Welcome to the presentation of Wausau School District s 2017 Health Insurance Plan Option overview. While you are viewing this presentation, you have

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1 Welcome to the presentation of Wausau School District s 2017 Health Insurance Plan Option overview. While you are viewing this presentation, you have the option to pause and replay any slides to review the given information at length. 1

2 WSD wants to provide you with the options you need for affordable health care coverage. Today we will be reviewing the available plans for We will explain how these plans works, and what this means for you.

3 WSD will be offering the same Traditional $250/$500 deductible plan, with no changes. Again this year, WSD will also be offering the option of a HDHP with a Health Savings Account. This plan option will have a $1,300 single, $2,600 family deductible and will have access to the same network providers that you currently have with the Traditional plan. With an HSA plan, any family member can meet the full deductible. There does not need to be a combination of family members to meet this. The coinsurance is 100% for covered services after ded for in network and 80% after deductible for out of network. Preventive care will be covered at 100% for in network. Please note - There are no copayments with a HDHP, and all services other than preventive will apply to the deductible first. Once you reach your deductible amount, all in network services, except prescriptions, are covered at 100%. Prescriptions will have a $5/$15/$30 copayment after the deductible, and are then covered at 100%. And WSD will be contributing funds to your HSA based on the percentage you pay toward your insurance premium. In the example shown here, a FT employee contributing 15% to their insurance premium would receive contributions of $1000 for single or $2000 for a family plan to their HSA. And with the savings on premium costs for the HSA plan, employees will save at least 18% or more compared to premiums on the Traditional plan. Additional plan savings information will be provided later in this presentation. Please note, in order to help employees cover costs that arise early in the plan year, the WSD has decided to update the deposit schedule for the HSA funding. HSA deposits will now be made.. 3

4 So what is a Health Savings Account? Otherwise known as an HSA, a health savings account can only be used with a HDHP, and other First dollar coverage, such as copayments that apply before the deductible has been met, are not allowed. A High Deductible Health Plan is a plan with a minimum annual deductible and a maximum out-of-pocket limit. These minimums and maximums are determined annually by the Internal Revenue Service (IRS) and are subject to change. HSAs can only be used for Qualified Medical Expenses, and only after the account has been established. The list of Qualified expenses is the same as is used with a standard FSA and does NOT include over the counter medications, unless you have a prescription from your doctor. 4

5 So how does an HSA work? There are two key components when utilizing a Health Savings Account. First, you must be participating in a qualified HDHP, which is intended to cover serious illness or injury after the deductible has been met. Because it can be difficult to cover out-of pocket expenses with a high deductible plan, the HSA funds are used to offset these costs. Remember, WSD will be funding a portion of your HSA account if this plan is chosen. 5

6 Understanding the maximum annual contribution amounts for your HSA, as determined by federal guidelines, is important. The maximum amount that can be contributed to a health savings account annually for 2017 is $3,400 for a single plan and $6,750 for a family plan. These contributions can be made by an employer, the employee, or both, and are always funded on a pretax basis. For those that are age 55 or over, additional catch up contributions are allowed, up to $1,000 annually. All contributions must stop once you are enrolled in any type of Medicare. 6

7 Some of you may have previously had a Flexible Spending Account to help cover medical expenses. An HSA offers benefits that an FSA cannot. (Review slide) 7

8 HSA funds can be used for you your spouse even if they are not covered under your HDHP and your dependents for costs listed as a qualified medical expense. If you use these funds for costs that are not listed as a qualified medical expense, the amount of the distribution will be included in your annual income and there will be a 20% additional tax assessed unless you become disabled or die, or if you are 65 or older. There would be no 20% additional tax for those over age 65.

9 Using your HSA dollars is as easy as using your debit or credit card. (Review slide) 9

10 Participating in a Health Savings Account does require that an employee file the IRS Form 8889 in order to determine your deduction. Whether you participate in an HSA offered through the district or your spouse s plan, the IRS requirements are the same. The information you need to complete this form will be provided by Associated Bank, who will be administering your HSA. You can then use this to complete your taxes or you can provide this to your tax advisor if you are having your taxes completed through them. 10

11 Employees should also keep a copy of all receipts for HSA distributions with your tax records. Although audits are rare, you will be responsible to account for these funds. 11

12 The Wausau School District will be contributing to your HSA account if you choose this plan option. The contribution amount will be based on the percentage that you pay toward your medical benefit premium. So for example, if you are a full time employee, WSD will contribute $1000 for a single plan or $2000 for a family plan to your HSA account. These contributions will be distributed quarterly. And keep in mind as the employee premium costs increase for the various levels, the HSA contribution decreases... but these employees will be saving more in the long run through Premium cost savings. This will be illustrated in upcoming slides. 12

13 The plan option you choose may determine your premium contribution amount. Each employee should refer to the WSD Employee Handbook under the Wage and Benefit Supplement for their position to determine their contribution percentage. For those electing the _HSA plan, there have been some changes to help employees who are not full time and choose a single plan, to still keep health insurance offerings affordable according to the Affordable Care Act (ACA). After the employee contribution is determined, the district will cover the remaining premium expense. 13

