Transcript Self-Funded vs. Fully-Insured Presentation

Welcome
Catholic Diocese
Employee Benefits Enrollment
Guide 2015
Presented by | Twila Roman
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Welcome to Open Enrollment!
Catholic Diocese offers you and your eligible
family members a comprehensive and valuable
benefits program. We encourage you to take the
time to educate yourself about your options and
choose the best coverage for you and your
family.
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How to Enroll
 Review your current benefit elections.
 Update your personal information as necessary.
 Make your benefit elections. (Once you make
benefit elections, you will not be able to change
them until the next open enrollment period,
unless you have a qualified change of status).
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When to Enroll
 The open enrollment period runs
November 6, 2014 through
November 21, 2014.
 The benefits you elect during open
enrollment will be effective from
January 1, 2015 through December
31, 2015.
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How to Make Changes
Unless you have a qualified change in status, you cannot make
changes to the benefits you elect until the next open enrollment period.
Qualified changes in status include:
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Marriage
Divorce
Legal separation
Status change
Birth or adoption of a child
Change in child’s dependent
status
 Death of a spouse, child or other
qualifying dependent
 Change in residence due to an
employment transfer
 Commencement or termination of
adoption proceedings
 Change in your spouse’s benefits
or employment status
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2015 Health Benefits
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Avera Health Plans
 The Medical and RX Plan will renew with
Avera Health Plans for 2015
 Catholic Diocese uses a PPO (Preferred
Provider Organization) – Provider Network of
Physicians and Hospitals
 Services incurred by a non-participating
provider are subject to a higher deductible
and coinsurance rate.
 Avera Health Plans PPO Network:
– www.averahealthplans.com
– 888.322.2115 or 605.322.4545
Plan Design Overview
High Deductible Health
Plan/HSA Qualified
Traditional Health Plan
Bronze Health Plan
Deductible - Calendar Year
$2,500 Single
$5,000 Family (Aggregate)
$750 Single
$2,250 Family
$2,000 Single
$4,000 Family
Coinsurance
0%
20%
50%
Out of Pocket - Calendar Year
(includes deductible, coinsurance
& copay)
$2,500 Single
$5,000 Family
(any combination)
$2,500 Single
$6,750 Family
$6,530 Single
$12,700 Family
Office Visit Services
Primary Care Physician
Specialist Care
Deductible – 0%
Deductible – 0%
$25 Copay
$50 Copay
$50 Copay
50% coinsurance
100% paid - Deductible
Waived -No patient cost
sharing
100% paid - Deductible
Waived -No patient cost
sharing
100% Paid – Deductible
Waived - No patient cost
sharing
$50 deductible
$12 Copay Ded waived
$35 Copay
$50 Copay
$100 single $200 Family
$0 Copay Ded waived
$25 Copay
$100 or $200 Copay
Covered Services
Wellness Services
Routine exams, women’s
preventive health, colonoscopies,
etc.
Prescription Drug Coverage
Deductible
Generic
Formulary
Non-formulary
Employer $$ to HSA
Deductible –0%
$750 Single
$1,500 Family
None
Employee Cost Comparison
HDHP/HSA
Coverage Level
Traditional Plan
Bronze Plan
Employee Cost per Employee Cost Per Employee Cost Per
Month
Month
Month
Single
$227.62*
$278.36
$176.14
Single + Child(ren)
$530.96*
$649.49
$410.41
Family
$598.89*
$726.56
$454.45
*If you enroll in the HDHP and open a HSA with Discovery Benefits then the Insurance Fund will contribution up to $750
into your HSA if you elect single coverage and $1,500 if you elect employee + child (ren) or family coverage.
HDHP Savings over
Traditional Plan
Per Month
Annual
Single
$50.74
$608.88 + $750.00 Employer HSA $$
$1,358.88
Employee + Child(ren)
$118.53
$1,422.36 + $1,500 Employer HSA $$
$2,922.36
Family
$127.67
$1,532.04 + $1,500 Employer HSA $$
$3,032.04
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HSA Basics
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What is a HSA?
