savings Account Health Reimbursement Account Includes McKesson funding Is yours to keep HSA Plus plan only Counts eligible expenses toward deductible Covers eligible medical expenses Covers eligible prescription drug expenses Covers eligible dental expenses Covers eligible vision expenses Applies automatically to eligible expenses Can earn interest Provides freedom to choose how and when to spend account dollars Offers investment opportunities in stocks, mutual funds and bonds Can be used for non-medical expenses* Carries over account dollars ** Withdrawals made for ineligible expenses are subject to normal income tax, plus a 20% tax penalty if you re under age 65. 4

5 Maria age 30, employee-only coverage Maria is healthy and has low healthcare needs. She catches a bad cold and develops persistent sinusitis. Maria s doctor prescribes a generic antibiotic to treat the infection. Let s see how the HSA, HSA Plus and HRA Core plans each cover Maria s eligible healthcare expenses. How Maria s Expenses Are Paid HSA plan HSA Plus plan HRA Core plan $61.20 Maria s annual premium* $714 Maria s annual premium* $714 Maria s annual premium* $285 Maria s total eligible expenses $285 Maria s total eligible expenses $285 Maria s total eligible expenses How Maria Pays Her 2017 Expenses How Maria Pays Her 2017 Expenses How Maria Pays Her 2017 Expenses $3,400 Health savings account balance ($3,400 from Maria, $0 from McKesson) $3,400 Health savings account balance ($2,650 from Maria, $750 from McKesson) $750 Health reimbursement account balance ($0 from Maria, $750 from McKesson) - $285 Amount Maria chooses to use from her health savings account -$285 Amount Maria chooses to use from her health savings account -$285 Amount paid from Maria s health reimbursement account - $0 Amount Maria pays out of pocket - $0 Amount Maria pays out of pocket - $0 Amount Maria pays out of pocket $3,115 Amount left in Maria s health savings account. These dollars carry over to next year and are Maria s to use whenever she wants. The HSA plan may be right for Maria because: Maria has low healthcare needs, so having a high deductible isn t a concern for her. The HSA plan has the lowest premiums of all McKesson medical plans. Maria is able to put more money in her health savings account because she pays less for her premium. Maria saves the most for current and future expenses under this plan. $3,115 Amount left in Maria s health savings account. These dollars carry over to next year and are Maria s to use whenever she wants. The HSA Plus plan may be right for Maria because: McKesson puts $750 her health savings account that helps her save on eligible expenses right away in January. The money McKesson puts in is Maria s to keep and carries over to the following year. Maria chose to set aside money in her health savings account to save even more. $465 Amount left in Maria s health reimbursement account. This money doesn t carry over to the following year. The HRA Core plan may not be right for Maria because: Maria has low healthcare needs and pays for more coverage than she needs. Maria doesn t use all the dollars in her health reimbursement account and loses what she doesn t use by December 31, If Maria had enrolled in HSA Plus plan, she would have paid the same premium and received the same $750 from McKesson in her health savings account. Health savings account dollars would ve been Maria s to keep. * Maria s premium is based on her Vitality participation. Learn more by viewing Medical Premium Savings at > New Hire. Review what each plan covers and what the costs are in the Summaries of Benefits and Coverage (SBCs) available at > Plan Documents. 5

6 Darren and Courtney employee + spouse/domestic partner coverage Darren and Courtney are physically active and love the outdoors. They have moderate healthcare needs that include physical therapy, prescription medications and the removal of a skin growth. Let s see how the HSA, HSA Plus and HRA Core plans each work to cover Darren and Courtney s healthcare expenses. How Darren and Courtney s Expenses Are Paid HSA plan HSA Plus plan HRA Core plan $ Darren s annual premium* $2, Darren s annual premium* $2, Darren s annual premium* $2,025 Darren and Courtney s total eligible expenses How Darren and Courtney Pay Their 2017 Expenses $6,750 Health savings account balance ($6,750 from Darren, $0 from McKesson) $2,025 Darren and Courtney s total eligible expenses How Darren and Courtney Pay Their 2017 Expenses $6,750 Health savings account balance ($5,650 from Darren, $1,100 from McKesson) $2,355** Darren and Courtney s total eligible expenses How Darren and Courtney Pay Their 2017 Expenses $1,100 Health reimbursement account balance ($0 from Darren, $1,100 from McKesson) -$2,025 Amount Darren and Courtney choose to use from their health savings account -$2,025 Amount Darren and Courtney choose to use from their health savings account -$1,100 Amount paid from Darren and Courtney s health reimbursement account -$0 Amount Darren and Courtney pay out of pocket -$0 Amount Darren and Courtney pay out of pocket -$1,255 Amount Darren and Courtney pay out of pocket $4,725 Amount left in Darren and Courtney s health savings account. These dollars carry over to next year and are theirs to use whenever they want. The HSA plan may be right for Darren and Courtney because: They have moderate healthcare needs, so a high deductible isn t a concern for them. The HSA plan has the lowest premiums of all McKesson medical plans. Darren and Courtney use the money they save on premiums to put the maximum amount into their health savings account. Darren and Courtney have coverage for medications on the HSA Preventive Therapy Drug List. $4,725 Amount left in Darren and Courtney s health savings account. These dollars carry over to next year and are theirs to use whenever they want. The HSA Plus plan may be right for Darren and Courtney because: The $1,100 McKesson puts in Darren and Courtney s health savings account helped pay over half of their 2017 expenses. Darren and Courtney have coverage for medications on the HSA Preventive Therapy Drug List. $0 Amount left in Darren and Courtney s health reimbursement account at the end of the year. The HRA Core plan may not be right for Darren and Courtney because: Darren and Courtney can t add money to their health reimbursement account. After using the $1,100 McKesson put in their health reimbursement account, Darren and Courtney had to pay $1,255 out of pocket. The HSA Preventive Therapy Drug List isn t available under the plan, so Darren and Courtney don t get 100% coverage for generic medications on the list. ** Darren s premium is based on his Vitality participation. Learn more by viewing Medical Premium Savings at > New Hire. ** Darren and Courtney s healthcare expenses are higher because the HSA Preventive Therapy Drug List isn t available under the HRA Core plan. Review what each plan covers and what the costs are in the Summaries of Benefits and Coverage (SBCs) available at > Plan Documents. 6