14 This example illustrates the total cost of the health plan premium, the amount you contribute toward the premium, your annual cost, and the savings for you if the HDHP is chosen. Please note premium amounts will vary by employee group 14

15 Here you can see the overall impact for employees for each plan option, with the out of pocket maximums included, the HSA deposits from WSD, and the additional savings for the HDHP option. Please note, The Out of Pocket maximum includes, the deductible, coinsurance and any copayments you would pay. The amount shown here for the Traditional plan shows the deductible only, as it would not be possible to know the exact amount of coinsurance and copayments that may be applied for each employee. Any coinsurance and copayment amounts would be your responsibility up to the maximum of $6,350 for single and $12,700 for family. Also, key to remember with this illustration is that any amounts paid by you over the deductible amount for the Traditional plan would be additional savings if you were to choose the HDHP. 15

16 Although a HDHP may seem a little more complicated at first, we d like to show you how you can manage this effectively and realize the savings from choosing this type of plan. A teacher with single coverage would save approximately $19 per month. Combining the savings of the HDHP plan along with the $1,000 contribution to the HSA from WSD, if you were to deposit that savings per month into your HSA, you would have the majority of what you need to cover your deductible for the year. This example assumes that you would have enough services to reach the deductible. If you have a year without many services needed, the remaining funds in your HSA will roll over into the following year. If this is the case, you would have the advantage of building up your HSA account for future use, or not contributing as much to the account for that following year. Also important to note is that unlike a Flexible Savings Account, your employee contributions to an HSA can be changed throughout the year. If you decide you would like to increase or decrease your contribution, you are allowed to make changes per the banking institution guidelines. 16

17 This illustration shows the contributions for a family coverage plan. For a FTE with the $2000 HSA funding from WSD, and a total savings of $54 per month on the premium for this plan, an employee with family coverage could deposit $50 per month into his or her HSA and have enough to meet the family deductible of $2600 for the year. And again, this example assumes that you would have enough services to reach the deductible and any remaining funds in your HSA would roll over into the following year. Although the premium savings is not a large amount in moving to the HDHP, it s important to realize that any HSA funds not used during the year will roll over year after year, and is the employee s money to keep. 17

18 This example illustrates the total cost of the health plan premium for a part-time employee, the amount you contribute toward the premium, your annual cost, and the savings for you if the HDHP is chosen. Please note there is a greater premium savings for part-time employees choosing the HSA plan. 18

19 Here you can see the overall impact for part-time employees for each plan option, with the out of pocket maximums included, the HSA deposits from WSD, and the additional savings for the HDHP option. Please note, The Out of Pocket maximum includes, the deductible, coinsurance and any copayments you would pay. The amount shown here for the Traditional plan shows the deductible only, as it would not be possible to know the exact amount of coinsurance and copayments that may be applied for each employee. Any coinsurance and copayment amounts would be your responsibility up to the maximum of $6,350 for single and $12,700 for family. Also, key to remember with this illustration is that any amounts paid by you over the deductible amount for the Traditional plan would be additional savings if you were to choose the HDHP. 19

20 A HDHP can also be attractive for a part time employee with the opportunity for savings in choosing this type of plan. An employee with single coverage would save approximately $27 per month. Combining the savings of the HDHP plan along with the contribution to the HSA from WSD, if you were to deposit that savings per month into your HSA, you would have the majority of what you need to cover your deductible for the year. This example assumes that you would have enough services to reach the deductible. If you have a year without many services needed, the remaining funds in your HSA will roll over into the following year. If this is the case, you would have the advantage of building up your HSA account for future use, or not contributing as much to the account for that following year. 20

21 This illustration shows the contributions for a family coverage plan. For a PTE with the $1,700 HSA funding from WSD, and a total savings of $77 per month on the premium for this plan, an employee with family coverage could deposit $75 per month into their HSA and have enough to reach the family deductible of $2600 for the year. And again, this example assumes that you would have enough services to reach the deductible and any remaining funds in your HSA would roll over into the following year. Although the premium savings is not a large amount in moving to the HDHP, it s important to realize that any HSA funds not used during the year will roll over year after year, and are the employees funds to keep. 21

22 The Wausau School District is partnering with Associated Bank to administer your Health Saving Accounts. Review slide.. 22

23 The Wausau School District wants to help you determine which plan option is best for you. You will be receiving an from the district that will include an Excel spreadsheet Plan Comparison and Savings Calculator as an attachment and a link to a screencast demonstrating the use of this tool. You will be able to enter your employee group, your specific premium contribution percentages, your anticipated out of pocket expenses included in the deductible, and expenses outside the deductible, to help you in making your plan option choice. 23

24 Thank you for joining us to today to learn about the new WSD Insurance plan options beginning January Please contact your Human Resources department, or M3 Insurance for any questions. We re here to help. 24