2015 Health care options. Introduction to Healthy Savings Plan Options

Transcription

1 2015 Health care options Introduction to Healthy Savings Plan Options

2 Agenda Health care plan options for 2015 Basics How they work Medical savings accounts Introduction to ConnectYourCare Open enrollment Questions 2

3 Action required for open enrollment For coverage you must go to the web and enroll If you don t enroll, your medical/prescription & dental/vision will be waived 3

4 Abbreviations HDHP High Deductible Health Plan HSA Health Savings Account FSA Flexible Spending Account LPFSA Limited Purpose Flexible Savings Account DCFSA Dependent Care Flexible Spending Account CYC - ConnectYourCare 4

5 2015 Health Care Plan Options Traditional Plan Option Healthy Savings Plan Option 1 (Funded) Healthy Savings Plan Option 2 (Unfunded) 5

6 Know your cost Hormel Foods employees and family spend less than $1,000 out-of-pocket annually! 6

7 2015 Health Care Plan Options Traditional Plan Option This plan is the previous low deductible offering. With this plan you may enroll in the health care flexible spending account (FSA). Advantages include: Meet your deductible sooner Tax advantages with the FSA. 7

8 2015 Health Care Plan Options Healthy Savings Plan Options 1 & 2 High-deductible health plans (HDHP) Health savings account (HSA) Limited purpose flexible spending account (LPFSA) Advantages include: Lower contributions Tax advantages More control over your health care costs Opportunity to save money Company contribution to Option 1 to help offset deductible 8

9 Why offer a HDHP & HSA Why is Hormel Foods offering this Help save for health care in retirement Flexibility and choice on how your money is spent HSA funds are yours to keep and move with you Use for current or future expenses Lower weekly contributions HSA tax-free opportunity 9

10 HDHP Deductible difference Under a HDHP, prescription drugs must be subject to the same deductible and out-of-pocket maximum as medical services. Some preventive drugs, such as birth control and prescribed prenatal vitamins, are not subject to the deductible. Family coverage employee and dependents must meet the combined family deductible before coinsurance applies. 10

11 Agenda Health care plan options for 2015 Basics How they work Medical savings accounts Introduction to ConnectYourCare Open enrollment Questions 11

12 Preventive Care HDHP and Traditional All in-network preventive care is 100 % covered and no deductible or coinsurance is required. 12

13 How the Traditional Plan Option works Deductible (Medical Only) Co-Insurance (Medical Only) Maximum Out of Pocket (Medical Only) Co-Insurance (Prescription Only) Maximum Out of Pocket (Prescription Only) 13

14 How a HDHP plan works Deductible (Medical & Prescription) Co-Insurance (Medical & Prescription) Maximum Out of Pocket (Medical & Prescription) 14

15 In-Network Plan Comparison Deductible Single Deductible Family Deductible Healthy Savings Plan Healthy Savings Plan Traditional Plan Option 1 Option 2 Option $1,500 $2,000 $500 $3,000 $4,000 $1,500 MAX Any combination of employee and dependents Any combination of employee and dependents (Dependents $500 each or $1000 combined) + (Employee $500 Deductible) Copay/Coinsurance Prescription After deductible, you pay After deductible, you pay 10%/20%/35% with $5 minimum Drug 20%; plan 80% 20%; plan 80% Emergency After deductible, you pay After deductible, you pay After $100 Copay and deductible, Room 20%; plan 80% 20%; plan 80% you pay 20%; plan 80% OOP (Out of Pocket) Maximum All Plans pay 100% once OOP is reached Single Medical $4,000 $4,000 $3,000 Family Medical $8,000 $8,000 $6,500 Single Drug Included in Medical OOP Included in Medical OOP $1,500 Family Drug Included in Medical OOP Included in Medical OOP $3,000

16 Pre-Tax Contribution Options In Network Plan Healthy Savings Plan Healthy Savings Plan Traditional Plan Comparisons Option 1 Option 2 Option Company Contribution Single $500 $0 NA to HSA Family $1000 $0 NA Your optional pre-tax Single: $0 to $2,850 Single: $0 to $3,350 NA contribution to HSA Family: $0 to $5,650 Family: $0 to $6,650 You may contribute an extra $1,000 if you are age 55 or older during calendar year You may contribute an extra $1,000 if you are age 55 or older during calendar year FSA or LPFSA $2,500 $2,500 $2,500 Dental/Vision expenses Dental/Vision expenses only only DCFSA $5,000 $5,000 $5,000