7 Lucy and Tim married with children, family coverage The Meyer family has high healthcare needs that include prescription medications, pediatric visits, treatment for chicken pox and a trip to the urgent care clinic. Let s see how the HSA, HSA Plus and HRA Core plans each work to cover the Meyers healthcare expenses. How the Meyers Expenses Are Paid HSA plan HSA Plus plan HRA Core plan $ Lucy s annual premium* $3, Lucy s annual premium* $3, Lucy s annual premium* $6,000 The Meyers total eligible expenses How the Meyers Pay Their 2017 Expenses $6,750 Health savings account balance ($6,750 from the Meyers, $0 from McKesson) $6,000 The Meyers total eligible expenses How the Meyers Pay Their 2017 Expenses $6,750 Health savings account balance ($5,250 from the Meyers, $1,500 from McKesson) $6,000 The Meyers total eligible expenses How the Meyers Pay Their 2017 Expenses $1,500 Health reimbursement account balance ($0 from the Meyers, $1,500 from McKesson) -$6,000 Amount the Meyers choose to use from their health savings account -$4,600** Amount the Meyers choose to use from their health savings account -$4,600** Amount paid from the Meyers health reimbursement account -$0 Amount the Meyers pay out of pocket -$0 Amount the Meyers pay out of pocket -$3,100 Amount the Meyers pay out of pocket $750 Amount left in the Meyers health savings account. These dollars carry over to next year and are the Meyers to use whenever they want. The HSA plan may not be right for the Meyers because: Although the HSA plan has the lowest premiums of all McKesson medical plans, the high deductible means the Meyers need to spend most of the money in their health savings account to cover their expenses. $2,150 Amount left in the Meyers health savings account. These dollars carry over to next year and are the Meyers to use whenever they want. The HSA Plus plan may be right for the Meyers because: The $1,500 McKesson puts in their health savings account helped pay for a large portion of their expenses. By having a lower deductible than the HSA plan, the Meyers met their deductible sooner and began paying at the coinsurance rate for eligible expenses. The Meyers have coverage for medications on the HSA Preventive Therapy Drug List. $0 Amount left in the Meyers health reimbursement account at the end of the year. The HRA Core plan may not be right for the Meyers because: The Meyers can t add money to their health reimbursement account. After using the $1,500 McKesson put in their health reimbursement account, the Meyers have to pay $3,100 out of pocket. The HSA Preventive Therapy Drug List isn t available under the plan, so the Meyers don t get 100% coverage for generic medications on the list. ** Lucy s premium is based on her Vitality participation. Learn more by viewing Medical Premium Savings at > New Hire. ** The Meyers total eligible expenses are $6,000. However, they meet their annual deductible in the HSA Plus and HRA Core plans. This means they pay 20% coinsurance on eligible expenses over $4,250, which equals $4,600. Review what each plan covers and what the costs are in the Summaries of Benefits and Coverage (SBCs) available at > Plan Documents. 7

8 HR Support Center 855.GO.MCKHR ( ) Press 1 for the McKesson Benefits Center for Health, Vitality and Pension questions. Benefit experts are available 7 a.m. - 6 p.m. Central time, M-F. Oprime 1 para asistencia en español a través del McKesson Benefits Center. UPoint Enroll, review and manage your Total Rewards. Total Rewards Library Get Total Rewards information from any computer or mobile device connected to the internet. November H