2018 Healthcare Insurance Options Retirement Savings Accounts October 2017
Affordable Care Act Refresher The Affordable Care Act (ACA) expanded health coverage through a series of provisions starting in 2014 Individual Mandate: Mandated all Americans, with some exceptions, to maintain a minimum level of health coverage or face a tax Insurance Exchanges: Created health insurance exchanges and provides premium tax credits to assist eligible individuals with the purchase of coverage Medicaid Expansion: Allowed states to expand Medicaid up to 133% of federal poverty level Employer Mandate: Mandated employers with 50 or more full-time equivalents to offer coverage to full-time employees and their dependents Page 2
Individual Mandate ACA requires U.S. citizens and legal residents to have qualified health coverage Get coverage through their employer Buy an individual market plan through either: • The individual market exchange • The off-exchange or private exchange market Obtain coverage from the Government (e.g. Medicaid, Medicare, TRICARE) Go uninsured and pay penalties (unless you qualify for a hardship exemption) • Penalty is the greater of $695 adjusted for inflation (plus $347.50/child up to a maximum of $2,085 each adjusted for inflation) or 2.5% taxable income (above tax filing threshold) Page 3
Hardship Exemptions ACA regulations provide hardship exemptions for those individuals residing in states that have not expanded Medicaid (like Texas). If the individual qualifies, there will be no individual penalty. Nine hardship categories • Individuals who cannot afford coverage (2018: 8.05% of household income); • Taxpayers with income below the filing threshold; • Members of Indian tribes; • Hardship (e.g. homeless, foreclosure, unpaid medical, bankruptcy, others); • Individuals who experience short coverage gaps; • Religious conscience; • Members of a health care sharing ministry; • Incarcerated individuals; and • Individuals who are not lawfully present Page 4
MMS Medical Plan Choices MMS worked with the Episcopal Church Medical Trust to provide full time employees who have completed their probation with several medical plan choices: High Deductible (“Consumer Directed”) Health Plans • Anthem BCBS CDHP 40 / HSA • Cigna CDHP 20 / HSA (2018 only) • Anthem BCBS CDHP 20 / HSA (starting in 2018) Low Deductible Health Plans • Anthem BCBS EPO 80 • Anthem BCBS PPO 70 Silver • Anthem BCBS PPO 75/50 • Anthem BCBS PPO 90/70 • Cigna Open Access Plus • Anthem BCBS BlueCard PPO 70 • Anthem BCBS BlueCard PPO 80 • Anthem BCBS BlueCard PPO 90 Only High Deductible Plans qualify for tax advantaged Health Saving Accounts Page 5
All Plans – Routine and Preventive Care $0 Copay Network Benefits include covered services received in a physician’s office such as: • Routine exams • Well-Woman and Well-Man exams • Routine exam X-rays and lab services • Well-Child checkups • Immunizations • Other Routine Services Page 6
Cigna and Anthem BCBS CDHD Plans at a glance Cigna CDHP20 / HSA Anthem BCBS CDHP 40 / HSA Anthem BCBS CDHP 20 / HSA Plan Provision Network Out-of-Network Network Out-of-Network Annual deductible $2,700 / $5,450 $3,000 / $6,000 $3,500 / $7,000 $7,000 / $14,000 Annual coinsurance $1,500 / $3,000 $4,000 / $7,000 $2,500 / $5,000 $3,000 / $6,000 max Annual OOP max $4,200 / $8,450 $7,000 / $13,000 $6,000 / $12,000 $10,000 / $20,000 $0 Preventive $0 Preventive Office visit 20% (PCP or 45% 40% (PCP or 400% Specialist) Specialist) 20% 20% 40% 60% Urgent care 20% 20% 40% 40% Emergency room Inpatient hospital 20% 45% 40% 60% Outpatient surgery 20% 45% 40% 60% Page 7
What are Health Savings Accounts Tax-advantaged savings account for qualified healthcare expenses Employee sets up the account and owns it Balances accumulate and roll over year after year Portable from employer to employer Acts like an IRA or 401(k) for healthcare expenses May be invested Account must be held by a qualified trustee Anyone can make a contribution to employee’s Health Savings Account on an annual basis Page 8
What are Health Savings Accounts (con’t) IRS sets annual limits on contributions: • $3,450 single / $6,900 family for 2018 (2017: $3,400 / $6,750) • Catch-up contributions after age 55 of $1,000 Deadline for contributions – April 15 th of following year • • Employee is responsible to ensure the maximum is not exceeded May be set up by individuals who: • Are covered by a qualifying High Deductible Health Plan • Are not covered by other health insurance (with few specific exceptions) • Cannot be claimed as a dependent on someone else’s tax return • Are not eligible for Medicare Page 9
