City of Racine 2020 High Deductible HSA Compatible Health Plan - PowerPoint PPT Presentation

City of Racine 2020 High Deductible – HSA Compatible Health Plan Overview

Agenda  Benefit Plan Overview  Benefit Plan Considerations  HSA Education & Guidelines  Medicare Advantage Plan Option 2

2020 PROPOSED Health Plan Design For Active and Pre-Medicare Retirees HDHP Plan Network In-Network Out-of-Network Embedded Deductible $3,000 $6,000 Individual $6,000 $12,000 Family Out of Pocket Maximum $4,000 $8,000 Individual $8,000 $16,000 Family 100% 80% Coinsurance Hospitalization 100% after deductible 80% after deductible $200 copay after deductible Emergency Room (waived if admitted) Urgent Care $75 copay after deductible 80% after deductible Telemedicine Benefit $49 copay until deductible is met N/A Office Visit Primary Care $30 copay after deductible 80% after deductible Office Visit Specialist $60 copay after deductible 80% after deductible Preventive 100% no deductible 80% after deductible Prescription Drugs Tier 1 $10 copay after deductible Tier 2 $35 copay after deductible Tier 3 $50 copay after deductible Tier 4 (Specialty Medications) $150 copay after deductible The proposed plan is being recommended by the Finance and Personnel Committee. This will not be addressed by the Common Council until September 17, 2019. 3

2020 PROPOSED Health Plan Design Benefit Plan Considerations: • Current Plan Vendors for medical and prescription drug coverage will remain the same for 2020 (UHC/CVS) • What is covered by the plan is the same. How the plan covers the benefit is different. • The proposed plan is intended to amend Plan 6A and eliminate Plan 7A. • None of these proposed changes apply to or impact anyone on the Medicare Advantage Plan. 4

2020 PROPOSED Health Plan Design Embedded Deductible: • For a family plan, it means that one family member is only responsible for the single deductible (the same concept) applies to the out of pocket maximum amounts. Deductible: $6,000 Family Subscriber: Subscriber: $3,000 in Services $3,000 deductible met. Subcriber pays coinsurance and/or copays toward the out-of-pocket max Spouse: Spouse: $1,000 in Services Deductible not met. 5

Racine Health Clinic Current Cost *ACA Preventive Services require no cost share If on an HSA compatible HDHP LOC OCATI TION: 2333 Northwestern Ave, Racine (Across from Gilmore Middle School; formerly the Kurten Clinic) Hours: s: Monday: 7am - 5pm Tuesday: 7am - 6pm Wednesday: 7am - 6pm Thursday: 8am - 7pm Friday: 7am - 6pm Saturday: 8am - 12pm 6

Racine Health Clinic 7

UHC Virtual Visits 8

UHC Virtual Visits 9

Health Savings Account Education 10

Health Savings Accounts HSAs are used in conjunction with high deductible health plans (HDHPs) • HDHPs can have:  First dollar coverage (no deductible) only for preventive care  Higher out-of-pocket for non-network services • All covered benefits must otherwise apply to the plan deductible, including prescription drugs • If the HDHP provides a prescription drug benefit, prescription drug expenses must be subject to the annual deductible or the individual may not contribute to an HSA. 11

Health Savings Accounts Who is eligible for an HSA? • Any individual who:  Is covered by an HDHP  Is not covered by other health insurance  Is not enrolled in Medicare  Cannot be claimed as a dependent on someone else’s tax return • Children cannot establish their own HSAs • Spouses can establish their own HSAs, if eligible and covered by a qualified HSA compatible High Deductible Health Plan 12

Health Savings Accounts Accounts are owned by the individual (not an employer). The individual decides:  Whether to contribute  How much to use and which qualified medical expenses to pay from the account  Whether to pay for qualified medical expenses from the account or save the account for future use 13

Health Savings Accounts What is an Eligible, or Qualified Medical Expense? Eligible medical expenses are defined by the Internal Revenue Service Tax Code under Section 213(d). The expenses must be primarily to alleviate or prevent a physical or mental defect or illness. Eligible medical expenses can include dental or vision expenses as well as medical costs. Generally speaking, it also includes expenses that apply towards your medical insurance plan’s deductible and out-of-pocket limits. The listing on the following page are examples of eligible and ineligible medical expenses set forth by the IRS. Over time, the IRS is at liberty to change the list of eligible expenses. Please keep this in mind. Also, make sure to consult your tax advisor should you require specific tax advice. 14

Health Savings Accounts Qualified Medical Expenses *this is not an all-inclusive list 15

Health Savings Accounts • No “use it or lose it” rules like with Flexible Spending Arrangements (FSAs) – All amounts in the HSA are fully vested – Unspent balances in accounts remain in the account until spent and can carry over from year to year – Encourages account holders to spend their funds more wisely on their medical care – Encourages account holders to shop around for the best value for their health care dollars • Accounts can grow through investment earnings – Same investment options and investment limitations as IRAs – Same restrictions on self-dealing as with IRAs 16

Health Savings Accounts 17

Health Savings Accounts 2020 PROPOSED HSA Contributions For Active and Pre-Medicare Retirees electing the Health Plan • The City proposes contributing the following amounts to fund HSA accounts based on residency: City Residents Employee Only $1,000 Family $1,500 Non-Residents Employee Only $750 Family $1,000 18

HSA Education 19

Health Savings Accounts Distribution is tax- free if taken for “qualified medical expenses.” (20% penalty if used for unqualified expenses) Qualified medical expenses must be incurred on or after the date on which the HSA was established. “Qualified medical expenses” do not include other health insurance (including premiums for dental or vision care). Some exceptions may apply The HSA account holder should always keep receipts • May need to prove to IRS that distributions from HSA were for medical expenses and not otherwise reimbursed • May be required by insurance company to prove that HDHP deductible was met • Not all medical expenses paid out of the HSA have to be charged against the deductible (for example, dental care and vision care) 20

Questions? 21