NationalONE $2600-100% The High Deductible Health Plan (HDHP) and Health Savings Account (HSA) July 1, 2017
2 District 622 Health Plan Offerings In-Network Benefits Available to: Deductible Medical Out-of-pocket Maximum Prescription Out-ofpocket Maximum NationalOne $200-$25 All groups $200 individual $600 family $500 individual $1,000 family $500 per person $750 per family NationalOne $2600-100% HSA Clerical, Education Assistants, Local 70, Non Units, Paraprofessionals, Principals $2,600 individual $5,200 family $2,600 individual $5,200 family Combined with Medical Out-of-Pocket Maximum Lifetime maximum Unlimited Unlimited Preventive health care 100% coverage 100% coverage Office Visits Urgent Care Convenience Clinics (Retail Clinics) $25 copay $0 copay 100% coverage after deductible 100% coverage after deductible Preferred Benefits based on completion of Wellness incentive Provider network and drug formulary the same for all plans
3 District 622 Health Plan Offerings In-Network Benefits Inpatient, Outpatient hospital, Ambulance NationalOne $200-$25 100% after deductible NationalOne $2600-100% HSA 100% after deductible Emergency Room $75 copay 100% after deductible Durable medical equipment Home health care Retail pharmacy: -- Generic preferred -- Brand preferred -- Non-preferred 100% after deductible 80% after deductible 34 day supply/100 units $8 copay $16 copay $32 copay 100% after deductible 100% after deductible 31 day supply 100% after deductible Mail order pharmacy 2 copays for a 90 day supply 100% after deductible Preferred Benefits based on completion of Wellness incentive Provider network and drug formulary the same for all plans
4 How does it work? High Deductible Plan with a Reimbursement Account (HSA) 1. You seek medical care, your provider submits the charges to HealthPartners. 2. HealthPartners processes the claim, applies their discount and sends Explanation of Benefits to provider and you. 4. You pay the doctor using provided checks or SelectAccount debit card. 3. Provider sends you bill for amount you owe.
HSA Overview Clerical, Education Assistants, Non-Unit, Paraprofessionals, Principals 5 What is a Health Savings Account (HSA)? Financial account that is owned by an individual Associated with a High Deductible Health Plan (HDHP) Contributions to the account are to pay for current and future medical expenses No use it or lose it, unused funds rollover Interest earned is tax free Investment opportunities Portable Beneficiary can be named to account Post age 65 non-medical distributions without penalty
HSA Employee Advantages 6 Control over the account Ability to contribute tax free $ to HSA account 2017: single $3,400, family $6,750 Catch up (age 55+ ) $1,000 Rollover provides opportunity to save for future health care expenses Tax-exempt withdrawals for qualified medical expenses not covered by the health plan Interest and earnings grow tax free w/ investment opportunities Portability Post 65 non-medical withdraws This is the employee s account and the entire balance belongs to the employee, regardless of your present or future employment and/or who deposited the funds.
Using your account We make it easy to access your funds Debit Card File a claim online, fax or mail Direct deposit
Debit Card Gives you choice Smart Card Accepted everywhere Visa is accepted No ATM access No Fees for Debit Card Spouse or additional cards for no cost
Online Member Service Center Managing your account is easy with www.selectaccount.com Register with the site to: View your account 24/7 via PC, Tablet or mobile phone Request reimbursement for out of pocket expenses Check balance Make HSA Contributions View account activity Request additional debit cards, add/change beneficiaries, manage investment funds
Keep all of your receipts in one place Manage your health care receipts for future reimbursement Electronic document storage Easy-to-use Eliminates fading receipts No more bulky storage hassles Organize receipts View balance of unreimbursed receipts Peace of mind
Member Mobile More than an App, full website enabled experience from any mobile device View your account 24/7 via PC, Tablet or mobile phone Request reimbursement for out of pocket expenses Check balance Make HSA Contributions View account activity Request additional debit cards Manage investment funds
1 2 We re here to help Our expert, friendly service team is here to answer your questions 1.800.859.2144 651.662.5065 Monday thru Friday 7 a.m. to 8 p.m. CST www.selectaccount.com Your Online Member Service Center
13 Who is Eligible for an HSA? Anyone who is: Covered by the High Deductible Health Plan, NationalONE $2600-100% Not enrolled in Medicare Not covered under other health insurance* Cannot be covered by any other health insurance that reimburses you for health expenses you incur, unless it is another HSA-qualified HDHP. Not another person s tax dependent *Other health insurance does not include: specific disease or illness insurance, accident, disability, dental care, vision care and long-term care insurance
Eligibility Scenarios -- Acceptable Situations: Single employee enrolled in HDHP no medical flex no HRA/VEBA limited medical flex limited HRA/VEBA suspended HRA/VEBA not on Medicare Married employee enrolled in HDHP not enrolled in spouse s medical plan spouse doesn t have a traditional medical flex spouse doesn t have an HRA/VEBA spouse has an HRA/VEBA that is limited to spouse s expenses limited HRA/VEBA suspended HRA/VEBA not enrolled in Medicare Spend Down Approach: Employee elects HDHP and wishes to spend down their HRA/VEBA balance. The first of the month following when the VEBA balance is $0, the participant could establish an HSA account, assuming they are not enrolled in the traditional flex plan or have any other coverage that would make them ineligible for an HSA account.
