High Deductible Health Plan (HDHP)
and
Health Savings Account (HSA)
INFORMATIONAL SESSIONS
NOVEMBER 2011
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Agenda
• Introduction of HDHP/HSA
• Overview of the HDHP
• Overview of Health Savings Accounts (HSA)
• Employee Plan Design Comparison/Scenarios
• Questions and Answer Session
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High Deductible Health Plan (HDHP)
• HDHP is a PPO plan administered by United
HealthCare (UHC)
• PPO plan provides coverage for in-network and
out-of-network services
• UHC provider network is same as for HMO and
POS plans
• Calendar year deductible applies to both innetwork and out-of-network services
• High deductible required to enable Health
Savings Account participation
3
Overview of HDHP
In
Network
Out of
Network
Annual Deductible
Individual (Employee Only)
Family (Employee +1 or more dependents)
Co-Insurance
$1,500
$3,000
$1,500
$3,000
20%
40%
$1,250
$2,500
$2,500
$5,000
$2,750
$5,500
$4,000
$8,000
Unlimited
Unlimited
Coinsurance Maximum
Individual
Family
Annual Out-of-pocket Maximum
(Including Deductibles)
Individual
Family
Lifetime Maximum
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Special Considerations of HDHP
• Co-Insurance applies after deductible is met
• Family deductible applies when you are one
or more dependents
• Family deductible must be fully met even if
only one person utilizes the plan
• Deductible and co-insurance apply to
prescription drugs (NO co-pays)
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Monthly Employee Premiums
Employee Only
Employee + One
Dependent
Employee + Two
or More
Dependents
FT Faculty & Staff
Earning Less Than
$34,000
$5.47
$19.81
$39.62
FT Faculty & Staff
Earning $34,000
or More
$5.98
$21.65
$43.31
PT Faculty & Staff
$132.17
$271.00
$400.11
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Why to Choose the HDHP?
• Lower health insurance premiums
• Greater flexibility and control in how your
healthcare dollars are spent or saved
• Ability to contribute to a tax-advantaged
Health Savings Account (HSA)
• May offer the best value among the available
plan choices
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Why to Fund the Health Savings Account?
• Washington University helps fund your account
with $400 per year*
• Contributions are tax-deductible, grow tax-free,
and can be withdrawn tax-free when used
to pay for qualified medical expenses
• No “use-it-or-lose-it” requirement; grow your
account balance year over year
• The funds and account is yours and goes with
you even if you change jobs or insurance
coverage
* Employees with salaries under $115,000 must contribute at least $200/year to their HSA and
employees with salaries over $115,000 must contribute $400/year to their HSA in order to receive
the
University contribution.
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Making Contributions to an HSA
•
Contribute on a tax-free basis either through:
– Payroll deduction (pre-tax contribution)
– Directly to USBank (top-line tax deduction)
• Contribution limits (2012):
– Single Coverage - contribute up to $3,100
(less University contribution of $400)
– Family Coverage - contribute up to $6,250
(less University contribution of $400)
– Catch-Up Contribution: age 55 or older – up
to an additional $1,000
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Using Your HSA Funds
Use your U.S. Bank Payment Card, write a
check, or pay online to reimburse
healthcare expenses.
• Make sure your expense is eligible
• Save your receipts
• You do not have to submit receipts for
reimbursement
• Reimburse yourself now or later
• There is no specified deadline for
reimbursement
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Qualified Medical Expenses
• IRS Publication 502* contains a list of all approved
qualified medical expenses, including:
•
•
•
•
•
•
•
•
•
•
•
Doctor’s office visits
Prescriptions
Some over-the-counter items*
Hospital visits
Acupuncture
Chiropractor
Eyeglasses and contact lenses
Dental treatment
Eye surgery
Smoking cessation programs
Therapy
* IRS Publication 502 can be found on-line at www.mycdh.usbank.com,
under Useful Links & Resources.
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Enrollment Experience
• Enroll in the Health Plan
through the employer and
elect the U.S. Bank HSA
• Employer processes
enrollment file
• Payment card(s) are ordered
and mailed
• Employees receive
“welcome” notification via
email
• Complete online enrollment
process
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Managing Your HSA Online
• Online capability to request additional
card for spouse and dependents
• Convenient online Bill Pay and direct
deposit reimbursement options
• Update dependent information,
designate beneficiaries, etc.
• Automated e-mail reminders and notices
• Access to important decision support
tools to make informed healthcare
decisions from the U.S. Bank Healthcare
Toolbox
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New technologies: U.S. Bank Healthcare Mobile
“I’m on my way to the
doctor. Do I have an
adequate balance?”
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“I just purchased a prescription at my
pharmacy. Will my HSA balance cover
the cost?”
