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HSAs: Do the Math Eric Johnson Regional Sales Manager, First Horizon Msaver 817-366-7536 cell |

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Presentation on theme: "HSAs: Do the Math Eric Johnson Regional Sales Manager, First Horizon Msaver 817-366-7536 cell |"— Presentation transcript:

1 HSAs: Do the Math Eric Johnson Regional Sales Manager, First Horizon Msaver cell |

2 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Why is Health Insurance SO EXPENSIVE? Two Reasons: 1) Health Care is Expensive

3 any reform must reduce the long-term costs of health care HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. A Long Term Solution

4 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Why is Health Insurance SO EXPENSIVE? Two Reasons: 1) Health Care is Expensive 2) Compound Interest

5 Compound Interest The most powerful force in the universe is compound interest. -Albert Einstein HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

6 Earn Interest Let it Ride $100 x 1.1 = $110 (interest income $10) $110 x 1.1 = $121 (interest income $11) $121 x 1.1 = $133 (interest income $12) $133 x 1.1 = $146 (interest income $13) $146 x 1.1 = $161 (interest income $15) HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

7 Compound Interest: Good for Investments Bad for Premiums HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

8 Up, Up, and Away At an average rate increase of just 10% per year, heres an 8 year projection of a $350 monthly premium. $350$385$424$466$512$564$620$682$750 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

9 Wheres Your Breaking Point? Will this years rate increase be the straw that breaks the camels back? HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

10 Our Solution: CONSUMERISM HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

11 Do You Sell HSAs? HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

12 HSAs are Confusing HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

13 Think Differently

14 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. a)To Pay for low cost, common, predictable expenses Why Do We Buy Insurance? b) To pay for high cost, infrequent, unpredictable, catastrophic expenses

15 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Other Types of Insurance: a)To Pay for low cost, common, predictable expenses b) To pay for high cost, infrequent, unpredictable, catastrophic expenses Answer

16 For Example Insurance Budget HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

17 Traditional Health Plans: a)To Pay for low cost, common, predictable expenses b) To pay for high cost, infrequent, unpredictable, catastrophic expenses c) All of the Above Answer

18 FULL Coverage Deductible / Coinsurance Copayments HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

19 The Result High Fixed Premium Ignorance, Apathy, and Overutilization No Refunds for Unused Services HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

20 A New Approach BUY INSURANCE for the Big Stuff BUDGET for the Rest HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

21 The Result Lower Fixed Premium New Variable Cost More Educated, Engaged Consumers HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

22 Health Plan + Savings Account Health Plan Savings Account (Fixed Premium)(Variable Cost) HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

23 High Deductible Health Plan Health Savings Account (Fixed Premium)(Variable Cost) HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Health Plan + Savings Account

24 High Deductible Health Plan Minimum deductible of $1,200 individual / $2,400 family Maximum OOP of $5,950 individual / $11,900 family No copays before the deductible Up-front coverage for preventive care is allowed HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

25 Health Savings Account Pre-tax contributions for health care expenses Up to $3,050/yr individual, $6,150/yr family (+$1, ) Contributions by employer or employee Individually owned accounts, no employer responsibility Unused funds roll over year to year HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

26 Consumerism Consumerism Health PlanAccountTransparencyWellness Education & Communication HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

27 NO Copays! HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

28 Difficult to get off the crack HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Addicted to Co-pays? Put down the crack pipe, you must!

29 Let it Go! HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

30 Drop the Banana! HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

31 Consumerism Consumerism Health PlanAccountTransparencyWellness Education & Communication HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

32 Part of the Job HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Good HSA Administrator

33 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. I just use the local bank

34 -Theyre local -You may have a relationship with the local bank -Theyre local -May not specialize in HSAs -May be slow to open/fund accounts and may have difficulty answering ???s

35 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. An Important Decision Selecting an HSA administrator is just as important as choosing an insurance carrier. If your employees dont have a good experience, theyll blame you. Dont let the HSA administrator you recommend be the weakest link.

36 Consumerism Consumerism Health PlanAccountTransparencyWellness Education & Communication HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

37 Pricing Tools HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

38 When the consumer has a problem, the market delivers a solution. Removing the copays creates a problem for the consumer. HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. SOLVED Problem SOLVED

39 ER Alternatives Extended Hours Online Check-in More convenient and less expensive than an emergency room HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Urgent Care Centers

40 DR Alternatives HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. 1. Retail Clinics 2. Phone-Based Physicians

41 Lab Alternatives HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. 1. Retail Labs 2. Diagnostic Testing Websites

42 Rx Alternatives HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. 1. Switch to a Generic Synthroid Retail: $26.09 Discount Card: $20.35 Contracted Price: $18.24 Generic: $11.98 Levothyroxine Sodium

