HOW DO PATI TIENTS SEL ELECT T A HOSPITAL? HDHP HSA PPO Health Plan Basics Presented by, Laurie Leggett AssuredPartners IL
What is an HSA? HSA stands for Health Savings Account A health savings account (HSA) is a tax-advantaged medical savings account available to employees that are enrolled in a high-deductible health plan (HDHP). The HSA works in conjunction with the HDHP. Further, formerly known as SelectAccount, is the banking institution currently used by WCSD 33 to administer HSA funds. The health savings account, which is a bank account, is opened under the employee’s name and therefore belongs to the employee. In the event the employee should leave the company, their HSA goes with them. 2
How does the HDHP HSA PPO work? ▪ You open a Health Savings Account with Further, formerly known as SelectAccount. ▪ You decide if you want to put money into the bank account. This is referred to as “contributing funds” to your HSA. ▪ If you decide that you want to contribute funds to the account, you can arrange to have it payroll deducted, on a pre-tax basis, into your account. ▪ You can then use your HSA dollars to help pay for your qualified medical expenses, such as deductibles and coinsurance for medical, dental and vision services. ▪ All services, including prescription drugs, must apply toward your deductible. ▪ The IRS determines the minimum deductible and maximum out-of-pocket limits for the HDHP. ▪ The IRS determines the maximum amount of funds that can be contributed annually to your HSA. 3
How does th the HSA work? HSA’s are similar to flexible spending accounts because they allow you to set money aside, on a pre-tax basis, to pay for eligible medical, dental and vision expenses. However, unlike a flexible spending account, there is no “use it or lose it” policy on the HSA. Money left in your HSA at the end of each year simply rolls over to the next year. It is important to note, any funds you withdraw for non-qualified medical expenses will be taxed at your income- tax rate, plus 20% if you’re under 65. The penalty goes away after age 65, but you’ll still have to pay taxes if the withdrawals aren’t for eligible medical expenses. 4
How does the HDHP HSA PPO work? You enroll on an eligible high-deductible health plan. You open a health savings account and you use the funds in your HSA to pay for eligible medical, dental, and vision expenses. 5
Qualifying for an HSA To be an eligible individual and qualify for an HSA, you must meet the following requirements. ▪ You must be covered under a high deductible health plan (HDHP). ▪ You are not enrolled in Medicare. ▪ You cannot be claimed as a dependent on someone else’s tax return. ▪ You have no other health coverage except what is permitted under other health coverage. ➢ Other health coverage: o You and your spouse generally cannot have any other health coverage that is not an HDHP. o You can still be an eligible individual even if your spouse has a non-HDHP plan provided you are not covered by that plan. o You can have additional insurance that provides benefits only for the following items: • Liabilities incurred under workers’ compensation laws, • A specific disease or illness, • A fixed amount per day of hospitalization, • Accident, disability, dental, vision and long-term care insurance. 6
Health Insurance Definitions Allowed Amount This is the maximum payment the plan will pay for a covered health care service. May also be called “eligible expense”, “payment allowance”, or “negotiated rate”. Balance Billing When a provider bills you for the balance remaining on the bill that your plan doesn’t cover. This amount is the difference between the actual billed amount and the allowed amount. A network provider may not bill you for covered services. Coinsurance Your share of the costs of a covered health care service, calculated as a percentage (for example, 20%) of the allowed amount for the service. Copayment A fixed dollar amount you pay for covered health care, usually when you receive the service. The amount can vary by the type of covered health care service. For example, a copay for primary care physician office visit will vary from the specialist copay. Deductible An amount you could owe during a coverage period (usually one year) for covered health care services before your plan begins to pay. An overall deductible applies to all or almost all covered items and services. 7
