Your Health Benefits 2016 Open Enrollment October 2015
So why are we here? Sneak Peak for 2016 Open Enrollment No major plan changes this year Minor feature changes Focus on Health Investment Plan Education Many employees are STILLmissing a significant retirement savings opportunity 75% vs. 23% New tools and resources to assist Check step to maximize HSA savings Upcoming changes for the 401k plan
What we are going to cover: 2016 Open Enrollment Updates What is the Health Investment Plan again? Why is this important to Teradyne & our employees? Why should you consider having an Health Savings Account? Real life Scenarios What do you need to consider? Resources to make the decision and transition easier Questions?
2016 Open Enrollment Updates Medical Changes Overall, the cost trend is flat across all plans Slight changes in premiums depending on plan experience Health Investment Plan Embedded per member Out-of-Pocket Maximums: $3,350 Family: $ 6,750 Maintenance medication not subject to deductible. Introduction of Castlight Tool for managing medical costs Dental 6.5% Increase Enhancement: Implant coverage revised to be more inclusive 50% up to the max Vision No increase and enhancement for separate contact fitting allowance and antireflective lenses coating. Supplemental Life Insurance moving to age banded rates 401k Fund line up & Fee Changes See schedule for upcoming meetings
What do we offer for BCBS Medical Plans? Advantage EPO - 0.7% increase Highest premiums In network only Co-pay model 63% 23% 14% HIP PPO EPO Preferred PPO - 2.6% increase In-network and out-of-network coverage Co-insurance model Health Investment Plan (HIP) w/hsa - 5.2% decrease
Let us re-introduce you to: Teradyne Health Investment Plan with a Health Savings Account (HSA) 1. Learn 2. Assess 3. Compare 4. Plan
Join the wave! From the Corner HR Office This year I am encouraging you to consider joining the wave. The wave consists of Teradyne employees who have switched to the Health Investment Plan for their health insurance coverage. This is the plan which features much lower monthly premiums out of your paycheck, and substantial annual company contributions into a tax-deferred long term Health Savings Account you own for life. In return, you accept higher deductibles. When it all nets out, we know based on actual claims data that more than 75% of our employees would be better off financially in this plan. It s really the wave of the future for health plans in the United States, as well as at Teradyne. After a major communications and education push last year, enrollment doubled in this plan. Plan participants new and old are giving it quite positive reviews, almost all of whom are planning to stay in the plan for 2016. I plan to re-enroll in the plan for my sixth consecutive year. I highly encourage you to give this plan serious consideration. There are easy to use tools available for you to review your past medical claims data, or model hypothetical health situations, and see how much you would pay in this plan versus your current plan. Also, please attend one of the employee information sessions coming soon to your site or via webex. You will be glad you did. On a related note, we are making several changes to the fund line up and fee structure for the 401k plan in November which I am confident you will find advantageous. Please read the employee announcements and check out the Brainshark on the Open Enrollment website highlighting this change or feel free to contact the HR Service Center with any questions. Regards, Steve Fagerquist Vice President, Human Resources
LEARN Why the big pushagain this year? We ALLown the cost of health care Health care costs continue to drive significant cost ~$20M per year Current Health Investment Plan enrollment is 23% (compared to the market +30%) up from 8% last year Remove lack of understanding as a barrier to enrollment in the Health Investment Plan
LEARN Why should you consider the Health Investment Plan? Over 75% of our employees would have been financially better off in the Health Investment Plan An HSA really needs to be considered as part of your overall retirement strategy Projected $220,000 medical expenses in retirement The MOST tax advantaged savings vehicle There are significant resources to assist you and educate you about the rules of the plan You re missing a significant opportunity Don t be paralyzed by fear or misunderstanding Learn about the plan, do the math and understand the true cost, risk & probability.
How to find out if the Health Investment Plan is for YOU 1. Learn about the Plan Attend a presentation www.teradyne.com/benefits Fidelity HSA Brainshark Health Investment Videos Guidespark Videos Talk to someone in the plan 2. Compare Plans Review plan comparison charts Understand how the plans function differently 3. Model your Costs Castlight Health Assess your costs Fidelity Health Plan Cost Modeling Tool 4. Plan for the Upcoming Year Consider fully funding your HSA the first year Set up your HSA account Start thinking about becoming a health care consumer
LEARN What s the Health Investment Plan? (formerly the Blue Care Elect Saver PPO with HSA) It s a unique and powerful combination Teradyne s Consumer Driven Health Plan (CDHP) Lower premium Slightly higher deductible Higher Out-of-pocket maximum Preventative Coverage at 100% Enrollment is required to open an HSA partnered with Health Savings Account (HSA) administered by Fidelity Long term savings vehicle for medical expenses, invested similar to a 401k Individual brokerage account Pays for qualified medical expenses for you, your spouse, and eligible dependents Triple taxed-advantaged benefits Teradyne contributes $650 for individuals and $1300 for indiv + 1 and family.
LEARN Advantages of a Health Savings Account (HSA) 1. Unique Tax Savings Opportunity 2. HSA Balance grows over time 3. It belongs to you
Are you missing an opportunity? Teradyne has a higher than average Savings Plan Participation: 88% of Teradyne employees participate in the 401k Savings Plan >30% of Savings Plan Participants hit the annual contribution max ($18,000) Annual contributions to an HSA are independent of what can be contributed to a 401k or Roth IRA. Teradyne funds 50% of the annual deductible into employees HSA accounts
Think about your overall retirement strategy Are you maximizing what is available to you? would recommend the following. First, contribute enough to your 401(k) to maximize the employer match Next, consider contributing to the HSA up to the applicable limit, taking advantage of the employer HSA contribution ($650/$1300) Next, consider contributing more to your 401(k) up the maximum, $18,000 or $24,000 if you will be age 50 or older by December 31. If you still wish to save more, consider contributing to an IRA, individual savings or brokerage account. Note: Consult a tax advisor for additional advice on how to maximize your contributions.