43 Rx Alternatives HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. 1. Switch to a Generic 2. Discount Generic Programs ($4-5)

44 Rx Alternatives HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. 1. Switch to a Generic 2. Discount Generic Programs ($4-5) Synthroid Generic: $11.98 Levothyroxine is on Wal-Mart and Sams Clubs $4 Generic List

45 Rx Alternatives HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. 1. Switch to a Generic 2. Discount Generic Programs ($4-5) 3. Ask for Samples

46 Consumerism Consumerism Health PlanAccountTransparencyWellness Education & Communication HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

47 You Are What You Eat HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

48 (click to view)

49 Clean Your Plate HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

50 Clean Your Plate Platter HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

51 How Do We Change Behavior? HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

52 The Portion Plate HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

53

54 Wellness Programs HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. GoZone Pedometer

55 Strategic Contributions to HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

56 Consumerism Consumerism Health PlanAccountTransparencyWellness Education & Communication HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

57 Benefits Communication HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Source: Watson Wyatt Worldwide Employee Survey

58 Drive by enrollment meetings dont always work when an employee has a lot of options to consider or if one of their options is a consumer directed health plan, which is a new concept and requires some communication & education.

59 Stay Smart Stay Healthy HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

60 Art or Science? HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

61 When you lead with science… HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

62 Step 1: Get their attention HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

63 Lead with the Art! HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

64 Do the Math! HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

65 Copay vs. HSA $3k deductible 100% Copay Plan $3k deductible 100% HDHP HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

66 Premium Savings – Put in HSA $3,000 Deductible 100% coverage after deductible Dr: $30 Rx: $10 / $40 / $60 Monthly: $347 Yearly:$4,164 $3,000 Deductible 100% coverage after deductible Dr: Negotiated rate / deduct. Rx: Negotiated rate / deduct. Monthly: $297 Yearly: $3,564 COPAY HSA $600/year HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

67 Whats the Risk? $3,000 Deductible Doctor copays Prescription copays (all paid with after tax dollars) $3,000 Deductible $600 deposited in HSA $2,400 Total Exposure (all paid with pre-tax dollars) COPAYHSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

68 Example 1 Low Utilizer HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

69 Low Utilizer Annual physical: $0 No other doctor visits or prescriptions $600 in HSA to use for dental, vision, or future medical expenses HSA Annual physical: $0 No other doctor visits or prescriptions No refund from insurance company COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

70 Qualified Medical Expenses HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. until 1/1/11

71 Great R.O.I. for Employers Employers will get their moneys worth Low Utilizers will appreciate their benefits Employees will be happier HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

72 The Winner and New Champion HSA COPAY HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

73 Example 2 Medium Utilizer HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

74 Medium Utilizer Annual physical: $0 COPAY HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

75 Medium Utilizer Annual physical: $0 2 sick visits:??? HSA Annual physical: $0 2 sick visits:$60 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

76 Price Transparency Tools HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

77 Price Transparency Tools Office Visit, Established Patient, Level 2 (zip code 32807) Minor problem requiring a limited exam and treatment – approximately 10 minutes with the doctor $70 Office Visit, Established Patient, Level 3 (zip code 32807) Moderate problem requiring counseling and treatment, may require coordination of care with other providers – approximately 15 minutes with the doctor $113 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

78 Medium Utilizer Annual physical: $0 2 sick visits:$60 Annual physical: $0 COPAYHSA 2 sick visits:$226 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

79 Medium Utilizer Annual physical: $0 2 sick visits:$60 Synthroid ($10)$120 Atenolol ($8)$96 Lipitor ($60)$720 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Annual physical: $0 2 sick visits:$226 Synthroid Atenolol Lipitor HSA ?

80 Price Transparency Tools HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

81 Price Transparency Tools HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

82 Price Transparency Tools HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

83 Synthroid (100 MCG ) HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. $26.09$20.35 $20.74 $22.83 $20.79 $18.24

84 Atenolol (100 MG ) HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Not Listed $6.07 $8.99 $10.49 $6.32 $7.65

85 Lipitor (10 MG ) HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Not Listed $95.27 $97.41 $99.95 $96.59 $88.80

86 Medium Utilizer Annual physical: $0 2 sick visits:$60 Synthroid ($10)$120 Atenolol ($8)$96 Lipitor ($60)$720 Total$996 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Annual physical: $0 2 sick visits:$226 Synthroid ($18)$216 Atenolol ($8)$96 Lipitor($89)$1,068 Total$1,606 HSA

87 Medium Utilizer Total: $996 Total (after tax): $996 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Total: $1,606 minus HSA: $ 600 Total: $1,006 HSA

