How Does a CDHP Work with an HSA

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1 How Does a CDHP Work with an HSA 1 What is an HSA? A Health Savings Account (HSA) is a tax-advantaged checking account that works in conjunction with your Consumer Driven Health Plan (CDHP). Allows you to set aside pre-tax or post-tax dollars which can be used for any qualified medical expenses, such doctor s visits, hospital stays, prescriptions, dental, vision, etc. HSA accounts can accumulate funds Use it or Keep It. HSA dollars rollover each plan year. And goes with you in the event you retire or leave the University. 1

2 Who Qualifies to Open an HSA? IRS Eligibility Guidelines: You are covered under a consumer driven health plan (CDHP). You have no other health coverage (unless it is a qualified CDHP). You aren t enrolled in Medicare Part A or Part B Not covered through Tri-care Not covered through a general-purpose FSA plan. You cannot be claimed as a dependent on someone else's tax return. How is an HSA Funded? In a single lump-sum contribution or with multiple contributions. This is the only benefit you can stop/change throughout the plan year outside open enrollment and a life event. Contribution Methods o Via pre-tax payroll deductions, which can be stopped, started, and/or changed as needed throughout the calendar year. o Via post-tax deposits (tax benefits would be realized when filing your tax return) Contributions can be made by the employee, the employer, or any other person on the employee s behalf 2

3 How Can I Use my HSA Funds Your HSA funds can be used tax free to pay for out-of-pocket qualified expenses, even if the expenses are not covered by your CDHP. There are hundreds of qualified expenses, including: o Medical deductible and out-of-pocket costs o Dental care expenses o Orthodontics expenses o Vision care expense, glasses, contacts, etc. An extensive list can be found posted on the HSA Bank website along with other valuable resources. Who Can Use My HSA Funds You may use the funds from your HSA account tax free for the qualified expenses of the following: o Yourself o Your spouse o All dependents you claim on your tax return A child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. Note: Your spouse and qualified dependents do not have to be enrolled on your medical plan to use the funds from your HSA account. 3

4 HSA Accounts for Covered Dependents Since you can cover your children to age 26 regardless of their student, marital or employment status, you may cover a child who is not your tax dependent on your medical plan. Such dependents cannot take advantage of the funds from your HSA account. Your covered children who are not your tax dependents and who are otherwise eligible to open an HSA account may do so. They may contribute up to the full family maximum for the given tax year since they are enrolled on your family medical plan. Since they will not able to make contributions through payroll deductions, they will reap the tax advantages when filing their income tax returns each year. HSA IRS Maximums Employee Only $3,450 $3,500 Family $6,900 $7,000 Maximums should also take into account any contributions made by DePauw University Spouses combined cannot go over the IRS limits per calendar year. If you or your spouse is age 55 or older and HSA-eligible, you may each contribute to your own HSA account an additional $1,000 catchup contribution. 4

5 Tax Considerations Your HSA Bank will not require that you substantiate your purchases with a receipt, however, it is important to keep you receipts and documents of qualified expense in the event of an IRS audit. Contributions to your HSA are reported on Form Distributions from your HSA are reported on Form This information is needed for tax filing purposes each year. Non-qualified distributions are taxable and may have an associated 20% tax penalty in addition to 10% income tax. Over contributions to your HSA Account may result in a 6% Excise Tax. HSAs After Age 65 Active employees turning 65 have the option to accept or decline enrollment in Medicare, including Medicare Part A. o Employees who accept enrollment in any part of Medicare are no longer eligible to make or receive contributions to an HSA. o Employees who decline enrollment may continue to make and receive contributions to an HSA. Qualified distributions remain tax free regardless of your eligibility to contribute. 5

6 HSAs After Age 65 (cont d) Non-qualified distributions are taxable but no longer carry a 20% penalty after age 65. Medicare Part(s) A, B, D and Medicare HMO premiums may be paid or reimbursed with tax-free HSA dollars. You cannot use your HSA to pay for Medigap premiums. If you elect Medicare at age 65, your maximum HSA contribution for the year you elect will be prorated by the number of months you were not enrolled in Medicare. When you do decide to enroll into Medicare, you must stop your HSA contribution 6 months prior to your Medicare effective date. How a CDHP Works Doctor submits claim to insurance company Insurance applies network discounts UMR sends EOB Doctor sends invoice to you You pay provider There may be exceptions when visiting a provider that may require payment at the time of the visit. 6

7 Lowest CDHP 1 Medical Plan In-Network Out-of-Network Anthem Network United Healthcare Choice Plus Network Deductible Employee Only $3,000 $4,500 Family (Embedded) Individual $3,000 $4,500 Family Maximum $6,000 $9,000 Coinsurance 80% / 20% 60% / 40% Out-of-Pocket Maximum (includes deductible) Employee Only $4,500 $9,000 Family Individual $4,500 $9,000 Family Maximum $7,350 $18,000 Primary Care Visit 20% after deductible 40% after deductible Specialty Care Visit 20% after deductible 40% after deductible Urgent Care Center 20% after deductible 40% after deductible Preventive Care 100% Covered 40% after deductible Emergency Room 20% after deductible Hospital Services 20% after deductible 40% after deductible Out-Patient Services 20% after deductible 40% after deductible Mental Health & Substance Abuse 20% after deductible 40% after deductible Prescription Drugs RETAIL Generic 0% after deductible 40% after deductible Preferred Brand (Tier 2) 40% after deductible 40% after deductible Non-Preferred Brand (Tier 3) 50% after deductible 40% after deductible MAIL ORDER Generic 0% after deductible Not covered Preferred Brand (Tier 2) 40% after deductible Not covered Non-Preferred (Tier 3) 50% after deductible Not covered Middle CDHP 2 Medical Plan In-Network Out-of-Network Anthem Network United Healthcare Choice Plus Network Deductible Employee Only $2,000 $4,000 Family $4,000 $8,000 Coinsurance 80% / 20% 60% / 40% Out-of-Pocket Maximum (includes deductible) Employee Only $4,000 $8,000 Family $7,000 $16,000 Primary Care Visit 20% after deductible 40% after deductible Specialty Care Visit 20% after deductible 40% after deductible Urgent Care Center 20% after deductible 40% after deductible Preventive Care 100% Covered 40% after deductible Emergency Room 20% after deductible 40% after deductible Hospital Services 20% after deductible 40% after deductible Out-Patient Services 20% after deductible 40% after deductible Mental Health & Substance Abuse 20% after deductible 40% after deductible Prescription Drugs RETAIL Generic 0% after deductible 40% after deductible Preferred Brand (Tier 2) 40% after deductible 40% after deductible Non-Preferred Brand (Tier 3) 50% after deductible 40% after deductible MAIL ORDER Generic 0% after deductible Not covered Preferred Brand (Tier 2) 40% after deductible Not covered Non-Preferred (Tier 3) 50% after deductible Not covered 7