17 Meet Ben Single (Tier 1) Light health care user. Annual preventive exam Fills several prescriptions for seasonal allergies. Ben s expenses for the year are shown in the table to the right. These prices reflect negotiated innetwork pricing through the BCBS provider network. Services 17 Cost Preventive annual exam $500 Medical expenses Office visit $150 Prescription Expenses Generic (four) $360 Total Expenses $1,010

18 Meet Ben (continued) Expense Healthy Savings Plan Option 1 (Single ded. $1,500) Healthy Savings Plan Option 2 (Single ded. $2,000) Traditional Option (Single ded. $500) Covered at 100% Preventive care Ben pays: $0 Plan pays: $500 Prescription drugs Four generic prescriptions Ben pays: $360 ($90 x 4) Plan pays: $0 Ben pays: $0 Plan pays: $500 Ben pays: $360 ($90 x 4) Plan pays: $0 Ben pays: $0 Plan pays: $500 Ben pays: $36 10 % = ($9 x 4) Plan pays: $324 Ben s expenses go towards his deductible Medical expenses (non-preventive) Ben pays: $150 Plan pays: $0 Ben pays: $150 Plan pays: $0 Ben pays: $150 Plan pays: $0 Ben Paid $510 $510 $186 Plan Paid $500 $500 $824 (Company) Total Paid $1,010 $1,010 $1,010 18

19 Meet Ben (continued) Healthy Savings Plan Option 1 (Single ded. $1,500) Healthy Savings Plan Option 2 (Single ded. $2,000) Traditional Option (Single ded. $500) Ben s weekly contributions Ben pays: $1,248 ($24 x 52 weeks) Ben pays: $572 ($11 x 52 weeks) Ben pays: $1,612 ($31 x 52 weeks) Ben s Out-of-pocket Company HSA Contribution $510 $510 $186 ($500) Ben s Total Cost $1,258 $1,082 $1,798 19

20 Meet Carla Married to Matt 3 children (one a recent baby) Family coverage (Tier I) Birth during the year. 2 older children had minor illnesses throughout the year and incurred office visits (two each) and prescription costs. Matt went to the emergency room once during the year. Carla s expenses for the year are shown in the table to the right. These prices reflect negotiated innetwork pricing through the BCBS provider network. Services Cost Preventive care vaccines $100 Medical expenses - Carla Hospital and delivery $7,500 Other medical expenses Office visits (four) Emergency room Prescription Expenses Generic (four for children and three for Carla) $600 $1,100 $315 Total Expenses $9,615 20

21 Meet Carla (continued) Expense Healthy Savings Plan Option 1 (Family Ded. - $3,000) Healthy Savings Plan Option 2 (Family Ded. - $4,000) Traditional Option (Family Ded. - $1,500) Covered at 100% Preventive care - vaccines Carla pays: $0 Plan pays: $100 Carla pays: $0 Plan pays: $100 Carla pays: $0 Plan pays: $100 Prescription drugs Seven generic prescriptions Carla pays: $315 ($45 x 7) Plan pays: $0 Carla pays: $315 ($45 x 7) Plan pays: $0 Carla pays: $35 ($5 minimum x 7) Plan pays: $280 Carla meets her deductible under all plan options Medical expenses (non-preventive) Carla pays: $3,988 ($2,685 remaining family deductible + $1,303 co-insurance) Plan pays: $5,212 Carla pays: $4,788 ($3,685 remaining family deductible + $1,103 co-insurance) Plan pays: $4,412 Carla pays: $3,040 For Carla: $1,900 ($500 deductible + $1,400 co-insurance) For children/husband: $1,140 ($1,000 deductibles + $140 co-insurance) Plan pays: $6,160 Carla Paid $4,303 $5,103 $3,075 Plan Paid (Company) $5,312 $4,512 $6,540 Total Paid $9,615 $9,615 $9,615 21

