1. Consumer Driven Health Plans Mechanicsburg Area School District April 6, 2016

2. Health Care Cost Acceleration
Employers nationwide are struggling to cope with the sharp, upward trend of health care costs; driven by factors including an overall rise in certain conditions which increase utilization, medical inflation and technological advancements in procedures and prescription drugs.
Delayed to 2020, provisions of the Affordable Care Act will require payment of an excise tax on the value of benefits exceeding established thresholds, known as the Cadillac Tax.
To control costs and prepare for the coming Cadillac Tax, many employers are replacing low and zero-deductible health plans with either a High-Deductible PPO or a Qualified Consumer Driven Health Plan.
Consumer Driven Health Plans are designed to facilitate Member engagement and support a better awareness of health care costs and service delivery options through price transparency and cost comparison tools.
*The illustrations presented are a high level comparison of benefits and costs and is an attempt to present coverage features.
The summaries are not a contract and does not include all of the benefits that are included nor does it outline the exclusions and limitations.
You must refer to the Insurance Company proposal and policies themselves for true definitions of coverage, exclusions, and limitations.

3. Consumer Driven Health Plan (CDHP) What is it?
Health Savings Account
Qualified High Deductible
PPO
(QHDHP)
Protects you from large Medical Expenses
Helps pay for Deductible
Pre-tax or Tax-Deductible Deposits
Tax-Deferred Growth
Tax-Free Distributions for Qualified Medical Expenses
*Please refer to detailed footnote on slide 2.

4. Qualified High Deductible PPO
Structured to utilize the same Provider Network and cover the same services as low deductible PPO Plans, such as the current Capital BlueCross offering.
Provides the same deep, negotiated discounts for services performed in-network (allowable amounts).
Requires an established deductible to be satisfied prior to paying benefits, in accordance with 2016 IRS minimums ($1,300 individual/$2,600 family).
Deductible satisfied through medical, prescription drug or combination of both.
Deploys the use of coinsurance (percentage) on medical benefits and copays (flat rate) for prescription drug as mechanisms to provide benefits to Members after the deductible is met.
Covers out-of-network services, but at a significantly lower benefit level.
Offers protection from catastrophic medical events through relatively low out-of-pocket maximums.
*Please refer to detailed footnote on slide 2.

5. Mechanicsburg Area School District PPO HSA Benefit
Deductible is combined to include both Medical and Prescription Drug benefits
Coinsurance refers to the Member liability portion of the network allowable amount for medical services, after the deductible has been satisfied
Preventive services continue to be covered at 100% in-network
Out-of-Pocket Maximum includes deductible, coinsurance and copayments for Medical and Prescription Drug
No separate Prescription Drug Deductible
* For individual policies, the insured must meet the entire individual deductible and out-of-pocket maximum. For policies which cover the insured and one or more
dependents, the entire family deductible must be met first, then any Medical coinsurance or Rx copayments would apply to the family out-of-pocket maximum.

6. Health Savings Accounts (HSA)
Tax-Advantaged account for payment of qualified medical expenses, works in tandem with Qualified High-Deductible Health Plans.
Can be used to pay for qualified medical expenses of Subscriber, Spouse and any Dependents.
Both Employers and Employees can make pre-tax contributions, as either a lump sum or through payroll deduction.
Unused dollars remain in the account year after year. All funds, including employer contributions are owned by the employee and are portable; even upon termination or retirement.
Expenses are paid through debit card or through member reimbursement of pre-tax funds for qualified expenses.
Contributions gain interest and can be invested after an account balance threshold is reached, and earnings are tax-free as long as the money remains in the HSA.
IRS HSA Contribution limits for 2016: $3,350 for individuals, $6,750 for family and an additional $1,000 for subscribers over the age of 55.
*Please refer to detailed footnote on slide 2.

7. Health Savings Account Process Flow
*Please refer to detailed footnote on slide 2.

8. *Please refer to detailed footnote on slide 2.
Eligible Expenses
For a full listing of all eligible medical expenses visit
213(d) Medical Expenses (Medical, Rx, Dental, Vision & Preventive)
COBRA premiums
QLTC premiums (Qualified Long Term Care)
Health premiums while receiving unemployment benefits
If Medicare eligible due to age, health insurance premiums (Medicare Part B, and D, Medicare HMO and participant share of employer-sponsored retiree plans) are eligible, except for Medigap or Medicare supplemental policies.
Ineligible Expenses
If you choose to use your HSA funds for a non-qualified expense, you may be subject to income tax and a 20% penalty. Certain exceptions may apply at age 65, upon disability or death.
*Please refer to detailed footnote on slide 2.

9. Qualified High Deductible PPO + HSA Member Considerations
Is the employee covered by any other non-high deductible health plan or Full Purpose Medical FSA?
Federal guidelines prohibit employees from contributing to a Health Savings Account if they are covered by Medicare, TriCare, CHIP, Full Purpose Medical FSA, or a spouse’s non-CDHP insurance plan.
Note: Once covered by Medicare, you may no longer contribute to the HSA. At the age of 65, you may withdraw HSA funds and use it as you choose. It is counted as income and taxed as such. There is no penalty for withdrawal.
Is the employee participating in a Medical Flexible Spending Account?
Employees cannot participate in an HSA and be eligible for benefits of a Full Purpose Medical FSA, even if eligibility is through a spouse’s benefit package. Members may participate in a Limited Purpose FSA, which only reimburses dental, vision and preventive expenses.
Employees should evaluate expected health expenditures for the year.
Healthier individuals may choose to fund the HSA equal to the deductible or less, while higher utilizers may choose to fund the HSA to the full out-of-pocket maximum.
How much available income do employees have to fund the HSA?
Each year, the IRS sets annual contribution limits for HSAs based on the HDHP coverage level.
Employees may change how much they contribute at any time during the year, without a life event change. The higher the contribution, the greater the tax savings.
Employees should carefully consider funding their HSA to ensure that they can offset Out-of-Pocket costs.
If available funds are limited, participants may incur some debt if faced with any unexpected medical expenses.
*Please refer to detailed footnote on slide 2.

10. Frequently Asked Questions
Q. If my spouse is enrolled in Medicare, can I still contribute to an HSA?
Yes, as long as YOU are NOT enrolled in Medicare, you can contribute to an HSA. You may use the money to pay the cost of qualified medical expenses and other eligible expenses for you and your spouse.
Example: You have an HSA on January 1. Starting July 20, you are covered under Medicare. This means that you are eligible to contribute to an HSA from January through June, and you may prorate how much you can contribute.
Can I use my HSA funds for someone else’s expenses, even if they aren’t on my health plan?
Yes, you may withdraw funds to pay for the qualified medical expenses of yourself, your spouse or a dependent – as long as they are claimed on your tax return. Remember, if your spouse enrolls in a Full Purpose Medical Flexible Spending Account (FSA) through their own employer, you will not be eligible to contribute to an HSA.
Do I pay for the full doctor’s office visit when I go to the doctor?
Generally, No. If you use an in-network provider, you should not pay your doctor at the point-of-service. Your doctor will submit the claim to Capital BlueCross and you will receive an Explanation of Benefits (EOB) showing how much you are responsible for paying. Remember, when you use in-network doctors, you are only responsible to pay the discounted, allowable amount as determined by your insurance benefit.
Q. When I withdraw funds from my HSA, what information do I need to keep?
Save all receipts and records of withdrawals for tax verification, in the event of an audit. If you use your funds for non-health related expenses, you must report those withdrawals accordingly. You – not your employer—are responsible for maintaining all records associated with your HSA.
*Please refer to detailed footnote on slide 2.

11. Questions