8 High CDHP 3 Medical Plan In-Network Out-of-Network Anthem Network United Healthcare Choice Plus Network Deductible Employee Only $1,500 $3,500 Family $3,000 $7,000 Coinsurance 80% / 20% 60% / 40% Out-of-Pocket Maximum (includes deductible) Employee Only $3,000 $6,000 Family $7,000 $14,000 Primary Care Visit 20% after deductible 40% after deductible Specialty Care Visit 20% after deductible 40% after deductible Urgent Care Center 20% after deductible 40% after deductible Preventive Care 100% Covered 40% after deductible Emergency Room 20% after deductible 40% after deductible Hospital Services 20% after deductible 40% after deductible Out-Patient Services 20% after deductible 40% after deductible Mental Health & Substance Abuse 20% after deductible 40% after deductible Prescription Drugs RETAIL Generic 0% after deductible 40% after deductible Preferred Brand (Tier 2) 40% after deductible 40% after deductible Non-Preferred Brand (Tier 3) 50% after deductible 40% after deductible MAIL ORDER Generic 0% after deductible Not covered Preferred Brand (Tier 2) 40% after deductible Not covered Non-Preferred (Tier 3) 50% after deductible Not covered DePauw Wellness Center The campus Wellness Center is available to all faculty and staff participating on the DePauw University medical plan, as well as their dependents. There is no fee for most services provided in the Wellness Center as they are covered through health insurance premium contributions. Services include: Clinic visits Chronic disease management Health risk assessments Referrals and care navigation Lab draws 8

9 Pharmacy - ExpressScripts Prescription Drug Benefits Will be managed by ExpressScripts (ESI). There is a possibility that changes will occur to our drug formulary as well as prior authorization or step therapy requirements. If you or one of your dependents will be impacted by any changes, you will receive a letter from ESI at your home prior to January 1 outlining the issue and the steps that can be taken to resolve it. Reminder that DePauw s plan also has a Consumer Driven Health (CDH) Preventive Medication list Standard Plus o Medications on this list would be covered at 100% o The list is posted on the HR webpage 17 Pharmacy Claim Process A: HSA Debit Card Pharmacy Expense You Decide How to Pay C: Cash/Non HSA When purchasing prescriptions, the network Pharmacies (i.e, Walgreens, CVS, Kroger) will charge you a discounted amount based on the plan (if applicable). You then decide how to pay (HSA card or out of pocket). With a prescription, you may also purchase other over-the-counter items. Please note you may need to reimburse yourself through the HSA Bank online tool. 18 9

10 Other Ways to Save Preventive Screenings These office visits are 100% covered by the plan and do not require funds from your HSA or FSA Examples: Mammograms, PSA Tests, Colonoscopies Immunizations, Flu Shots and more. Costly Emergency Visits Emergency room visits can be very costly. Please go, if you need to go. Visit urgent care and retail clinics for simple cases of flu, colds, etc can help reduce costs. DePauw Wellness Center No fee for most services provided. Conveniently close to work. Online appointment scheduling or call Wellness coaching available 19 Other Ways to Save Con t Compare pharmacy prices, look for coupons, and find assistance programs for your high cost medications: GoodRx This is a tool you can access via internet or by downloading an app to your smartphone. You will often find coupons on this site that can offer significant savings. Rx Help Centers This organization can assist in finding resources to reduce or eliminate the cost of high-cost brand name medications by advocating directly with drug manufacturers. Contact by phone at (866) Needy Meds This a web-based program for finding lower cost prescription drugs. Get more information online at

11 Finding a Provider In-Network Choose the option that s easiest for you! Visit umr.com and select Find a provider. Then enter United Healthcare Choice Plus Network and start your search. View estimated cost of visits & services Call UMR toll free at and ask a representative for help. 21 Remember you can find your network information and customer service number on your ID card. Finding a Provider Walk Thru 11

12 Introducing ALEX ALEX is a decision support tool that will assist you in the following ways: Compare your anticipated out-of-pocket costs in each medical plan based on your answers to a few simple questions. Show your required contribution for each medical plan. Provide education about each medical plan design as well as how each plan works with HSA accounts. Make a recommendation about which plan would be most appropriate for you and any dependents you might be covering based on the information you provide. Note: This tool can be accessed through a link located on the DePauw Human Resources webpage. Alex Live Walk Thru 12

13 Employee Action Open enrollment Period: November 5 through November 16 This will be an ACTIVE enrollment, meaning that your current elections will not be rolled over. ALL Employees will need to make active elections for the benefits if you want coverage January 1, Complete in the ADP portal 25 Questions 13