 A HSA is an account that you can
use to pay medical expenses.
– Must be in conjunction with a high-deductible health
plan (HDHP)
– Money in the HSA is owned by the individual just
like a bank account. Both you and your employer
can contribute funds into this account.
– Tax-advantages: contribute pre-tax money, funds
accrue tax-free and withdraw funds tax-free (if used
for eligible medical expenses)
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What Are the Benefits of
an HSA?
HSAs keep growing in popularity because:
 They are a powerful tax savings tool
 Funds roll over from year to year
 Accounts are individually owned
 HDHP/HSAs typically have lower
monthly premiums
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Who is Eligible for a HSA?
 Anyone who is:
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Covered by a HDHP
Not enrolled in Medicare
Not another person’s tax dependent
Family unit is not enrolled in a FSA or HRA
Not covered under a traditional health insurance
plan*
* Other health insurance does not include: specific
disease or illness insurance, accident, disability,
dental care, vision care and long-term care insurance
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HSA Contributions
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Contribution Limits
Type of Coverage
2015 Limits
Self-only
$3,350
Family
$6,650
Individuals age 55 or older by the end of the year
may contribute an additional $1,000 catch-up
contribution.
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Contribution Limits
Rule: Annual HSA contributions cannot exceed
the sum of the monthly limits in effect for each
month the individual was HSA-eligible.
Example:
Robert, age 25, has self-only coverage and is
HSA-eligible for the first eight months of 2015. The
annual maximum HSA contribution for self-only
coverage for 2015 is $3,350. Robert’s maximum HSA
contribution for 2015 is $2,233 (8/12 x $3,350).
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Full-Contribution Rule
What is it?
 Exception to rule that HSA contribution limits
are determined on a monthly basis
 Applies to individuals who are HSA-eligible
on December 1
How does it work?
 An individual is treated as HSA-eligible for
an entire calendar year if he or she both:
– becomes eligible in a month other than January
– is HSA-eligible on December 1 of that year
 Must remain eligible during the 13-month testing
period (with exceptions for death and disability)
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HSA Distribution Rules
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HSA Distribution Rules
 Distributions from your HSA are tax-free if they
are taken for “qualified medical expenses.”
 Your HSA can only be used for expenses that
are incurred on or after the date the HSA
was established.
 However, HSA funds can be used for expenses
from a prior year or as long as the expenses
incurred on or after the date the HSA
was established.
 HSA distribution for non-eligible expenses are
subject to a 20% penalty and appropriate taxes
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HSA Distribution Rules
 HSA distributions can be taken for qualified medical expenses for
the following people:
– The account holder (person covered by the HDHP)
– Spouse of that individual (even if not covered by
the HDHP)
– Tax dependents of the account holder (even if not covered by
the HDHP)
 For individuals age 65 and older, HSA distributions can be used
for non-qualified medical expenses without facing the
20% penalty.
– However, income taxes will apply for non-medical distributions.
– This rule is regardless of whether the individual is enrolled in
Medicare
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HSA Vendor
 Health Savings Account through Discovery Benefits
www.discoverybenefits.com
 Debit card and online reimbursement requests
 Cash account –
• Funds default to the cash account. You need to set
your HSA maximum if you want funds to
automatically transfer to the higher interest account
or Mutual Funds.
 Higher interest bearing account
• Automatic transfer (48 hour turnaround)
 Mutual funds
• Automatic transfer (3 to 5 day turnaround)
Qualified Medical Expenses
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Qualified Medical Expenses
 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% penalty.
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Qualified Medical Expenses
 Examples of qualified medical expenses include:
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Most medical care expenses
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
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Qualified Medical Expenses
 Expenses that are not considered “qualified
medical expenses” include:
– Insurance premiums (other than the exceptions
listed on the previous slide)
– Over-the-counter drugs (unless a prescription is
retained from a physician – insulin is an exception)
– Services purely for cosmetic reasons
– Expenses covered by another insurance plan
– General health items such as tissues, toiletries,
hand sanitizer
 A full list of eligible and ineligible expenses can
be found at www.discoverybenefits.com
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Recordkeeping
 Whenever you use HSA funds to pay for a
medical expense, you should keep your receipt.