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HSA Investment Experience
• Access investment account
information such as balance
and fund performance
• Manage your investment
account online
(i.e. buy and sell funds)
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Accountholder Support
• HSA Consumer Services Representatives
available Monday through Friday,
7:00 a.m. to 7:00 p.m. (CST) – 877-470-1771
• Monthly statements available online or mailed to your
residence
• Annual IRS reports are provided
• Interactive Voice Response (IVR), 24/7 – 877-470-1771
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Scenario #1: Single Employee (Income >$34,000) – Generally
Healthy
Premium/Procedure
UHC
Choice HMO
UHC
Choice Plus
POS
UHC HDHP
BC Excel
BC Choice
$0
$0
$0
$0
$0
Office Visit – Illness
($90)
$25
$25
$90
$90
$90
Antibiotic – Generic
($10)
$10
$10
$10
$10
$10
Out-of-Pocket Cost
($380)
$35
$35
$100
$100
$100
$468.84
$775.20
$71.76
$1,097.76
$244.56
$1.197.76
$344.56
Annual Physical ($280)
Premium Contribution
HSA Contribution
($400)
Potential Tax Savings*
(HSA) @ 28% Rate
Total Annual Cost
($756)
$503.84
$810.20
($984.24)
* Tax savings will vary based on your current FSA contribution and medical plan election.
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Scenario #2: Employee Plus Spouse (income >$34,000) –
Have 1st Baby in July
Premium/Procedure
UHC
Choice HMO
UHC
Choice Plus
POS
UHC HDHP
BC Excel
BC Choice
Pre-Natal Care – 6 OB
visits ($740)
$40
$40
$740
$548
$740
Office Visit – Illness
($90)
$25
$25
$90
$18
$26
Normal Delivery
($6,000)
$300
$300
$2,936
$1,200
$1,200
Out-of-Pocket Cost
($6,830)
$365
$365
$3,766
$1,766
$1,966
$3,137.04
$4,802.28
$389.76
$5,556.54
$1,164.36
$7,322.54
$3,130.36
Premium Contribution
HSA Contribution
($400)
Potential Tax Savings*
(HSA) @ 28% Rate
Total Annual Cost
($1,638)
$3,194.54
$4,877.60
$2,117.76
* Tax savings will vary based on your current FSA contribution and medical plan election.
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Scenario #3: Employee Plus Spouse (income >$34,000)
– Elective Surgery for Family Member
Premium/Procedure
UHC
Choice HMO
UHC
Choice Plus
POS
UHC HDHP
BC Excel
BC Choice
$0
$0
$0
$0
$0
Office Visits (1 PCP, 2
specialists) - ($330)
$105
$105
$330
$330
$330
MRI – Knee ($750)
$150
$150
$750
$286
$486
Elective Knee Surgery
($7,000 charge)
$150
$150
$2,936
$1,384
$1,400
Rehabilitation ($1,560 –
18 visits)
$720
$720
$312
$0
$312
$1,125
$1,125
$4,328
$2,000
$2,528
$2,615.52
$3,846.72
$259.80
$4,474.68
$781.68
$6,474.68
$3,309.68
Annual Physical
($280)
Out-of-Pocket Cost
($9,920)
Premium Contribution
HSA Contribution
($400)
Potential Tax Savings*
(HSA) @ 28% Rate
Total Annual Cost
($1,638)
$3,740.52
$4,971.72
$2,549.80
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* Tax savings will vary based on your current FSA contribution and medical plan election.
Scenario #4: Employee Plus Family with Two Children –
One child has a sports injury, the other child has asthma
Premium/Procedure
UHC
Choice HMO
UHC
Choice Plus
POS
UHC HDHP
BC Excel
BC Choice
$630
$630
$3,840
$1,840
$2,040
Child 2 - Emergency Room
Visit, 1 Night in the Hospital, 4
office visits, and Asthma
Medications
($5,800/$1,700 Rx)
$400 +
$540 (Rx)
$940
$1,250
$1,560
+ $540 (Rx)
$1,760 +
$540 (Rx)
Employee – Routine Physical
($250)
$0
$0
$0
$0
$0
Spouse – Well Woman Exam
($230) and 2 office visits for
illness ($180)
$0 + $50
$0 + $50
$36
$410
$410
Out-of-Pocket Cost ($15,360)
$1,620
$1,620
$5,126
$4,350
$4,750
$3,658.56
$5,757.84
$519.72
$6,638.40
$1,547.04
$10,988.40
$6,297.04
Child 1* - Emergency Room
Visit, Treatment for Broken Leg,
and Physical Therapy ($7,200)
Premium Contribution
HSA Contribution
($400)
Potential Tax Savings** (HSA)
@ 28% Rate
Total Annual Cost
($1,638)
$5,278.56
$7,377.84
$3,608.72
* 4 specialist visits, 8 physical therapy sessions
** Tax savings will vary based on your current FSA contribution and medical plan election.
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Closing Thoughts and Considerations
• If you plan to fully-fund the HSA, the HDHP option should
be a good choice for most employees
• Be aware that the plan works differently than the HMO
and POS plans
• First dollar deductible before any coverage, including
Rx (except preventive care)
• True out-of-pocket maximum (no copays and Rx counts
towards maximum)
• Research the full cost of your routine medical care and
prescriptions
• Information can be found on the health plan websites
and Medco.com
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Questions?
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