Eligibility Scenarios -- Problem Situations: Some scenarios Single employee enrolled in non HDHP, doesn t suspend or limit existing VEBA Gets married, want to enroll in HDHP and HSA. Can t start HSA as long as HRA/VEBA has funds remaining or until next plan year when the HRA/VEBA can be limited or suspended Single employee enrolled in non HDHP, doesn t have HRA/VEBA, but elects traditional medical flex Gets married, want to enroll in HDHP and HSA. Can t start HSA until next flex plan as flex creates HSA ineligibility Married employee enrolled in non HDHP, doesn t suspend or limit existing HRA/VEBA Wishes to enroll in HDHP and HSA due to spouse plan change/cost. Can t start HSA as long as HRA/VEBA has funds remaining or until next plan year when the HRA/VEBA can be limited or suspended Married employee enrolled in non HDHP, doesn t have VEBA, but elects traditional medical flex Wishes to enroll in HDHP and HSA due to spouse plan change/cost. Can t start HSA until next flex plan as flex creates HSA ineligibility
16 Distribution Rules Distributions are tax-free if they are taken for qualified medical expenses Accounts can only be used for expenses that are incurred on or after the date the account was established Funds can be used for expenses from a prior year, as long as the expenses incurred on or after the date the account was established Distributions can be taken for qualified medical expenses for the following people: The account holder (employee covered by the HDHP) Spouse of account holder (even if not covered by the HDHP) Dependent Children HSA: Tax Dependents of that individual For individuals age 65 and older, HSA distributions can be used for non-qualified medical expenses without facing the 20 percent penalty However, income taxes will apply for non-medical distributions This rule is regardless of whether the individual is enrolled in Medicare
Qualified Medical Expenses 17 The IRS defines expenses that are considered qualified medical expenses for HSA distributions Expenses must be primarily to treat or prevent a physical or mental defect or illness If you use HSA funds for expenses beyond what the IRS defines as qualified, you will be subject to income tax on the distribution and an additional 20 percent penalty Examples of qualified medical expenses: Most medical care that is subject to your deductible (copays, coinsurance, doctor visits, inpatient or outpatient treatment, etc.) Prescription drugs Over-the-counter drugs, only if you obtain a prescription Insulin (with or without a prescription) Dental and vision care Select insurance premiums COBRA, qualified long-term care insurance, health insurance premiums paid while receiving unemployment benefits, health insurance after you turn 65 except for a Medicare supplemental policy Examples of not considered qualified medical expenses : Insurance premiums (other than the exceptions listed above) Over-the-counter drugs (unless a prescription is retained from a physician insulin is an exception) Cosmetic procedures such as teeth whitening A full list of qualified medical expenses is available at www.selectaccount.com or from the Benefits office
Which plan is a good fit for me? 18 For the high deductible examples, the assumption is that average office visit costs $110 Remember: Routine Preventative Physicals are covered 100% under all plans 200-25 Plan has a prescription copay of $8 generic preferred, $16 brand preferred and $32 non preferred; an office visit copay of $25 and a $200 per person deductible (maximum of $600 per family). The HSA plan has a deductible of $2,600 per person and a maximum of $5,200 per family. Assuming Preferred Benefits resulting from completed of the Wellness Incentive Program
HSA Contribution Clerical, Education Assistants, Non-Unit, Paraprofessionals, Principals--HSA $2600-100% 19 Where applicable, effective July 1, 2017 District Contributions to the HSA will be the surplus of the District Contribution compared to the health plan premium. Please note for full-time Clerical, Driver/Custodians, Non- Units and Principals contributions are made each paycheck July through June; 24 paychecks. For all other groups, contributions are made each paycheck October through May; 16 paychecks. District Contribution to the HSA (monthly) Employee Group Family Single Clerical-10 mo, Hired before 8/7/92 $143.48 $108.33 Clerical-10 mo, Hired after 8/7/92 $0.00 $108.33 Clerical-11 mo, Hired before 8/7/92 $143.48 $108.33 Clerical-11 mo, Hired after 8/7/92 $0.00 $108.33 Clerical-12 mo $143.48 $108.33 Driver/Custodian-12 mo full-time $143.48 $108.37 Driver/Custodian-10 mo full-time, 12 mo part-time $0.00 $108.37 Ed. Asst, Hired before 7/1/90 $0.00 $39.95 Ed. Asst., Hired after 7/1/90 $0.00 $39.95 Non-Units-Family Cap $143.48 $108.33 Non-Units-Single Cap $0.00 $108.33 Paraprofessional, Hired before 08/31/98 $0.00 $72.31 Paraprofessional, Hired after 08/31/98 $0.00 $72.31 Principals $143.48 $108.33