Health Insurance Definitions Continued Out-of-pocket Limit/Maximum The most you could pay during a coverage period (usually one year) for your share of the costs of covered services. After you meet this limit the plan will usually pay 100% of the allowed amount. This limit never includes your premium or charges your health care plan doesn’t cover. Premium The amount that must be paid for your health insurance. This amount is deducted, per pay period, from your paycheck. Primary Care Physician (PCP) A physician who provides or coordinates a range of health care services for you. A PCP can be a family or general practitioner, internist or pediatrician. Provider An individual or facility that provides health care services. Some examples of a provider include a doctor, laboratory and hospital. • In-Network : A provider who has a contract with your health insurer and has agreed to provide services to members of the plan. Also called “preferred provider” or “participating provider”. • Out-of-Network : A provider who does not have a contract with your plan to provide services. You have no benefits under the HMO if you seek services with an out-of-network provider and do not have a referral to do so. Also called “non - preferred” or “non - participating provider”. 8
HDHP HSA PPO Benefits You must pay the entire cost, up to the deductible amount, before this plan begins to pay for covered services. HDHP’s do not have copayments . All services are subject to the plan deductible. In-Network Out-of-Network Deductible $2,800 Individual $5,000 Individual $5,200 Family $10,000 Family Out-of-Pocket Limit $2,800 Individual $10,000 Individual $5,200 Family $20,000 Family Physician Office Visits Covered at 100% after deductible Covered at 80% after deductible Preventive Care Covered at 100%, deductible does not apply Covered at 80% after deductible Emergency Room Visits Covered at 100% after deductible Covered at 100% after deductible Inpatient Hospital Visits Covered at 100% after deductible $300 per occurrence plus 80% after deductible Prescription Drug Covered at 100% after deductible Covered at 80% after deductible The description above is a brief summary of benefits. For a more detailed explanation of your group health benefits, please refer to the Summary of Benefits and Coverage, which can be obtained through your Human Resource Department. 9
Why choose a HDHP HSA PPO? ▪ Tax savings (funds contributed to an HSA are pre-tax) ▪ Funds are FDIC-insured and can be interest bearing ▪ Interest earnings are tax-free ▪ Employees own the funds, so the account goes with them if they change jobs ▪ May use HSA funds as expenses are incurred or save for future eligible expenses ▪ Funds carry over from year to year (no use it or lose it rule) ▪ Employees can make contributions anytime during the year, up to the annual maximum (including any amount contributed by your employer, if applicable). ▪ 2020 Individual Maximum: $3,550 ▪ 2020 Family Maximum: $7,100 ▪ Catch-up Contribution (age 55 and above): $1,000 ▪ Employees may contribute to the HSA until they become eligible for Medicare; after which, they may use HSA funds for eligible expenses even though they no longer contribute to their account 4
Before electing a HDHP HSA PPO It is important that you analyze this as a math equation. Similar to when you participate on a flexible spending account, you want to estimate how much you anticipate spending in medical, dental and vision expenses throughout the year. Here are some questions you might want to ask yourself if you are considering joining the HDHP HSA: 1. How many prescriptions do I take per month? 2. What is the total cost of those prescriptions? ▪ To find out the total cost, call your pharmacist and ask them “What would the cost of my medication be if I joined an HSA with a $2,800 deductible?” 3. Am I scheduled for any surgical procedures (inpatient or outpatient)? 4. Do I anticipate needing any physical therapy over the next year? 5. How often do I go to the doctor for injury or illness? 4
Before electing a HDHP HSA 1. How many prescriptions do I take per month? Why is this important? This is important because if you currently participate on either the HMO or PPO you simply pay a copay for your prescription medication. Remember, the HDHP HSA does not have copay’s, which means you will absorb the entire cost of the medication until you’ve satisfied your deductible. Example: PPO HDHP HSA Let’s say that I have 3 prescriptions each month. Let’s say that I have the same 3 prescriptions as referenced One is a generic, which costs me $10 a month. The under the PPO; only now I am paying the actual cost versus other two are non-preferred brand, which costs me a copay. My generic cost $38, one of my non-preferred $50 per prescription for a total of $100. brand medications cost $167 and the other is $319. For a one-month supply of all 3 medications, I am For a one-month supply of all 3 medications, I am responsible for paying $110. responsible for paying $524. 4
Recommend
More recommend
