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Benefits Roundtable August 20, 2013 Rey Guillen, Employee Benefits Director Sandra Poole, Labor Relations Director.

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Presentation on theme: "Benefits Roundtable August 20, 2013 Rey Guillen, Employee Benefits Director Sandra Poole, Labor Relations Director."— Presentation transcript:

1 Benefits Roundtable August 20, 2013 Rey Guillen, Employee Benefits Director Sandra Poole, Labor Relations Director

2 Agenda Section 1Review of Medical RFP Results Section 2Health Care Reform Updates Section 3Introduction to Account Based Health Plans Section 4Question & Answer 2

3 County of Santa Clara Current Medical Plan Enrollment 3

4 County of Santa Clara RFP Goals & Objectives 4  RFP Primary Purpose - Determine if the County’s current Health Net medical plans (for both actives and retirees):  Continue to meet the needs of the County, its employees and retirees  Provide the “Best Value” to the County, it’s employees and retirees  Ensure that the County’s benefits and rates are competitive  RFP Primary Objectives :  Create savings without benefit modification. The County has several collective bargaining agreements that mandate certain benefits  Improved Customer Service levels to employees and retirees  Partner with a health plan provider who has a commitment to developing strong networks with breadth and quality of providers; as well as strong network discounts and innovative products and programs to help reduce the cost of providing health care/trend now and into the future  Partner with a health plan provider that has a commitment to Wellness and keeping members Healthy  The County desires to continue providing its employees and retirees with health care options that afford cost-effective choice and flexibility, while maintaining comprehensive benefit levels  Establishing a partnership with a vendor that can offer comprehensive services to the employees and retirees covered under the plans is a key objective  The importance of cost savings is matched only by the importance of a strong service model and capabilities to meet the needs of The County and its employees

5 County of Santa Clara RFP Goals & Objectives – Benefit Alternatives 5  Based upon feedback ESA received from the County’s employee organizations at the March 22, 2013 Benefits Advisory Roundtable, the County requested Alliant Insurance Service to obtain quotes for the following three scenarios for an effective date of January 1, 2014:  Scenario 1 - Provide quotes to match ALL current Health Net plan benefit levels  Scenario 2 - Provide quotes to match ALL current Health Net plan benefit levels AND add an HMO plan that would be offered alongside the current POS plan to actives and early retirees  Scenario 3 - Provide quotes to replace the current Health Net POS plan with a dual option of an HMO and a PPO for actives and early retirees, as well as all other current retiree plan offerings

6 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 August 20, 2013 Alliant Team: Christine Kerns Kimberly Miller Linda Kepley Santa Clara County Benefits Round Table

7 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: Medical RFP Results Project Scope  RFP Project Scope:  Completion of Final RFP Document  Bid Solicitation  Comprehensive analysis of received proposals, plan design comparison, rate analysis and network comparisons  Considerations:  Rates & Rate caps  Network Strength  Partnership & Flexibility  Product Offerings & Innovation  Current Health Net POS Network Usage:  Tier % of non-capitated claims costs & 90% of utilization  Tier % of claims costs  Tier 35.79% of claims costs  Network Analysis:  Current Top Provider Comparison  Current Pharmacy Formulary Comparison  All carriers provided Geo Access reporting to show employees with desired access between 90% and 100%

8 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: Medical RFP Results Plan Design Comparison

9 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: Medical RFP Results Medical Marketing Carrier Response

10 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: Medical RFP Results RFP Summary Results - Scenario 1  Overview of Results for the above Scenarios for a January 1, 2014 effective date:  Scenario 1  Health Net is offering a 6 month savings of -3.37%, or $1.75 Million  Rate cap of 13% (ACA fees included)  Blue Shield is offering a 6 month savings of -4.98%, or $2.58 Million  Rate cap of 8.9% (ACA fees not included)  Anthem’s quote is not competitive as it results in an additional cost of $3.2 million  Rate cap of 11% (ACA fees included)