HSA Contribution 20 Each year, the IRS sets contribution limits These limits are for the total funds contributed, including company contributions, your contributions and any other contributions You are allowed to contribute the entire year s limit whenever you first become eligible for the HSA (even if that is in December) However, you must remain eligible for at least 12 months after that date, or you will be subject to taxes and penalties on the amount you contributed For individuals ages 55 and older, the IRS allows additional catch-up contributions Eligible individuals may contribute an extra $1,000 for the year (for 2017) 2017 Individual $3,400 Family $6,750
Scenario 1: Low Healthcare User-Single HDHP HSA (Clerical, EA, Local 70, Non Units, Paraprofessionals, Principals) Maggie is a single, healthy female who takes advantage of preventive care visits. In a typical year, she usually sees the doctor twice. She has a preferred brand prescription for Singulair that costs $120 (retail) and is filled twice per year. 21 200-25 Plan 2600/5200 HSA Plan ($1,299 District Contribution to HSA) *Annual premiums $663 $0^ Office visits $50 $220 *Annual premiums based on groups with highest District contribution. ^The HSA premiums will vary based on individual contribution to the HSA account (the higher contribution the higher health premium) Rx drugs $32 $240 Total estimated maximum costs Reimbursable expenses in HSA Cost after HSA reimbursement $745 $460 n/a $460 $745 $0 HSA Balance n/a $839 ($1,299-$460)
22 Carol s family includes two children under the age of 6 and her husband. During the year there are a total of 15 visits to the doctor and 2 prescriptions per month between all the family members. The prescriptions filled included 12 preferred generic and 12 preferred brand ($1,500 total retail cost). 200-25 Plan 2600/5200 HSA Plan ($1,721 District Contribution to HSA, assumes $0 by employee) *Annual premiums $3,517 $0^ Office visits $375 $1,650 *Annual premiums based on groups with highest District contribution. ^The HSA premiums will vary based on individual contribution to the HSA account (the higher contribution the higher health premium) Rx drugs $288 $1,500 Total estimated maximum costs Reimbursable expenses in HSA Cost after HSA reimbursement $4,180 $3,150 n/a $3,150 ($3,150 is reimbursable, but $1,721 annual trust amount) $4,180 $1,429 ($3,150-$1,721) HSA Balance n/a $0
Recordkeeping Whenever you use HSA funds to pay for a medical expense, you should keep your receipt You are responsible for demonstrating to the IRS that HSA distributions were for qualified medical expenses If the IRS requests receipts for verification purposes, failure to provide those receipts could result in having to pay a penalty 23 IRS Forms sent by SelectAccount IRS Form 1099-SA Provides the total amount distributed from your HSA in prior year. This form will be mailed to you by January 31, and reported to the IRS by February 28. Do not attach Form 1099-SA to your income tax return. Instead, keep it for your records. IRS Form 5498-SA Provides the total amount of contributions credited to your HSA for prior year. Rollover amounts and year-end fair market values also are reported on this form. This form will be mailed to you after April 15, to allow you time to apply additional contributions to your HSA for prior year. It will be mailed by May 31, and a copy will be sent to the IRS on your behalf. Do not attach Form 5498-SA to your income tax return. Instead, keep it for your records.
24 IRS Forms sent by SelectAccount IRS Form 1099-SA Provides the total amount distributed from your HSA in prior year. This form will be mailed to you by January 31, and reported to the IRS by February 28. Do not attach Form 1099-SA to your income tax return. Instead, keep it for your records. IRS Form 5498-SA Provides the total amount of contributions credited to your HSA for prior year. Rollover amounts and yearend fair market values also are reported on this form. This form will be mailed to you after April 15, to allow you time to apply additional contributions to your HSA for prior year. It will be mailed by May 31, and a copy will be sent to the IRS on your behalf. Do not attach Form 5498-SA to your income tax return. Instead, keep it for your records.