2018 Annual Enrollment Consumer Driven Health Plan The Lubrizol Corporation

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1 2018 Annual Enrollment Consumer Driven Health Plan

2 What we ll be talking about today Consumer Driven Health Plan How does the Plan work? What are the benefits of a Consumer Driven Health Plan (CDHP) with a Health Savings Account (HSA)? How does the Lubrizol CDHP compare to the EPO option? 2

3 Why Consider the CDHP? Provides protection for you and your family covered services the same. Operates much like a traditional PPO with Network Providers, but with a higher annual deductible. Network discounted rates for services when you receive care from network providers. Lower payroll deductions. Combined with a tax-advantaged Health Savings Account (HSA) Helps you save for and pay your share of health care expenses tax-free, now and in the future. Lubrizol provides significant contributions to the account. 3

4 How the Lubrizol CDHP Works Plan pays 100% of routine preventive care with no deductible. Preventive Care Preventive Care Deductible is amount you pay before Plan pays. Deductible After deductible, Plan pays 80% of eligible expenses until you reach the annual Out-of-Pocket Maximum (OOP). Coinsurance When you reach the OOP Maximum, the Plan pays 100% of eligible expenses for remainder of the year. 100% Coverage In-Network 4

5 What is a Health Savings Account? HSAs are individually-owned bank accounts The account belongs to you. Unspent money in your account carries over from year to year. It remains yours even if you change jobs or retire. HSAs are used to help pay for both current and/or future health care expenses You can withdraw money tax-free for qualified health expenses for you, your spouse and your eligible dependents. Or you can save funds to pay for future expenses. You can continue to use funds even if you stop participating. HSAs are triple tax-advantaged Contributions are made pre-tax, funds can grow tax free and withdrawals for qualified medical expenses are tax-free. 5

6 HSA Reimbursable Expenses Any tax-deductible health care expense Because health accounts were created by the tax code, it's the Internal Revenue Service (IRS) that determines what expenses can be reimbursed and what cannot. Other expenses: dental and vision Any non-health care expenses Taxes apply Additional 20% tax penalty before age 65 Examples: cosmetic surgery, insurance premiums, teeth whitening, weight-loss IRS Reporting Keep your receipts for expenses you pay for from your HSA. The IRS may ask you to verify funds were used for qualified medical expenses. Use your HSA Optum Debit MasterCard to pay for covered expenses 6

7 HSA Funding LUBRIZOL CONTRIBUTIONS When you open your HSA, Lubrizol will make a contribution $1,000 for single coverage $1,500 for two-person coverage $2,100 for family coverage EMPLOYEE CONTRIBUTIONS You contribute though pre-tax payroll deductions You can change prospectively any time during the year You may choose to make additional after-tax contributions: At any time, any amount, up to the maximum allowed You can claim lump sum amount as a tax deduction on filing 7

8 2018 HSA Contribution Limits 8

9 Comparing the CDHP and EPO Options Factors to Consider Provider Choice CDHP UnitedHealthcare Choice Plus network Bi-weekly Contributions Lower Higher Annual Deductible Higher Lower EPO UnitedHealthcare Choice network Copays No copays Copays for office visits, ER Coinsurance 80% after deductible (in-network) Annual Out-of-Pocket Limit Higher Lower Health Savings Account Available Lubrizol Contributes 80% after deductible (in-network) Not Available 9

10 Here s an example Single Coverage Assumptions: Annual expenses In-Network $300 preventive care $20,000 non-preventive care CDHP deductible $2,250 and OOP $3,750 EPO deductible $750 and OOP $2,250 You Pay CDHP EPO Preventive Care $-0- $-0- Applied to Deductible $2,250 $750 Subject to Coinsurance $17,750 $19,250 Coinsurance % 20% 20% Coinsurance Amount $1,500 $1,500 Annual Premium $1,076 $2,012 HSA Contribution from Lubrizol ($1,000) - TOTAL ANNUAL COST $3,826 $4,262 10

11 Single Coverage Out-of-Pocket Expense by Plan $4,500 $4,000 $3,500 Annual Out-of-Pocket $3,000 $2,500 $2,000 $1,500 CDHP EPO $1,000 $500 $0 $500 $1,500 $5,000 $10,000 $20,000 $50,000 Annual Claim Total 11