11 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: Medical RFP Results RFP Summary Results - Scenario 2  Overview of Results for the above Scenarios for a January 1, 2014 effective date:  Scenario 2 - Enrollment Assumption = 70% HMO/30% POS  Health Net is offering an estimated savings of $2.7 million with enrollment assumptions  The Health Net HMO is 3.5% less than the Health Net POS plan  Little incentive to add the HMO  Rate cap of 13% (ACA Fees included)  Blue Shield is offering an estimated savings of $2.8 million with enrollment assumptions  The Blue Shield HMO is 1% less than the Blue Shield POS plan  Little incentive to add the HMO  Rate cap of 8.9% (ACA fees not included)  Anthem is offering an estimated savings of $6.7 million with enrollment assumptions  Anthem HMO is 39.9% less than the Anthem POS plan  Rate cap of 11% (ACA fees included)

12 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: Medical RFP Results RFP Summary Results – Scenario 3  Overview of Results for the above Scenarios for a January 1, 2014 effective date:  Scenario 3 – Enrollment Assumption = 80% HMO/20% PPO  Health Net is offering an estimated savings of $2 million with enrollment assumptions  The HMO is 4.5% less than the Health Net PPO  Rate cap of 13% (includes ACA fees)  Blue Shield is offering an estimated savings of $1.6 million with enrollment assumptions  The HMO is 7.2% less than the Blue Shield PPO  Rate cap of 8.9% (does not include ACA fees)  Anthem is offering an estimated savings of $13.5 million with enrollment assumptions  The HMO is 18.1% less than the Anthem PPO  Rate cap of 11% (ACA fees included)

13 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: Medical RFP Results RFP Questionnaire Summary

14 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 1 Financial Summary - Status Quo

15 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 1 Active Rates Summary - Status Quo

16 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 1 Early Retiree Rates Summary - Status Quo

17 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 2 Financial Summary – HMO & POS

18 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 2 Active Rates Summary - HMO & POS

19 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 2 Early Retiree Rates Summary - HMO & POS

20 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 3 Financial Summary – HMO & PPO

21 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 3 Active Rates Summary – HMO & PPO

22 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results - Scenario 3 Early Retiree Rates Summary – HMO & PPO

23 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results Provider Network Summary Network Analysis shows that there will be some disruption if the County changes medical carriers Blue Shield  Financial  Proposal creates an opportunity for savings in premium  Provider Network  Significant disruption with the Mental Health Network  RX Formulary  Significant disruption with the Pharmacy formulary Anthem  Financial  Proposal creates a greater degree of savings for the two alternative proposals  Provider Network  Disruption is not as significant compared to Blue Shield  Opportunity for additional in-network access due to larger provider network compared to Health Net  RX Formulary  Disruption with Anthem is not as significant as compared to Blue Shield

24 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: RFP Results Provider Network Comparison - Summary Results

25 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 1: Medical RFP Results Potential Next Steps  Based on the results of the RFP marketing, the County should take advantage of the immediate $1.75 million savings with Health Net effective January 1, 2014  This change requires no change in plan structure for the period of January 1 through June 30, 2013  In order to realize the greater savings associated with the Anthem proposals, the County should discuss the plan structure changes with the bargaining units  It will be important to engage the bargaining units in the details related to:  Carrier change  Employee out-of-pocket costs  Network changes  Dual option offering for both options outlined above  It is recommended that discussions begin as soon as possible so that the County can realize savings with either option for the July 2014 renewal

26 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C  On March 23, 2010, President Obama signed the health care reform bill, Patient Protection & Affordable Care Act (ACA), into law  The Key Elements of this bill are: 1.Cover more people 2.Shift control from local state government to federal government 3.Raise money to cover more people  Consequently, the County has already implemented some of the provisions of the ACA:  Cover Dependents to the age of 26  $0 Preventive Care  W-2 reporting – Report the aggregate cost of insurance premiums for employee on the 2012 W2  The cost of Over the Counter drugs no longer reimbursable through the Medical FSA  The limit on Health FSA salary reductions - $2,500 / year  Distribution of uniform Summary of Benefits Coverage (SBC) Section 2: Health Care Reform Update