22 Meet Carla (continued) Healthy Savings Plan Option 1 (Family Ded. - $3,000) Healthy Savings Plan Option 2 (Family Ded. - $4,000) Traditional Option (Family Ded. - $1,500) Carla's weekly contributions Carla s Out-of-pocket Company HSA Contribution Carla pays: $3,380 ($65 x 52 weeks) Carla pays: $1,508 ($29 x 52 weeks) Carla pays: $4,212 ($81 x 52 weeks) $4,303 $5,103 $3,075 ($1,000) N/A N/A Carla s Total Cost $6,683 $6,611 $7,287 22

23 Agenda Health care plan options for 2015 Basics How they work Medical savings accounts Introduction to ConnectYourCare Open enrollment Questions 23

24 2015 Plan options Healthy Savings LPFSA HSA Health care for 2015 Traditional FSA 24

25 HSA Overview Advantages Savings vehicle for medical expenses Triple tax savings Interest / Investments Flexible Multiple uses Easy Access Yours to keep Save for retirement Change contribution anytime 25

26 HSA Eligibility Cannot contribute to HSA if: Any Veteran s Administration health benefits in the last 3 months Claimed as a dependent on someone else s 2014 tax return Health Reimbursement Arrangement (HRA) Non qualified HDHP Flexible Spending Account (FSA) Enrolled in Medicare 26

27 Your HSA is a triple tax-free account. Health Savings Accounts (HSAs) can help you shoulder rising out-of-pocket medical costs. Grows tax free Pre-tax deferred Withdrawal tax free 27

28 Taxes You will not owe taxes or penalties on any HSA distributions (money you used) for qualified medical expenses. If you used HSA funds for non-qualified medical expenses, you must pay income tax and may have to also pay an additional 20% tax on those distributions. 28

29 IRS Limits IRS Maximum limits for 2015 are $3,350 for individual coverage and $6,650 for family coverage. Include both employer and employee contributions. $1,000 catch-up contributions option for employees age 55 and older. 29

30 Savings with a FSA & HSA These expenses can be paid with tax-free dollars and save you up to 30%, depending on your tax bracket. With FSA or HSA 30 Without Annual pay $35,000 $35,000 Pre-tax contribution to FSA or HSA -$1,500 -$0 Taxable income =$33,500 =$35,000 Federal income & Social Security taxes -$7,362 -$7,852 After-tax dollars spend on eligible expenses -$0 -$1,500 Spendable Income =$26,138 =$25,648 Savings with FSA or HSA $490 $0

31 Savings that really add up Say you contribute $3,000 to your HSA each year until retirement. Assuming you use $1,500 a year for medical expenses, earn 8% a year in interest and investments, and reinvest all earnings, your savings can really add up. Starting Age HSA Value at age $651, $271, $103, $ 31,000 31

32 HSA have 2 types of users Spenders Contribute the amount they plan to use in a given year Budget and save on OOP cost Company contributions can help meet deductible Direct premium savings to HSA Don t skip preventive care its free Savers Contribute the maximum amount they can afford but pay for qualified expenses out of pocket Use the HSA as an additional retirement savings vehicle Maintain a tax shelter Building a health care nest egg 32

33 Limited Purpose FSA What does Limited Purpose mean? Only dental and vision expenses - $2,500 per year - Able to pair with HSA to save more money - Tax advantage HDHP HSA LPFSA 33

34 Weekly contributions < $75,000 Based one employee earnings Coverage Level Traditional Plan Option Healthy Savings Plan Option 1 (Funded) Healthy Savings Plan Option 2 (Unfunded) Single $ 31 $ 24 $ 11 EE + Children $ 46 $ 39 $ 18 EE + Spouse $ 70 $ 54 $ 24 Family $ 81 $ 65 $ 29 Wellness program deductions are in addition to the contributions listed above. 34

35 Weekly contributions $75,000 - $149,999 Coverage Level Traditional Plan Option Healthy Savings Plan Option 1 (Funded) Healthy Savings Plan Option 2 (Unfunded) Single $ 36 $ 30 $ 17 EE + Children $ 54 $ 49 $ 28 EE + Spouse $ 82 $ 68 $ 39 Family $ 94 $ 82 $ 47 35

36 Weekly contributions >$150,000 Coverage Level Traditional Plan Option Healthy Savings Plan Option 1 (Funded) Healthy Savings Plan Option 2 (Unfunded) Single $ 40 $ 35 $ 22 EE + Children $ 61 $ 57 $ 36 EE + Spouse $ 93 $ 79 $ 50 Family $106 $ 97 $ 61 36

