2015 Medical Plan Options, Health Savings Accounts & Flexible Spending Presented to: Presented By: Greg Biese Vice President, Senior Benefits Consultant Associated Financial Group Employee Benefits. Insurance. HR Solutions.

HealthCare Reform: Yesterday, Today & Tomorrow ● Individual Mandate ● Private Exchanges ● Medicaid Expansion ● Play or Pay (Employer Mandate) ● Wellness Incentives ● Government Reporting ● Medical Access Cadillac Tax Rules Plan Design Fees St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

2015 Medical Eligibility & Rates St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

2015 Benefit highlights (1) IMPORTANT HSA PLAN NOTICE: No individual family member's deductible or out-of-pocket is considered satisfied until the Full-Family deductible and out-of-pocket has been met. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

2015 Benefit highlights (cont.) St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

PPO plan effective January 1, 2015 Preventive services unchanged All medical and Rx copays (1) apply to maximum out-of-pocket Deductible and maximum out-of-pocket increase Costs New generics drugs Prescription drug plan design unchanged UMR Contraceptive coverage outside of plan (1) Due to Health Care Reform changes, beginning in 2015, all copays, including pharmacy copays, will apply to the out-of-pocket maximum. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Certain services can be done for preventive or diagnostic reasons. Preventive Services Certain services can be done for preventive or diagnostic reasons. Covered preventive services performed specifically for preventive screening with no known symptoms, illnesses or history are generally covered as preventive care, subject to age and gender guidelines and health status. Associated Bank is the designated HSA custodian for employer sponsored medical plans. Associated Bank will provide a bank account for contributions to be deposited. Along with the account you will receive information about how the account will be managed along with online and telephonic banking. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Diagnostic Services Diagnostic services are generally not covered under the preventive care benefit but may be covered under another portion of your medical benefit plan. Services are considered diagnostic when a person: Has abnormalities found on previous preventive or diagnostic services that require further diagnostic services; or Had abnormalities found on previous preventive or diagnostic services that would recommend a repeat of the same service within a shortened time period from the recommended preventive screening time period based on age and gender; or Had a symptom(s) that required further diagnosis St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

HSA What Exactly is an HSA? PART 1: HIGH DEDUCTIBLE HEALTH PLAN (HDHP) Intended to cover serious illness or injury once the deductible is met. HSA PART 2: HEALTH SAVINGS ACCOUNT (HSA) Used to cover expenses until the deductible is met. TWO PARTS TO AN HSA To simplify that definition, let’s look at in through this flow chart. An HSA is actually made up of two parts: The first part is the health plan itself. In order to have an HSA, you must be covered by a qualified high deductible health plan (often called an HDHP) which is intended to cover serious illnesses or injuries once you have paid the high deductible. An HDHP generally costs less than what traditional health care coverage costs, so the money that you save on insurance can therefore be put into the Health Savings Account. The second is the Health Savings Account itself. Money in the HSA is used to cover small routine expenses until the deductible is met. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Important Information Regarding Your HSa / High Deductible Health Plan (HDHP) There are NO office visit, emergency room, or prescription drug copays. All out-of-pocket expenses count towards the deductible out-of-pocket maximum. The preventive healthcare benefit is still covered at 100% (all participants); includes services under the Women’s Care Act. Does not include contraceptive services. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Important Information Regarding Your HSa / High Deductible Health Plan (HDHP) The deductible and coinsurance out-of-pocket maximum for family is a true family deductible and out-of-pocket maximum. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Who is Eligible for HSA’s? Any employee that: Is covered by an HDHP Is not covered by another non-HDHP health plan Is not enrolled in Medicare Cannot be claimed as a dependent on someone else’s tax return Simply defined, a health savings account (HSA), is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health Plan (HDHP). Think of it like an IRA for your healthcare. You set aside money in a HSA to pay for eligible out-of-pocket healthcare expenses. You pay all your medical costs until you reach your deductible, but you can use your HSA to reimburse yourself for these costs. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Advantages of an HSA Ownership - you own the funds in your HSA Tax-free Portable No “use it or lose it” You may change your employee contribution amount throughout the year. You can choose to invest your savings in an investment account. One of the most significant advantages of owning a HSA is any contributions made to the account and funds accumulated are owned by the individual (not the employer). With that, the individual decides: Whether he or she should contribute How much to use for medical expenses Which medical expenses to pay from the account Whether to pay for medical expenses from the account or save the account for future us Contributions are not subject to withholding for federal income tax. However, as previously mentioned, taxation varies by state. Account distributions are tax free when used for qualified medical expenses. The HSA is portable. This means you take the account with you. For example, if an employee leaves and goes to another employer that offers a High Deductible Health Plan, they can have their employer start contributing to their account. When the employee is not covered by a HDHP but still has a HSA, they can use the funds for medical expenses. Unlike Health Care Flexible Spending Accounts, there are no use it or lose it rules. This feature allows the account holder to rollover the account balance year after year. The HSA is interest bearing both within the account and via the long term investment options. Finally, as you look across the plan options offered by your employer, you will notice the High Deductible Health Plan has the lowest premium. While this is an advantage, you will want to make sure you understand how the plan works, because if you need to use Health Care you will have a higher deductible to satisfy before any benefits are paid by the plan. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