27 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C  There are three fees associated with the ACA Fees that will be included with the County’s July 1, 2014 Renewal, expected to be between 2% and 3%:  Federal Health Insurance Industry Fee – The ACA imposes a fee on all insurance carriers to help fund the Exchange and is based on market share of premium  Patient Centered Outcomes Research Institute (PCORI) – This fee will fund a private, non-profit corporation whose purpose is to assist providers, payers and policy makers in making informed health decisions  Reinsurance Fee – Insurers are required to contribute to a temporary reinsurance program for the individual market in order to offset the risk of high cost claims (risk shifting)  Employer Shared Responsibility (a.k.a. Pay of Play) – January 1, 2015 – Employers must get ready now!  Employer must offer Affordable health coverage  The plan is affordable if the employee does not pay more than 9.5% of W2 earnings for the single only premium of the lowest cost plan offered by the employer  Health plan must be offered to all employees working an average of 30+ hours a week, 130 hours a month  Coverage must meet Minimum Value standards Section 2: Health Care Reform Update - On the Horizon

28 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C  Health Insurance Exchange/Covered California - January 1, 2014  In general, the Exchange will serve as a government-administered marketplace providing a choice of group and individual health plans through a website that will provide detailed information about plans and offer a toll-free number to assist consumers in understanding their options, compare and buy coverage, as well as connect eligible individuals to federal subsidies  The Exchange will serve as a consortium of individuals and small businesses that will pool their buying power, in theory, to get coverage at lower prices  The Exchange will offer plans in 5 categories, ranging from catastrophic to extensive  Employers will need to distribute a notice to all employees regarding the Exchange in October 2013  Individual Mandates – US Residents must purchase health insurance, or pay an annual increasing schedule of tax penalties – January 1, 2014  2014: $95 per person (capped at $285 per family) or 1 percent of household income  2015: $325 (capped at $975) or 2 percent of household income  2016: $695 (capped at $2,085) or 2.5 percent of household income  2017 and beyond: The $695 penalty is indexed for a cost-of-living adjustment and must be rounded to the next lowest multiple of $50. For families, the flat-dollar penalty is capped at three times the indexed value for an individual. For example, if in 2017 the penalty is $700, the capped amount would be $2,100. As in 2016, the individual mandate penalty is the greater of the flat-dollar amount or 2.5 percent of household income Section 2: Health Care Reform Update - On the Horizon

29 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 Section 2: Health Care Reform Cadillac Tax Who Insurers and TPAs What 40% tax on Excess Premiums Tax = [(Individual premium – premium cap) x 40%] x # singles enrolled + [(Family premium – premium cap) x 40%] x # families enrolled Penalty When 2018 How  Healthcare premiums >$10,200/individual and $27,500/ family are “excessive”  Higher limits for high risk jobs or workforces with older populations  Will be adjusted for inflation (benchmark at FEHB)

30 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 Section 2: Health Care Reform Cadillac Tax Illustration - Estimated Health Plans will be subject to tax in 2018; immediate attention needed

31 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans Overview  Effective January 1, 2015, the County must offer affordable health coverage to all employees working over 30 hours a week  In order to meet this requirement, the County will need to implement a lower cost plan  The County will accomplish this requirement with the introduction of a High Deductible Health Plan (HDHP), which can be offered to all employees as an Account Based Health Plan  An Account Based Health Plan is a plan that combines a qualified High Deductible Health Plan (HDHP) with a Health Savings Account (HSA)  Together, the High Deductible Health Plan and the Health Savings Account can help achieve lower healthcare costs, which ultimately translates into lower premiums for employees and employers  You will also learn how the Health Savings Account may provide certain individuals with the opportunity to:  Save pre-tax dollars  Roll over from year to year  Earn interest  Be invested in the market  And, used as a retirement vehicle after the individual turns 65 and becomes enrolled in Medicare