Additional Benefits – Pharmaceuticals Cigna CDHP 20 / HSA or Express Scripts Standard Anthem BCBS CDHP-40 / HSA Anthem BCBS CDHP 20 / HSA Retail Mail Order Retail and Mail Order Retail and Mail Order $2,700 per person $3,500 per person Annual Prescription Deductible $50 per person None $5,450 per family $7,000 per family (in-network) (combined with medical deductible) (combined with medical deductible) In-Network In-Network In-Network $4,200 Individual / $8,450 Family $6,000 Individual / $12,000 Family Annual Prescription Out-of-Pocket $2,500 Individual/$5,000 Family Out-of-Network Out-of-Network Maximum (includes deductible) Out-of-Network $7,000 Individual / $13,000 Family $10,000 Individual / $20,000 Family $2,500 Individual/$5,000 Family (combined with medical (combined with medical out-of-pocket maximum) out-of-pocket maximum) Tier 1: Generic Up to a $10 copay Up to a $25 copay You pay 15% after deductible You pay 15% after deductible Tier 2: Preferred Brand Name Up to a $40 copay Up to a $100 copay You pay 25% after deductible You pay 25% after deductible Tier 3: Non-Preferred Brand Name Up to a $80 copay Up to a $200 copay You pay 50% after deductible You pay 50% after deductible Up to a 30-day supply (retail) or 90- Up to a 30-day supply (retail) or 90- Dispensing Limits Per Copayment Up to a 30-day supply Up to a 90-day supply day supply (mail order) day supply (mail order) Page 10
Additional Benefits – EyeMed Vision Care Plan Provision Network Out-of-Network Eye Exam You pay $0 Plan pays up to $30 Lenses Plan pays up to Single vision $32 Bifocal $46 You pay $10 Trifocal $57 Frames $150 allowance, 20% off Plan pays up to $47 balance over $150 Contact Lenses Conventional $150 allowance, Plan pays up to $100 15% off balance over $150 Contact Lenses $150 allowance, then you pay Disposable Plan pays up to $100 balance over $150 Page 11
MMS 2018 Contributions Whichever of these health insurance plans you select, MMS will contribute $4,400/year (2017: $4,000; 2014-16: $3,600) to the premiums for yourself and your family If you select one of the High Deductible Plans, MMS will match your contributions to your Health Savings Account up to $1,200/year (2016-7: $1,200/year; 2015: $900/year; 2014: $600/year) You can also make additional contributions to your Health Savings Account (not matched by MMS) by payroll deduction Your contributions to your Health Savings Account are pre-tax (reduce your taxes by lowering your taxable income by the amount of your contributions) Page 12
2018 Medical and Dental Rates Monthly plan premiums Remember! • Whichever of these health insurance plans you select, MMS will contribute $4,400/year (~$367/month) to your premiums • If you select one of the High Deductible Plans, MMS will also match your contributions to your Health Savings account up to $1,200/year ($100/month) Page 13
Some Math Let’s assume in 2018 you: • Are not 26 or less years of age and covered under your parent’s plan • Are not married and covered under your spouse’s plan • Do not meet any of the hardship criteria • Have not obtained coverage from the Government (e.g. Medicaid, TRICARE) • Have not purchased health insurance privately or through an exchange Then you will pay a tax penalty equal to the greater of $695 (inflation adjusted ) or 2.5% taxable income (above tax filing threshold) and you will have no health insurance Alternatively, let’s assume in 2018 you: • Enroll in the Anthem BCBS CDHP 40 / HSA • Match MMS’s contribution to your Health Savings Account Then your out-of-pocket will be $2,728 ($1,528 premiums and $1,200 Health Savings Account contributions) but you will receive: Health insurance (including free check ups and eye care benefits) A health savings account worth $2,400 Lower taxable salary (for income tax purposes) by $2,728 (may impact EITC) Even if you never use the insurance, your net benefit for enrolling will be at least $367 ($695 (inflation adjusted) minus the difference between $2,728 and $2,400) AND LIKELY MORE (depending upon your tax situation) Page 14
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