HSA Annual Contributions – 2014 Annual contributions to the HSA are limited to $3,300 single / $6,540 family (2015 will be released in late summer) Benefits are subject to federal regulations Deductibles, out-of-pocket and contribution maximums are determined annually Account holders age 55 and up may make additional contributions of $1,000 in 2014. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Contributing to Your HSA You can elect how much money you want to put into your HSA. It is your responsibility to ensure that you do not exceed the maximum HSA contribution limit. Your employer will deduct this amount on the date of each payroll on a pre-tax basis and the money will be direct-deposited to your HSA account. You may also deposit funds directly into your bank account with post-tax dollars and claim the amount on your tax return. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Who Determines Whether HSA Distributions are Used Exclusively for Qualified Medical Expenses? YOU! Your bank will submit information to the IRS each year to report contributions and withdrawals. You will need to report withdrawals on your federal income tax forms. Individuals who establish HSAs should maintain records of their medical expenses to show that the distributions have been made exclusively for qualified medical expenses. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

HSA Withdrawals/Distributions Federal tax treatment of funds used: HSA Withdrawals are always Federal tax free for qualified medical expenses, and are so at any age. After age 65, you can use the funds for non-qualified medical expenses without a penalty, but you the money will be taxed. If you use your HSA funds for non-qualified medical expenses before age 65, not only will the funds be taxed, but you will also pay a 10% penalty. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Eligible Medical Expenses for Tax-Free Distributions Qualifying medical expenses - IRS Publication 502 Dental and vision care expenses Long-term care insurance Premiums for coverage while receiving unemployment compensation St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Bank Information At the end of the year, the bank will send each account beneficiary a statement with the fair market value of the HSA and forms with the total contributions and distributions: Form 1099-SA (distributions) Form 5498-SA (contributions, rollover deposits and fair market value for each calendar year) This information is reported to the IRS. You will need to complete form 8889 and file with your personal income tax return. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Ways to Be a More Cost Conscious Consumer of Health Care Get Healthy and Stay Healthy! Use Appropriate ‘Levels of Care’ – Fast Care/Urgent Care/Emergency Room Use In-Network Providers Consider Generic or Mail Order prescriptions Consider $4 Generic Programs at Target & Wal-Mart Stores Ask doctors and pharmacists questions Most effective treatment Cost of treatment Alternatives to treatment Support and participate in company sponsored wellness and disease management initiatives St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Convenience – Walk-In Care Clinic Levels of Care Sample COST $500+ $200+ $125+ $49-$69 $0 Emergency Room Complex chest pain, trauma Available extended hours & weekends Urgent Care Clinic Sprains, strains, sutures; typically hospital-based Available extended hours & weekends Primary Care Provider Wellness/preventive/screening services, comprehensive management of acute and chronic conditions Available extended hours & weekends in some cases Convenience – Walk-In Care Clinic Colds, flu, quick service Available extended hours & weekends Nurse Line Health and first aid questions, premium provider search, guidance on appropriate facility and location to meet care needs No Cost Available 24/7 St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Prescription Cost and Savings Opportunities - $4 Prescriptions WHAT IS IT? Many retail pharmacies have recently created new and innovative programs to help control prescription drug costs for consumers. One of the most popular is the $4 prescription drug program, which has allowed consumers to take advantage of tremendous savings for their everyday prescriptions needs. This program is offered at many national and regional pharmacies, including those shown above, and typically includes hundreds of medications in a variety of therapeutic classifications. Other programs that may be available in your area may include free antibiotics and various 90-day supply discounts for maintenance medications. Many pharmacies also have low-cost membership programs that allow you to access significant savings. It is likely that there will be new programs and enhancements to existing programs in the future as pharmacies continue to compete for the right to fill your prescriptions. Interaction with insurance - continue to provide your insurance