32 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans What is a High Deductible Health Plan?  The IRS defines certain terms that must be met to be considered a “Qualified High Deductible Health Plan  The terms of a “Qualified” High Deductible Health Plan (HDHP) are as follows:  Insurance that does not cover first dollar medical expenses (including prescription), except for Preventive Care, until the deductible is reached  A plan with minimum Aggregate Deductible for 2014 of:  $1,250 (self-only coverage)*  $2,500 (family coverage)*  Important: Full Family Deductible must be met before plan coinsurance and/or copays kick in  A plan with a maximum annual out-of-pocket (including deductibles and co-pays) for 2014 of:  $6,350 (individual)*  $12,700 (family coverage)*  Can be an HMO, PPO, or indemnity plan, as long as it meets IRS requirements *These amounts are indexed annually by the IRS

33 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans What is a Health Savings Account?  A Health Savings Account (HSA) is a special “tax-advantaged” account owned by an individual that can be used in conjunction with an qualified HDHP  In fact, you must have a qualified High Deductible Health Plan in order to open and contribute to a Health Savings Account  If you are no longer covered by an HDHP in the future, you can still use the funds in the account, you just can no longer contribute  Individuals and/or Employer can put money into the Health Savings Account “pre-tax” (federal level only) to help pay for “Qualified Medical Expenses “  CA does not consider employee or employer contributions to be tax-free  The IRS sets annual limits for the amount of money that can be put into the Health Savings Account:  $3,300 (self-only coverage) for 2014*  $6,550 (family coverage) for 2014*  There is “no use it or lose it” rules like Flexible Spending Arrangements (FSAs)  Unused funds in the account continue to roll over year after year and can earn interest and be invested  Upon turning age 65, the individual can use any unused funds in the account for any purpose, penalty free, but subject to ordinary income tax (*These amounts are indexed annually)

34 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans Simple Illustration An HSA is a tax-advantaged account that works with an HSA-compatible High Deductible Health Plan

35 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans Advantages  High Deductible Health Plan  Lower insurance premiums  Lower trend factors than traditional plans, which translates to lower renewal increases  $0 Preventive Care  Health Savings Account  HSA’s encourage individuals to be more engaged and take on a more empowered approach to their own healthcare  This engagement can lead to smarter utilization and lower healthcare costs  Tax Savings (Federal Level Only)  Account is portable – tied to employee, not the employer  Funds can grow from year to year and earn interest income  Funds can be invested  Potential retirement vehicle, as funds can be used for anything with no penalties

36 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans Disadvantages  High Deductible Health Plan  The Aggregate Deductible must be met before any services are paid (except preventive care)  On a family plan, the full family deductible must be met before plan coinsurance and/or copays kick in  Individuals on this plan are sometimes not used to paying out of pocket costs at the doctors office or the pharmacy  Individuals may experience large out-of-pocket costs if the balance in the Health Savings Account is not enough to cover the expenses  Health Savings Account  Can be complicated to understand, lots of education and communication is required  The individual is responsible for making sure expenses are “qualified”, or penalties can apply  The individual cannot be enrolled in both an FSA and an HSA at the same time, unless the FSA is a Limited Purpose FSA

37 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans Why Offer? HDHP w/ Health Savings Account Price Transparency H.S.A Low Cost *Note: California does not consider employee or employer contributions to an HSA tax free  Lower premium due to Deductible  Preventive Care covered at 100%  Allows Employer/Employee contributions  Tax Free contributions (except CA state)  Unused $$$ Roll-over  Can invest money  Employee owned; portable  Smarter Utilization  Can lead to lower healthcare costs

38 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans Contribution Rules  There are several ways you can contribute to your account:  Pre-tax through employee payroll deductions - Reduces your federal adjusted gross income (the amount you pay tax on)  Employer Contribution – Pre-tax  Post-tax by personal check - When you file your taxes, you can make an adjustment to your gross income to receive the tax benefit  Anyone may contribute to your HSA, provided the total contributions to your HSA do not exceed your maximum allowable annual limit  If you are not covered by a qualified HDHP, you may not contribute to an HSA, but you can spend it down, or leave it to earn interest  If you change jobs to another company and enroll in an HDHP, you may roll over from one HSA account to another  You can make catch-up contributions if you are 55 years of age or older ($1,000)  Contributions must stop once you become entitled to Medicare, but the funds in the HSA can still be used