12 Here s an example Family Coverage Assumptions: Annual expenses In Network $300 preventive care $20,000 non-preventive care CDHP deductible $4,750 and OOP $7,250 EPO deductible $2,150 and OOP $6,750 You Pay CDHP EPO Preventive Care $-0- $-0- Applied to Deductible $4,750 $2,150 Subject to Coinsurance $15,250 $17,850 Coinsurance % 20% 20% Coinsurance Amount $2,500 $3,570 Annual Premium $3,613 $6,746 HSA Contribution ($2,100) - TOTAL ANNUAL COST $8,763 $12,466 12

13 Family Coverage Out of Pocket Expense by Plan $16,000 $14,000 $12,000 Annual Out-of-Pocket $10,000 $8,000 $6,000 CDHP EPO $4,000 $2,000 $0 $500 $1,500 $5,000 $10,000 $20,000 $50,000 Annual Claim Total 13

14 Special HSA Enrollment Considerations Employees cannot have other health insurance coverage, including a spouse s Plan, unless it is a qualified high deductible health Plan. Employees cannot be receiving Social Security and enrolled in Medicare. Employees cannot contribute to a pre-tax health care spending account. Healthcare expenses for covered non-tax dependents, such as an adult child or domestic partner, cannot be reimbursed through the HSA (must be a tax dependent). 14

15 You Control Your HSA You always have a choice about how to use your HSA Pay off deductible Use for other eligible health care expenses Unused dollars roll over Save for future expenses Grows tax-free over time Take it with you 15

16 Using Your Health Savings Account Optum Bank Debit MasterCard Online bill payment at myuhc.com Checkbook option ATM cash withdrawals Fees may apply 16

17 Filing Claims & Paying Bills - Medical STEP 1 Receive care at hospital, doctors office, etc. Show your UnitedHealthcare Insurance Card and DO NOT PAY. STEP 2 Provider sends claim to UHC for processing. Generally, you do not pay the provider until UHC determines negotiated price and provides an electronic Explanation of Benefits to you and the provider. STEP 3 Once the provider receives an Explanation of Benefits from UHC, if you HAVE NOT met your annual deductible, you are responsible for paying the provider, based on the negotiated price. If you HAVE met your annual deductible, UHC will pay the provider directly and you are responsible for any coinsurance. 17

18 Filing Claims & Paying Bills At the Pharmacy Present your CVS Caremark prescription ID card. Pharmacy processes the claim directly with Caremark at point of sale, determines discounted price and applies eligible expenses to your deductible and/or determines the coinsurance amount you owe. Your share of the prescription s cost may be paid: With your OptumBank Debit MasterCard, or Out-of-pocket. 18

19 Top Five Reasons to Use an HSA ❶ You get a discount on your health care expenses. ❷ You get to keep the money in your HSA, no matter what. ❸ You can prepare for unexpected medical expenses. ❹ You can invest your HSA dollars. ❺ You can use your HSA for anyone in your family. 19

20 Lubrizol CDHP & HSA Retirement Savings Health Saving Accounts provide a unique tax-advantaged way to save for post-employment health care expenses in retirement: HSA dollars grow tax-free, not tax-deferred like a traditional 401(k) HSA withdrawals for qualified healthcare expenses are tax-free. HSA funds can be used to pay for a broad range of medical, prescription, dental and vision care expenses in retirement. HSA funds can be used to pay for Medicare Part B premiums, Medicare Part D prescription drug premiums, and Medicare Advantage premiums (NOT MediGap premiums). Once you are Medicare-enrolled, it is too late to save money in an HSA 20

21 HSA Beneficiary Options When you open your HSA, it is important to designate your beneficiary to determine what happens to the funds upon your death. If your spouse is the named beneficiary, your account will transfer automatically to your spouse at death and continues as a tax-free HSA. If the beneficiary is anyone other than your surviving spouse, the account ceases to be an HSA as of the day of your death. Your non-spouse beneficiary must include in his or her gross income the fair market value of your HSA account at your date of death. 21

22 Manage your HSA from MyUHC.com Claims & Accounts > Optum Bank Health Savings Account (HSA) > Optum Bank HSA). 22

23 Single Sign-on to Optum Bank 23

24 Online Bill Payment Through Optum Bank 24