information to ensure you receive the deepest discount and that your coinsurance is applied to your deductible and/or out-of-pocket maximum. If your insurance company has negotiated a deeper discount than $4 (or the pharmacy’s discount rate) for the prescribed medication, you will be charged the lesser of the two prices. KEEP MONEY IN YOUR BANK! 21 St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Health Savings Accounts (HSA) and Flex Spending Accounts (FSA) One of the qualifications to have an HSA is that you are not covered by any other low deductible insurance – this includes an FSA. Therefore, if you enroll in the HDHP Plan and open an HSA Account, you may not participate in a Standard FSA Plan. However, you may enroll in a Limited FSA which can be used to reimburse Dental & Vision expenses ONLY. Effective 1.1.15 You may still participate in the dependent care account. One of the most significant advantages of owning a HSA is any contributions made to the account and funds accumulated are owned by the individual (not the employer). With that, the individual decides: Whether he or she should contribute How much to use for medical expenses Which medical expenses to pay from the account Whether to pay for medical expenses from the account or save the account for future us Contributions are not subject to withholding for federal income tax. However, as previously mentioned, taxation varies by state. Account distributions are tax free when used for qualified medical expenses. The HSA is portable. This means you take the account with you. For example, if an employee leaves and goes to another employer that offers a High Deductible Health Plan, they can have their employer start contributing to their account. When the employee is not covered by a HDHP but still has a HSA, they can use the funds for medical expenses. Unlike Health Care Flexible Spending Accounts, there are no use it or lose it rules. This feature allows the account holder to rollover the account balance year after year. The HSA is interest bearing both within the account and via the long term investment options. Finally, as you look across the plan options offered by your employer, you will notice the High Deductible Health Plan has the lowest premium. While this is an advantage, you will want to make sure you understand how the plan works, because if you need to use Health Care you will have a higher deductible to satisfy before any benefits are paid by the plan. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Flexible Spending Account (FSA) Update New Plan Administrator 9.1.2014 Employee Benefits Corporation (EBC) will replace M&I (BMO Harris) as your FSA Administrator Your current FSA plan year will end on 8.31.2014. Please continue to submit all claims to M&I (BMO Harris) for reimbursement. You will have 90 days after the end of the current plan year to submit claims incurred between 9.1.2013 through 8.31.2014. We will running a ‘short’ plan year (9.1.2014 to 12.31.2014) Your next plan year will start on January 1, 2015 What does this mean for you? Enrollment Forms will be required effective 9.1.2014 and then again effective 1.1.2015 St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

FSA Short Plan Year (9.1.2014 – 12.31.2014) The short-plan year (4 months) will allow you to submit claims incurred between 9.1.2014 and 12.31.2014. Please keep in mind the following: The Health Care FSA maximum for the ‘short plan year’ must be pro-rated. Participants will be allowed to contribute 1/4th of the annual limit of $2,500. 1/4th of the Annual Limit is $833.33 The Dependent Care FSA limit is $5,000 per calendar year. To calculate your allowable amount subtract your 2014 contributions (January 1st - through August 31st ) from the $5,000 annual limit. Example 1: Between January 1st – August 31st, Jane Smith contributed $4,000 to her Dependent Care FSA account. She may contribute an additional $1,000 to her Dependent Care FSA between 9.1.2014 – 12.31.2014 Example 2: Jane Smith did not participate in the Dependent FSA in the 2013-2014 Plan Year. She may contribute up to $5,000 to her Dependent Care FSA account between 9.1.2014 – 12.31.2014 . Jesse will be sending additional communication regarding these changes to the SNC community in May 2014. St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

EBC Features: Submitting claims is EASY My Mobile Account Assistant For Android and iPhone Camera scans documentation Upload with claim information Receive notification when a claim is processed Use the app to review FSA account information Submit claims online or using paper My Account Assistant Your secure web portal lets you review all aspects of your account online at www.ebcflex.com Submit claims and documentation Claim Form Mail or fax a paper form with attached documentation St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx

Questions? St. Norbert College/14/Misc/2015 Plan Options & HSA Education.pptx