Understanding the Consumer Driven Health Plan. and Health Savings Account

Transcription

1 Understanding the Consumer Driven Health Plan and Health Savings Account

2

3 The Consumer-Driven Health Plan (CDHP), coupled with a Health Savings Account (HSA), is an innovative health plan that helps to reduce health care costs. By actively engaging you in decisions about your health care, this type of plan provides you with Key Features 100% preventive and wellness care coverage with network providers. Certain preventive prescriptions for just a 10% coinsurance payment, with a waived deductible. No copays for complete cost transparency. All qualified employee paid medical expenses count toward the deductible and out of pocket maximum. more choice, flexibility and control over how you spend your health care dollars.

4 Your Health Savings Account (HSA) An HSA is a personal health care banking account that you can use to pay out of pocket medical expenses with pre tax dollars. Eligibility You are eligible to open and fund an HSA if: You are enrolled in an HSA-eligible consumer-driven health plan (CDHP). You are not covered by your spouse/domestic partner s non-cdhp health plan. Your spouse does not have a health care flexible spending account or health reimbursement account. You are not eligible to be claimed as a dependent on someone else s tax return. You are not enrolled in Medicare or TRICARE. You have not received Veterans Administration benefits during the last 90 days (service-related care will not be taken into consideration). Highlights Sample Company Contributions Employee Only Family Coverage Sample Company contributes up to to your HSA. You can also contribute to the account through pre tax payroll deductions, up to the annual maximum contribution mandated by the IRS. 20XX IRS Maximum Contributions Individual Family Catch-Up Contribution (ages 55 and older) $1,000 Funds withdrawn from your HSA to pay qualified medical expenses are tax-free. Your balance grows with tax-free interest and some financial institutions offer investment opportunities that also grow tax-free. Any unused funds in your HSA roll over from year to year. Your HSA can be used for your expenses and those of your spouse and/or dependent(s), even if they are not covered by the CDHP. Your HSA is portable. If you leave Sample Company or retire, your account and its balance goes with you.

5 How the HSA Works Annual Deductible Employee Only Family Out of Pocket Maximum Employee Only Family IN NETWORK OUT OF NETWORK1 Physicians Services XX%* XX%* Preventive Care XX% 2 XX% 2 Maternity Care XX%* XX%* Outpatient Surgery XX%* XX%* Prescription Drugs IN NETWORK Maintenance Medication XXX% 3 All Other Drugs XX%* *After Deductible 1 Out of network charges are paid at Reasonable and Customary rates. In addition to being responsible for payment of your out of network deductible, you are responsible for any charges over and above what is considered Reasonable and Customary. 2 Preventive Care is covered at XXX% in network only. Out of network Preventive Care is subject to the out of network deductible and coinsurance. 3 Maintenance Medication is defined as drugs listed on the U.S. Preventive Services Task Force List, as administered by Sample Provider. Remember Using an in-network professional lowers your out-of-pocket costs. Professionals in your network have agreed to charge lower fees and your Plan s in-network services cover a larger share of the charges. Catch Up Contributions Individuals age 55 and older may make an additional annual contribution to their HSA, which is called a catch up contribution.

6 EXAMPLE This is Rich and his Family Rich protects his family with insurance on his employer s consumer driven health plan. This year, he finds himself eligible for and decides to open a health savings account. His Plan In Network Deductible: $2,500 Out Of Pocket: $7,500 HSA Contribution Limit: $6,550 IN NETWORK OUT OF NETWORK Health Plan Pays 80% 50% Rich Pays 20% 50% Preventive Care Pharmacy Coverage 100% Covered Subject to Deductible Not Covered Rich elects the HSA option and chooses Family coverage He decides to contribute $5,000 to his health savings account to use for eligible medical expenses. Rich and his family only visit doctors in their network, ending up with $3,000 in medical expenses for the year. Because his deductible is $2,500, Rich s plan will cover 80% of the remaining $500. Rich is left to pay just $100 out of his own pocket. Rich pays 20% or $100

7 How Can You Control Your Health Care Costs? You have control over how your health care dollars are spent. But with the cost of services varying widely, make sure you re making the best choice for your health and your wallet. Enter health care cost transparency tools. These online tools, which are available through most major health insurance carriers, allow consumers to compare costs for everything from prescription drugs to major surgeries.

8 Address Line 1 Address Line 2 City, State ZIP Understanding the Consumer Driven Health Plan (CDHP) and Health Savings Account (HSA)