37 Plan Comparison Tool CYC / Pivot Website Available online in September 2014 Each 2015 plan feature will be pre-loaded into the tool You will need to input your estimated costs You will be notified when the tool is available Be Prepared and Know Your Medical Spending Average annual total medical cost (Remember to exclude preventive) Average annual Rx cost Average annual dental/vision costs Future planned expenses (pregnancy, surgery, etc )

38 Know your medical spending Determine your typical annual medical expenses: 1) Go to the BCBS website 2) Login/register for your account 3) Search by: A. PAST claims: Date Cost EOB (explanation of benefits) B. FUTURE costs Find a Doctor tool - compare costs and quality of 300+ procedures. 38

39 Know your prescription spending Determine your typical prescription expenses: 1) Go to the PRIME website 2) Login/register for your account 3) Search by: A. PAST claims: Date click on medicine for details B. FUTURE costs Find Medicine tool - compare costs and pharmacies. 39

40 Agenda Health care plan options for 2015 Basics How they work Medical savings accounts Introduction to ConnectYourCare Open enrollment Questions 40

41 Why ConnectYourCare? Connect Offers HSA, FSA, LPFSA, DCFSA Online Claims Submission & Processing Your 24x7 Customer Service Health Care Payment card Care Direct Deposit Reimbursement HSA On-Demand 41

42 HSA On Demand HSA On Demand allows you access to your full annual election amount. Access is available on the first day of your eligibility. Immediate Need, Immediate Funds Interest Free Advance Easy to Track 42

43 CYC Health Care Payment Card Approved merchants Dr. offices, vision centers, pharmacies Quick Access to your funds FSA LPFSA HSA 43

44 CYC Mobile Access on the go View : Account balances Transaction history Claims details FAQs Receive Important account alerts Take a photo of your receipt and upload it directly to the system Submit a new claim Available for Android, iphone and Windows Phones 44

45 HSA Interest Earnings HSA Bank provides Competitive interest rates Credited each month based on account balance Daily Balance Interest Rate APY $25,000 or more 1.49% 1.50% $15, $24, % 1.50% $10, $14, % 1.50% $5, $9, % 0.25% $2, $4, % 0.15% Less Than $2, % 0.10% Investment options TD Ameritrade Brokerage Option DEVENIR Mutual Fund Selection Option 45

46 CYC File cabinet Claims can be filed away Funds allowed to be used today or be saved for future expenses HSA owned by you and 100% vested from day one HSA goes with you if you change jobs or health plans. HSA use for retirement health care expenses and post 65 Medicare premiums 46

47 CYC - FSA If you have a FSA, you can pay for medical, prescription, dental, or vision expenses. Minimum of $52 Maximum of $2,500 CYC will be the provider as of 1/1/

48 FSA & LPFSA- Rollover Balances up to $500 will rollover each year as long as the employee elects the coverage for the following year. In 2015 the balances that are $500 or less from 2014 will be added to the accounts on March 31,

49 CYC - Dependent Care FSA Pre-tax money for eligible dependent day care expenses so you and /or your spouse can work, look for work, or attend school full-time. - Child care for under age 13 at a day camp, nursery school or private sitter - Before and after school care - Care of an incapacitated adult $52 -$5,000 per year Funds must be in the account to be reimbursed CYC will be the provider as of 1/1/

50 Where do I go for more information? Pivot > HR/Benefits>Employee Benefits 50

51 Agenda Health care plan options for 2015 Basics How they work Medical savings accounts Introduction to ConnectYourCare Open enrollment Questions 51

52 Open Enrollment timeline for 2015 Information mailed: Third week of September Web open to make elections: October 2-15 Confirmations mailed: Last week in October Web reopens for any changes: November nd confirmations: Last week in November Review confirmation Statements carefully! Elections are final. 52

53 After you have made your enrollment choice If you change your health care plan you will receive new cards from BCBS, Prime, Delta Dental during the last week of December. Enrollment guide from CYC for the following plans: HSA LPFSA FSA DCFSA Mailed out the last week in December from CYC Instructions for signing up on line for: Account Direct Deposit Health payment card 53

54 Action required for open enrollment For coverage you must go to the web and enroll. If you don t enroll, your medical/prescription & dental/vision will be waived. You will NOT have coverage in 2015! 54

55 Questions?????? 55