Consumer Driven Health Plans Pennsylvania College of Technology - PowerPoint PPT Presentation

Consumer Driven Health Plans Pennsylvania College of Technology March, 2016

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.  Recently 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.  Plans that foster consumerism among membership through the application of deductibles have been proven to decelerate the current cost trend.  To control costs and prepare for the coming Cadillac Tax, many employers are replacing zero- deductible health plans with either a high-deductible PPO or a Qualified Consumer Driven Health Plan. *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. 2

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

High Deductible PPO (QHDHP)  Utilizes the same Provider Network and covers the same services as low deductible PPO Plans, such as C and E.  Provides 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 event through relatively low out-of-pocket maximums. 4 *Please refer to detailed footnote on slide 2.

QHDHP Benefit Summary QHDHP-1  Utilizing Blue Cross network Benefits Network Out-of-Network providers greatly reduces Individual Deductible $1,300 $2,500 Family Deductible $2,600 $5,000 deductible liability for the Member, Coinsurance (Medical) 10% 30% while providing double the out-of- Primary Care/Emergency pocket protection PCP Visit 10% 30% Specialist Visit 10% 30%  Coinsurance (10%) refers to the Emergency Care 10% 30% Member liability portion of the Urgent Care 10% 30% Radiology network allowable amount for MRI, Advanced Imaging 10% 30% medical services, after the Diagnostic (Lab, X-ray) 10% 30% deductible has been satisfied. Preventive Services Annual Preventive Exam No charge 30%  Preventive services continue to be Preventive Mammogram No charge 30% covered at 100% in-network Childhood Immunizations No charge 30% Prescription Drug  No separate Prescription Drug Deductible Subject to Medical Deductible Retail Mail Order Out-of-Network Deductible Generic $10 $20 Not Covered Brand Formulary $25 $62.50 Not Covered  Mail Order offers significant savings Brand Non-Formulary $50 $150 Not Covered (up to 33%) and convenience for Annual Out-of-Pocket Maximums maintenance medications Out-of-Pocket: Individual* $2,000 $4,000 Out-of-Pocket: Family* $4,000 $8,000 1 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. 5 *Please refer to detailed footnote on slide 2.

What About That Deductible? 6 *Please refer to detailed footnote on slide 2.

What About That Deductible? Employer Contribution Plan Year Individual Plans Family Plans 2016/2017 $950 $1,900 2017/2018 $650 $1,300 The College will fund at least 50% of the Plan deductible in the next two Plan years. 7 *Please refer to detailed footnote on slide 2.

Health Savings Accounts (HSA)  Tax-Preferred 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 lump sum or through payroll deduction.  All funds, including employer contributions are owned by the employee and are portable; even upon termination.  Expenses are paid through debit card or via member reimbursement of pre-tax funds.  Unused funds rollover year after year and can provide security against catastrophic losses.  Contributions gain interest and can be invested after an account balance threshold is reached.  IRS HSA Contribution limits for 2016: $3,350 for individuals, $6,750 for family and additional $1,000 for subscribers over the age of 55. 8 *Please refer to detailed footnote on slide 2.

Eligible Expenses  For a full listing of all eligible medical expenses visit http://www.irs.gov/publications/p502/index.html  213(d) Medical Expenses (Medical, 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 are eligible, except medical supplement policies (Medi-gap). Ineligible Expenses  If you choose to use your HSA funds for a non-qualified expense, you may be subject to a 20% penalty. Certain exceptions may apply at age 65, upon disability, or death. 9 *Please refer to detailed footnote on slide 2.

A Tale of Two Cards The Plan ID card identifies you as a member of the QHDHP-1 Plan. This card should be presented each time you visit a provider or fill a prescription. The HSA Debit Card should only be used after a claim has been processed through the Plan, to pay for any out-of-pocket expenses. 10 *Please refer to detailed footnote on slide 2.

Using your HSA Card for Providers Member goes to If the deductible provider and, Member utilizes has not been presents new ID Provider HSA funds to satisfied, the card (Highmark). processes claim pay provider via provider is Generally, and sends to Discovery notified and a member will not Highmark. Website or with bill*is sent to pay anything at HSA Debit Card. the member. office visit. *The provider bill should reflect all member liability including deductible and/or coinsurance responsibility when deductible has been met. Invoices will reflect discounted amounts negotiated by Highmark. 11 *Please refer to detailed footnote on slide 2.

Using your HSA Card at Pharmacy Pharmacy If the deductible Member goes to processes claim has not been Member utilizes pharmacy to fill and has instant satisfied, the HSA funds to a prescription access to member is pay pharmacy and presents member responsible for with the HSA new ID card deductible discounted cost Debit Card. (Highmark). information. of Rx*. *Once the deductible is satisfied, the member may also use HSA funds to pay any Rx copayment responsibility with the HSA Debit Card. 12 *Please refer to detailed footnote on slide 2.

Sample HSA Payroll Contributions Based on 26 Pay Periods Amounts in BLUE are the maximum Annual Contribution Bi-Weekly Contribution Employee contributions to an HSA for 2016. Both Employer and Employee $4,850 $186.54 contributions count towards the annual $2,500 $96.15 maximums allowed by the IRS: $2,100 $80.77 Employee Only: $2,400 $1,750 $67.31 Family (Employee + 1): $4,850 $1,500 $57.69 $2,400 $92.31 Amounts in GOLD are the levels needed to fully fund your HSA account to cover $1,250 $48.08 2016 Out-of-Pocket expenses. $1,050 $40.38 Employee Only: $1,050 $1,000 $38.46 Family (Employee + 1): $2,100 $500 $19.23 $250 $9.62 If you turn age 55 during the benefit period, the IRS says you can catch-up on your contributions. Remember your contributions They allow an additional $1,000 to be are deposited tax-free! contributed annually. 13 *Please refer to detailed footnote on slide 2.