39 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 3: Account Based Health Plans Distribution Rules  “ Qualified Medical Expense” examples (tax free/no penalty):  Deductibles, Coinsurance, Co-pays  Doctor’s fees, including hospital & lab  Prescription Drugs  Dental, Vision & Hearing services  Chiropractic & Acupuncture  Durable Medical Equipment  Certain OTC medicines, if prescribed by a doctor  Psychiatric care  Weight loss & smoking cessation programs  COBRA Premiums  Medicare Premiums – Special Rules apply  LTC Premiums  It is the Account Holders responsibility to ensure that the funds used from the HSA are for Qualified Medical Expenses, or penalties will apply  Penalties for not using distribution for “Qualified Medical Expenses”:  Amount of distribution is included in income  20% additional tax applies (except when taken after):  Individual dies or becomes disabled  Individual is age 65  Upon the death of an individual, HSA transfers to Spouse tax-free (any other transfer taxed)

40 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 HSA $1,000 employee contribution Preventive Care 100% In-Network After Deductible 10% Coinsurance to the Annual OOP of $3,000 $1,500 Deductible This is your annual $1,500 deductible, but can be reduced by HSA dollars you use for covered services Susan Smith’s HSA Plan $1,500 Deductible $1,000 employee contribution$1,000 Expenses: Ob/Gyn office visit & lab tests - $350 Prescription drugs - $150 $500 Paid by Preventive Care benefit at 100%$350 Paid from HSA (Susan’s choice)$150 HSA Balance$850 Year 1 Meet Susan Smith | Single Coverage Section 3: Account Based Health Plan Overview Plan Illustration Example

41 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 Susan Smith’s HSA Plan $1,500 Deductible HSA Balance:$850 $1,000 employee contribution $1,850 Expenses: Ob/Gyn visit & lab tests - $150 Physician visits - $100 Prescription drugs - $200 $450 Paid by Preventive Care benefit at 100%$150 Paid from HSA (Susan’s choice)$300 HSA Balance$1,550 Year 2 HSA $1,000 employee contribution Preventive Care 100% In-Network After Deductible 10% Coinsurance to the Annual OOP of $3,000 $1,500 Deductible ( This is your annual $1,500 deductible, but can be reduced by HSA dollars you use for covered services) Meet Susan Smith | Single Coverage Section 3: Account Based Health Plan Overview Plan Illustration Example

42 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 The Jones’ HSA Plan $3,000 Deductible $2,000 employee contribution$2,000 Expenses: Preventive visits & lab tests - $500 Physical therapy - $800 Prescription drugs - $200 $1,500 Paid by Preventive Care benefit at 100%$500 Paid from HSA (the Jones’ choice)$1,000 HSA Balance$1,000 Year 1 HSA $2,000 employee contribution Preventive Care 100% In-Network After Deductible 90% Coinsurance up to Annual OOP Max of $6,000 $3,000 Deductible ( This is your annual $3000 deductible, but can be reduced by HSA dollars you use for covered services) Meet the Jones’ | Family Coverage Section 3: Account Based Health Plan Overview Plan Illustration Example

43 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861 The Jones’ HSA Plan $3,000 Deductible HSA Balance: $1,000 $2,000 employee contribution $3,000 Expenses: Preventive visits & lab tests - $500 Hospital and surgery fees - $10,000 Office visits - $500 Prescription drugs - $200 $11,200 Paid by Preventive Care benefit at 100%$500 Remaining balance due$10,700 Paid from HSA (the Jones’ choice) toward $3,000 deductible$3,000 10% Coinsurance paid by Jones’ after Health plan pays 90% $7,700 (90% x $7,700 = $6,930) $770 (10% Coinsurance) Total amount Plan pays$7,430 Total amount Jones’ pay$3,770 HSA Balance$0 Year 2 HSA $2,000 employee contribution Preventive Care 100% In-Network $3,000 Deductible ( This is your annual $3,000 deductible, but can be reduced by HSA dollars you use for covered services) Meet the Jones’ | Family Coverage Section 3: Account Based Health Plan Overview Plan Illustration Example After Deductible 90% Coinsurance up to Annual OOP Max of $6,000

44 © 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C Section 5: Question & Answer


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