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Glastonbury Public Schools May 6, 2013 Presenter: Josh Steffenson All sample values and calculations are according to GEA negotiated benefits. Dollar amounts for other bargaining units will vary. © GEA 2013
An account that you own. Both you and your employer make contributions to this account to pay for current and future medical expenses. This account is used in conjunction with a high deductible health plan (HDHP) – The HDHP is your ‘insurance’ plan. © GEA 2013
Tax free dollars on: Contributions, Investment Earnings, and Withdrawals for qualified medical expenses. Reduced health care premiums. Rewarded for staying healthy. Dollars not used toward deductible can be used for qualified medical expenses. Your health care is exactly the same, the only thing that changes is the way you pay. © GEA 2013
Traditional Insurance Each employee pays a percent of the cost of the premium. (Ex: GEA 2013/14 – 18.5%) Each employee pays a respective ‘copay’ for services. HDHP / HSA Each employee pays a percent of the cost of the premium. (Ex: GEA 2013/2014 – 15%) Each employee pays the full cost of every service until their deductible is met. © GEA 2013
HDHP (Anthem) - Family Traditional (PPO) - Family Per paycheck contribution: $150.14 Annual contribution (20 paychecks): $3002.80 Board Contribution to HSA (GEA: 75% of deductible) - $3750 Deductible: $5000 – No copays ever – Out of pocket maximum $1250 Per paycheck contribution: $230.24 Annual contribution (20 paychecks): $4604.80 Varying copays for each respective service. © GEA 2013
Employer contribution to HSA, both amount and date(s) of contribution are a negotiated benefit. © GEA 2013
HDHP (Anthem) - Family Traditional (PPO) - Family Annual contribution (20 paychecks): $3002.80 At most, $1250 toward your deductible. TOTAL: $4252.80 (This is the max amount. You will only pay this much if you reach your deductible). Note: Your contribution to HSA is tax free, potentially reducing the actual total cost. Annual contribution (20 paychecks): $4604.80 + copays ($20 Office Visit, $250 Inpatient, etc) TOTAL: $4604.80 + Copay total. Note: This cost is $352 more than the HDHP option and does not include copay costs and HSA tax savings. © GEA 2013
Office Visits Prescription Medicines Emergency Room Visit Medical Testing / Laboratory Work Inpatient Admission Outpatient Treatment Mental Health / Substance Abuse Treatment Well visits and preventative treatment (physicals, mammograms, vision testing, etc.) DO NOT cost anything, but therefore do not count toward meeting your deductible. © GEA 2013
Enroll in your high deductible health plan (HDHP) Establish an HSA at a qualified financial institution. (You choose your bank). Choose how much to contribute to your HSA. (One time payment, payroll deduction, etc.) Start receiving care. Show insurance card at first visit. Receive explanation of benefits AND bill from service provider. Pay via debit card or check assigned to your HSA. (Make sure EOB and bill match.) Keep track of your expenses for tax return or in case of IRS audit. Funds roll over from year to year Resources are available to assist you. (Employer, Anthem / ConnectiCare, Financial Institution, Accountant.) Switch jobs? Take your HSA account with you. © GEA 2013
Remember: Funds roll over from year to year and accrue interest / may be invested. IRS Publication 502 provides complete list of qualified medical expenses. http://www.irs.gov/pub/irs-pdf/p502.pdf Common uses of HSA funds include: Eyeglasses, Laser Eye Surgery, Braces, Dental Work, Post Retirement Insurance Premiums / Medical Care. © GEA 2013
Lowest employee premium cost. Operates as an ‘open HMO.’ – No referrals are necessary if within network. Out of network treatment only possibly with ConnectiCare’s authorization. Provides out of network benefits. Out of network treatment is subject to a cost share, up to an annual maximum dollar amount. Medical ‘Centers for Excellence’ are considered in-network. © GEA 2013
Appendix A - Sample Anthem Explanation of Benefits Appendix B – Choosing a financial institution for your HSA account. Appendix C - IRS Rules for HSA contributions. Appendix D – Calculated Employee Savings if full deductible is met. Appendix E – Sample Scenario – 4 Person Family – Deductible Met - Anthem Appendix F – Sample Scenario – Single Coverage – Deductible Not Met - ConnectiCare © GEA 2013
This is a sample document. The document you will receive will vary, but be of the same nature. Appendix A © GEA 2013
You may select a financial institution of your choice. When choosing a bank consider the following: Accessibility – Consider a bank with locations close to home/work so that you may easily deposit / withdraw funds. Payment Methods – Some banks offer checking accounts, debit cards or both as means of paying your medical bills. Service Fees – Banks may charge a small monthly or annual service fee to your account. Make sure you are aware of any fees before establishing your account. Most banks provide information about their HSA accounts online. Additionally the business office can offer assistance in selecting a bank. Appendix B © GEA 2013
The IRS has established maximum contribution amounts to an HSA for 2013. This includes contributions from all sources (employer, self, other). Contributions beyond the maximum are taxable as income and subject to a penalty. Maximum Contribution Additional Allowable Contribution if Age 55+ Single Plan$3250+$1000 2 Person / Family$6450+$1000 or +$2000 if both over age 55 Although your year for deductible purposes runs from July through June, these contribution maximums are for calendar year 2013. Appendix C © GEA 2013
Current PlanHDHP PlanSingle2 PersonFamily Anthem PPOAnthem-$31.80+$41.40+$352.00 Anthem HMOAnthem+$71.40+$268.00+$630.20 C.Care HMOC.Care+$199.00+$546.20+$974.40 Anthem PPOC.Care+$336.20+$845.60+$1345.20 Note: These values do not include the income tax savings you will receive for contributions to your HSA. You do not need to itemize your deductions for HSA contributions to reduce your tax burden. Additionally, these values do not include the various copays you would have incurred while reaching your deductible. This, combined with tax benefits, will ensure that all plans have guaranteed savings for teachers over current non HDHP options. Appendix D © GEA 2013
Employee Spouse 3 Dr. visits @ $150 = $450 12 Rx @ $75 = $900 Total = $1,350 2 Dr. visits @ $150 = $300 12 Rx @ $50 = $600 1 X-Ray @375 Total = $1275 Child 1 2 Dr. visits @ $150 = $300 2 Specialist visits @ $220 = $440 Laboratory Work $550 3 Rx @ $75 = $225 Total = $1215 Appendix E © GEA 2013
Child 2 Family Total 2 Dr. visits @ $150 = $300 1 Emergency Room @ $875 2 Rx @ $75 = $150 Total = $1325 Employee + Spouse + Child 1 + Child 2 = $5165 Deductible = $5000 (You pay $5000 only) Savings Premium savings ($352 vs. Anthem PPO) Tax savings (Income tax savings on $1250 contribution to HSA) Savings from 41 copays not incurred. Appendix E © GEA 2013
Employee Total / Savings 2 Dr. visits @ $150 = $300 12 Rx @ $ 60 = $720 Total = $920 Employee Total = $920 You pay full $920 (Deductible of $2500 not met). Premium savings ($199 C.Care HMO vs. HDHP with employee making $625 contribution to HSA) Tax savings (Income tax savings on $625 contribution to HSA) Savings from 14 copays not incurred. Remaining $1580 in HSA rolls over to next year and is yours to keep. – Employer makes annual contribution of $1875 again on July 1 (GEA only) Appendix F © GEA 2013
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