If you have an HSA Are you STILLmissing an opportunity? You ve made the leap to join the plan, but are you taking the opportunity to invest your funds so your investment can grow tax free? Of the individuals that have an HSA account: Less than 10% are investing in moderate to aggressive funds Teradyne has higher population of Savers 56% are Savers / Semi Savers vs 39% for Fidelity s Book of Business Pay for expenses out of pocket is you can plan the cash flow Definitions: Semi-Saver = Spends 10% to 35% of current year contributions Saver = Spends 10% or less of current year contributions
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* The Fidelity-sponsored 2014 HSA survey was conducted by GfKPublic Affairs & Corporate Communications from April 30 to May 9, 2014, using GfK sknowledgepanel, a nationally representative online panel composed of 1,247 U.S. adults who are age 25-65, have household income of $25,000 or more, have primary or shared responsibility for household financial decisions, and receive health care benefits through their own or their spouse/partner s employer. Of these respondents, 332 self-identified as being enrolled in an HSA-eligible health plan.
Why aren t YOU in the Health Investment Plan? I have NOidea how much my actual health care costs are in order to see if it would make financial sense for me It s too much risk for my family. What if something major happens? I want them to have high quality care. It s not a good plan if you have children. It s just too much work to manage this plan I ll have to pay too much money out of pocket if I have any usage
Scenarios Hypothetical Scenario Regular Usage (Under Individual Coverage on Health Investment Plan) Medical Expenses Routine Adult Physical 100% Covered (2) Sick Visits -$320 Dermatologist visit - $125 MRI / Imaging -$475 (12) Tier II Prescriptions - $360 Total Medical Claims: $1,280 Note: This scenario assumes the individual receives all of standard wellness visits through out the year based on age and gender, all of which are covered at 100%. The same scenario under the Advantage EPO plan would cost: $490 Employee Cost 100% of the costs up to the deductible ($1300) : $1,280 Total Cost: $1,280 STOP THE BUS Don t forget about. Teradyne s contribution to the employee HSA: + $650 Premium Difference: + $639.36 TRUE Total Cost= $9.36 balance in HSA
Scenarios Hypothetical Broken Arm Scenario (Under Family Coverage on Health Investment Plan) Medical Expenses Emergency Room Visit Employee Cost 100% of the costs up to the deductible: $2,600 10% of the costs up to the out- MRI / Imaging of-pocket maximum: $1,457.50 Surgical treatment of a broken arm Total Cost: $3,350.00 (surgeon fee, operating room, anesthesia, other fees) Follow up office visits Total Medical Claims: $17,175 Note: This scenario assumes the all family members receive all of their standard wellness visits through out the year based on age and gender, all of which are covered at 100% under preventative. The same scenario under the Advantage EPO plan would cost: $300 (Individual Out-of-Pocket Maximum embedded in Family Coverage) STOP THE BUS Don t forget about. Teradyne s contribution to the employee HSA: + $1300 Premium Difference: + $2026.08 TRUE Total Cost: $23.92
The True Maximum Out of Pocket Outside of monthly premiums, what is the most I could possibly spend in this plan? Individual Family Maximum Out of Pocket $3,350 $6,750 less- Teradyne s Contribution to HSA (TER funds 50% of the deductible) less- Annual Premium Difference (compared to the EPO) $650 $1,300 ($148.46 -$92.18) x 12 = $675.36 ($445.37 - $276.53) x 12 = $2,026.08 True Out-of-PocketMaximum with $2,025 * $3,423.92 * TER funding 50% of the deductible & re-investing the premium difference * Assumes worse case scenario (less than 2% of covered members have claims in this category) The True maximum out-of-pocket amount is what employees would need to earmark in savings to insulate themselves 100% from the extremely low probability of a catastrophic event. This would mean generating near $44,100 in medical claims. This amount is similar to ~ 3.5 % contribution of 401k for the average employee salary, Which can be entirely funded by HSA contributions on a pre-tax basis
Need help figuring it all out? We have resources to make it easier Teradyne Open Enrollment Website: www.teradyne.com/benefits Plan Comparisons and Summary Plan Descriptions www.teradyne.com/benefits Castlight Health Past care detail, cost & quality data Enhanced -Health Plan Cost Modeling Tool powered by Fidelity Compare Cost Estimates: www.bcbsma.com Under Find a Doctor Go to: www.401k.com (look under the Health Savings Account tile) Contact the HR Service Center Phone: 978-370-3041 Email: hr.service.center@teradyne.com
NEW 2015: Introducing CastLight A new tool to provide a resource for assessing your past healthcare usage as well as researching cost and quality for future healthcare needs Available to all employees (& dependents) regardless of which health plan they are enrolled in. Important to understand the strengths and weaknesses of the tool
Resources: Introducing CastLight
Understand your medical needs
Cost of Care
What do you need to consider? How do you plan to pay for medical expenses in retirement? Are you currently maximizing all of your tax-free savings plan contributions? What are your anticipated medical needs? Involve the other decision makers in your household. Research & understand the plans well before the two weeks of Open Enrollment
Appendix
Qualified medical expenses What are they? Defined by the IRS Includes out-of-pocket expenses such as: Health plan deductible and coinsurance Most medical care and services Dental and vision care Prescription drugs Medicare premiums IRS Publication 502: Visit irs.gov/publications/p502 for a list of medical expenses that generally qualify for payment or reimbursement.