 You may need to demonstrate 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.
 IRS Form 8889 should be completed and
submitted with your income tax filing.
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Healthcare Consumerism
Health Care Costs
 Factors include rising provider costs, aging
population, the introduction of new medications
and medical technology, government regulation.
 The costs of your claims, and all your fellow
employees’ claims, determine the price you and
your employer pay for your health benefits.
 Learn to be a good consumer
In the end,
decisions you
make directly
affect the year
to year
increases in
your health
benefits cost.
What is Healthcare Consumerism?
 Changing your behavior and becoming more involved
in your health, taking more responsibility for making
smart healthcare decisions and becoming more
informed and eventually more financially responsible
for the real costs of healthcare services.
 Use healthcare services more efficiently by getting
acquainted with the concept of “shopping around” for
healthcare services.
 Keeping costs down by avoiding unnecessary care and
most importantly, it encourages the consumer to
comparison shop – not just for quality, value and
service, but for price, by negotiating lower fees with
physicians or insisting on generic prescriptions.
Why is Healthcare
Consumerism Important?
 Good consumers take the time to understand the
products and services they are buying. Whether you
are talking about buying a house, car or healthcare, the
quality and value of your purchase should be an
important consideration.
 In the case of healthcare, higher cost does not
necessarily mean better quality.
 Healthcare costs can vary greatly depending on the
type of procedure, where the care is provided
(emergency room, outpatient clinic or doctor’s office),
and where you live and receive care.
How can you become a good
consumer?
 Get preventive screenings.
 By having an annual exam, you can help avoid a
catastrophic or large claim in the future.
 Grab the phone before the car keys.
 Call your doctor or nurse to see if they can
recommend treatment (OTC med or rest) or if you
should come in to see them for an evaluation
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Share the formulary list with your provider.
 Ask for a generic drug instead of a brand name
drug
 Ask if there are any OTC options
 Ask for samples or discount coupons from your Dr.
How can you become a good
consumer?
 Talk to your physician about treatment options
and costs
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How much will my treatment cost?
What treatment alternatives are available?
Are there differences in cost and effectiveness?
Can laboratory tests be performed in a clinic vs.
hospital?
 Can surgical services be performed in an
outpatient surgical facility?
 Get the results of any test or procedure and ask
what the results mean for your care.
 Take advantage of the free EAP services instead
of utilizing the MH benefits through plan
Make Wise Choices
 Become familiar with your benefits – now. Don’t wait until
you are sick!
 Review your benefits and know your co-payments and
coinsurance amounts for each setting available to you-office visit, urgent care facility, or a hospital emergency
room.
 Know that every setting is not appropriate for every kind of
care. You should pick the setting that will provide you the
best, cost effective care for your condition.
Next Steps
What To Do Next
•Decide which plan works best for you and/or your
family (HDHP/HSA, Traditional, or Bronze).
•All employees must complete the 2015 Election
form.
•If you are changing your current election or are
newly enrolling into the medical or dental plan an
enrollment form must be completed.
•If you are newly electing the HDHP complete the
Discovery Benefits HSA Data Collection
Worksheet.
•Your current HSA payroll contributions will carry
over unless you submit a HSA Contribution
Change Form
Dates to Remember
Open Enrollment Period
November 6, 2014
to
November 21, 2014
Deadlines
If you are NOT making any changes you will continue in the
plan you have today.
Return all paperwork to your local benefit coordinator no
later than November 21st
Please Note…
This benefit summary is intended only to
provide you with a brief overview of your
benefits. It is not a contract and should not be
relied upon to fully determine your
coverage. Refer to your Summary Plan
Description for an exact description of the
services/supplies that are covered, exclusions
and other conditions of coverage.
Thank you!