88 Federal Income Tax Brackets 2010 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Tax RateMost Single FilersMarried Couples Filing Jointly 10%Not over $8,375Not over $16,750 15%$8,375 – $34,000$16,750 – $68,000 25%$34,000 – $82,400$68,000 – $137,300 28%$82,400 – $171,850$137,300 – $209,250 33%$171,850 – $373,650$209,250 – $373,650 35%Over $373,650

89 Medium Utilizer Total: $996 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Total: $1,606 minus HSA: $600 minus Tax Savings $400 (25%) HSA

90 FICA Tax Rate 2010 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. 6.2% of first $106, % with no limit 7.65% matched by employer TOTAL

91 Texas Sales Tax Holiday HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

92

93 Medium Utilizer Total: $996 Total (after tax): $996 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Total: $1,606 minus HSA: $600 minus Tax Savings $400 (25%) Total: $606 Savings vs. Copay: $390 HSA

94 Medium Utilizer Total: $996 Total (after tax): $996 Remaining Risk: $3,000 + addl copays COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Total: $1,606 minus HSA: $600 minus Tax Savings $400 (25%) Total: $606 Savings vs. Copay: $390 Remaining Risk: $1,394 HSA

95 The Winner and Still Champion HSA COPAY HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

96 Example 3 High Utilizer HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

97 High Utilizer Annual physical: $0 4 sick visits: $120 1 Generic ($10) $120 1 Brand ($40) $480 1 Non-Form. ($60) $720 1 Hospital Visit: $3,000 Total: $4,440 Deductible: $3,000 COPAYHSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

98 High Utilizer Total: $4,440 Total (after tax): $4,440 Remaining Risk:Copays Deductible: $3,000 minus HSA: $600 minus tax savings: $750 Total (after tax): $1,650 Savings: $2,790 COPAY HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

99 Higher Utilizer Annual physical: $0 6 sick visits: $180 2 Generic ($10) $240 2 Brand ($40) $960 2 Non-Form. ($60) $1,440 1 Hospital Visit: $3,000 Total: $5,820 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

100 Higher Utilizer Total: $5,820 Total (after tax): $5,820 Remaining Risk:Copays Deductible: $3,000 minus HSA: $600 minus tax savings: $750 Total (after tax): $1,650 Savings: $4,170 Remaining Risk: $0 COPAY HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

101 Knockout! HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

102 The Undisputed Champion HSA COPAY HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

103 This is the money you could be saving by switching to an HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Note: You could also save this money by switching to Geico.

104 Will this work in Baton Rouge? HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

105 Low Utilizer Annual physical: $0 No other doctor visits or prescriptions $600 in HSA to use for dental, vision, or future medical expenses HSA Annual physical: $0 No other doctor visits or prescriptions No refund from insurance company COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

106 Medium Utilizer Annual physical: $0 2 sick visits:$60 Synthroid ($10)$120 Atenolol ($8)$96 Lipitor ($60)$720 Total$996 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Annual physical: $0 2 sick visits:$226 Synthroid ($18)$216 Atenolol ($8)$96 Lipitor($89)$1,068 Total$1,606 HSA

107 Medium Utilizer Total: $996 Total (after tax): $996 Remaining Risk: $900 per hospital stay + addl copays COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Total: $1,606 minus HSA: $600 minus Tax Savings $400 (25%) Total: $606 Savings vs. Copay: $390 Remaining Risk: $1,394 HSA

108 High Utilizer Annual physical: $0 6 sick visits: $180 2 Generic ($10) $240 2 Brand ($40) $960 2 Non-Form. ($60) $1,440 1 Hospital Visit: $900 Total: $3,720 COPAY HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

109 High Utilizer Total: $3,720 Total (after tax): $3,720 Remaining Risk:Copays Deductible: $3,000 minus HSA: $600 minus tax savings: $750 Total (after tax): $1,650 Savings: $2,070 Remaining Risk: $0 COPAY HSA HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

110 Dual Option Choice is an important part of consumerism At renewal, employees will do the selling HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

111 Coinsurance Plans making a comeback? 100% Plans (no coinsurance after deductible) are a no-no. They encourage over-utilization, not consumerism. When possible, use coinsurance to keep the consumers money involved in higher-dollar claims. HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

112 The Science of HSAs HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

113 Department of Treasury All About HSAs booklet HSA Basics Tri-Fold Frequently Asked Questions HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

114 Internal Revenue Service Publication 502 Form 8889 HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

115 Your HSA Administrator HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc. Get the accounts set up Get the accounts funded Answer questions Provide assistance

116 CDHC: The Real Healthcare Reform Click the below link to view a presentation on HR.com by Craig Keohan, president of First Horizon Msaver, about HSA usage trends.

117 What if I Have Questions? HSA Communication Strategies | Copyright 2009 First Horizon Msaver, Inc.

118 Eric Johnsons Contact Info: cell (my blog) Connect with me on Erics Contact Info


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