2014
City of Vancouver – 2014 plans
 The City continues to offer two additional options
for employees to choose from
 Both Regence and Kaiser offer a Consumer Directed
Health Plan (CDHP) along side their traditional
PPO and HMO plans
 The CDHP offerings allow employees to set up a
Health Savings Account (HSA) to save money for
future health care expenses
CDHP 2014
2
City of Vancouver – CDHP/HSA Eligibility
 You or your dependents may not be enrolled in
another health care plan that pays for services
before the deductible is met if you are enrolling in
the City’s CDHP
 Since an HSA and an FSA are both tax-sheltered
accounts, you may not participate in both accounts
 You may continue to participate in a dependent
care spending account if you enroll in the
CDHP/HSA
CDHP 2014
3
What is Consumerism and Consumer-Directed
Health Plans (CDHP)?
 Consumerism - any activity that encourages or
empowers informed or responsible spending for or
use of healthcare related goods or services
 CDHP - a plan, typically a PPO with a high
deductible and an “account” (e.g. Health Savings
Account (HSA))
CDHP 2014
4
What is Consumerism and Consumer-Directed
Health Plans (CDHP) (cont.)?
 Consumerism is a wide-ranging topic, not limited
to just Consumer Directed Health Plans (CDHPs)
and shares these goals:




Create better consumers of health care
Reduce the number of services utilized, particularly
unnecessary services, or those for which less
expensive, and equally as effective, alternatives exist
Deliver health care in a more cost-effective and
efficient manner
Act as a long-term strategy to reduce costs or future
“trend” increases
CDHP 2014
5
What is health care consumerism?
 Exhibiting healthy behaviors
 Taking personal responsibility for the cost and quality
of the services that an individual purchases
 Using strategies for encouraging consumerism, which
include communicating effectively with your health
care professionals, understanding your coverage, and
getting informed about options
 Putting your health at the forefront, because
consumerism isn’t just managing your health plan,
it’s about managing your life
CDHP 2014
6
What is a consumer-directed health plan?
It is a plan under which employees spend
money from Health Savings Accounts
(HSAs) to pay for health care services. Once
the high deductible is met, services are
covered by traditional insurance.
CDHP 2014
7
Consumer Directed Health Plan (CDHP) with
Health Savings Account (HSA)
Health Savings Account (HSA)
Employer funds $500 per employee-only and $1,000 per
employee/dependents
Preventive Care
100%
Employee may also fund account
CDHP Deductible
$1,500 deductible per person ($3,000 per family) (may be offset by HSA)
Traditional Insurance Coverage
80% PPO
60% Non PPO
$5,000 out-of-pocket maximum per person ($10,000 per family);
includes the deductible
Then plan pays 100%
CDHP 2014
8
Health Savings Account (HSA) Details
City Annual Contribution
 $500 per enrolled employee only
 $1,000 per enrollment employee and dependents
 City’s contribution will be deposited at the beginning of
the plan year
Annual Tax-Free Contribution Limits
 Employee-only coverage: $3,300
 One or more dependent coverage: $6,550
 $1,000 annual HSA catch-up contribution at age 55 and
older
 Maximums are combined totals that include employer and
continued …
employee contributions
CDHP 2014
9
Health Savings Account (HSA) Details
Establishing/Using an Account
 The HSA will be an employee-owned account
 Account is through Bank of America
 HSA account holders will have a debit card and/or
checkbook to pay for qualified medical expenses
 No reporting on the account is provided to the City
 After the account balance reaches $1,000, employees can
choose whether or how to invest the balance
 The City pays the administrative fee for active employees
CDHP 2014
10
Health Savings Account Overview
Flexible
 Portable and, like an IRA, travels with you, not your job
 Rolls over each year, unlike a Flexible Spending Account
 Not a “use it or lose it” account – save for next year, or
better yet, for retirement
 City will make a contribution to the HSA in 2014
 You also may contribute to the HSA on a pre-tax basis
 You’re in control and choose when to use your HSA or
pay out-of-pocket
continued …
CDHP 2014
11
Health Savings Account Overview
Flexible
 Inheritable
 You can make an after-tax contribution to the HSA and
deduct it on your federal tax return
 The CDHP premium is lower than the regular plans,
those that are currently making a higher pre-tax
premium contribution can elect to contribute the
difference to the HSA and be neutral on payroll
deductions.
continued …
CDHP 2014
CDHP 2014
12
Health Savings Account Overview
Tax Advantages
 Contributions are tax-free
 Withdrawals are tax-free when used to pay for qualified
medical expenses
 Earnings grow tax-free
 Even if your HSA-compatible coverage ends, you can
use HSA funds tax-free for eligible medical expenses
continued …
CDHP 2014
CDHP 2014
13
Health Savings Account Overview
Allows Long-term Investment Opportunities
 HSA funds may be invested for greater earning potential
 Choose from a variety of mutual funds
CDHP 2014
CDHP 2014
14
Resources
 Further information can be found on the City’s website.
 Our medical carriers’ websites also house important
information to help you be a better health care consumer
 www.myregence.com
 www.kp.org
 Each carrier’s website will help you understand the costs for
various procedures, compare providers for cost and quality,
review costs for prescription drugs
continued …
CDHP 2014
CDHP 2014
15
Resources
 Cascade Centers offers health education services to City
employees along with Wellness.
 www.cascadecenters.com
CDHP 2014
16
Questions and Discussion
CDHP 2014
17