Purdue Choice Fund Health S i av A ngs t ccoun (HSA)

Transcription

1 Purdue Choice Fund Health Savings Account (HSA)

2 What Is a Health Savings Account (HSA) Plan? Qualified Medical Plan + Health Savings = Bank Account Tax Advantaged HSA Plan A tax advantaged health plan that provides coverage for current medical/pharmacy expenses and allows the option to save for future health expenses. Combines a Qualified Medical Plan (medical/pharmacy coverage) with a Health Savings Account. Contributions to the Health Savings Account can be made by the Employer, the Employee, or both. Money deposited to the Health Savings Account is generally not taxable. Individuals/Account Holders have the option to invest the money into interest-bearing investment vehicles. Interest on these investments is also not taxable. 2

3 What Is a Qualified Medical Plan? The IRS defines the criteria for an HSA Qualified Medical Plan and updates the criteria each year. Qualified Medical Plans are often referred to as high deductible health plans. For 2011, Qualified Medical Plans must meet this criteria: - Deductible: Minimum $1,200 for individual/$2,400 for family - Coinsurance: All claims (medical/pharmacy) are subject to a common deductible before the coinsurance applies - Preventive Care: Can be covered at 100% before the deductible has been met - Out of Pocket Maximum: Up to $5,950 for individual/$11,900 for family - Once the Out-of-Pocket Maximum is met, the plan pays 100% for covered medical/pharmacy expenses 3

4 I ve heard these account based plans are unique. How is this different from a traditional plan? Same Wide choice of doctors/hospitals Covers routine, emergency and catastrophic care Pay percentage of bill for in-network care Pay higher percentage for out-of-network care Plan pays claim after plan deductible met CIGNA receives bills, sends payment to doctors/hospitals Different Lower premium but higher deductible No copayment due at time of visit Preventive care covered 100% Preventive generic drugs covered 100% Preventive brand drugs not subject to deductible Account can be used to pay the deductible Cap on out-of-pocket expenses Unused dollars rollover to next year Max Out t-of-pocket Dedu uctible CIGNA HSA 100% after $3,300 (in-network) Health Plan 80% Your Share $650 HSA $650 Employee 100% Preventive Care (in-network) Max you ll pay Unused $ roll over to next year 4

5 How does an HSA work? Individual id Family 100% after $3, % after $6,600 Out-of-Pocke et Max Dedu uctible Health Plan 80% Deductible $1,300 Care ) 100% Preventive (in-network Out-of-Pocke et Max Dedu uctible Health Plan 80% Deductible $2, % Preventi ve Care (in-netwo ork) Contribution Contribution $650 Purdue + Employee $ $1,300 Employer + Employee $ Contributions can be used to pay for current year qualified health expenses or saved to pay for future health expenses Slide reflects In-Network Amounts 5

6 Who Is Eligible to Participate in a HSA Plan? Because HSA Plans have special tax advantages, the IRS defines specific rules on participation. To be eligible to contribute toward a Health Savings Account, the IRS requires that individuals: - Must be enrolled in a qualified HSA medical plan (CIGNA Choice Fund is a qualified medical plan) - Cannot have any other health coverage - Not covered by spouse s medical or pharmacy plan - Not covered through Medicare Part A or Part B - Not covered through a general-purpose Flexible Spending Account (FSA) plan (either employer s or spouse s) - Cannot be claimed as a dependent on another person s s tax return 6

7 What Is the Maximum Someone Can Contribute Annually to Their HSA? Because HSAs offer special tax advantages, the IRS puts limits on the maximum amount that can be contributed to the account: Under age 55 and not enrolled in Medicare: (based on a 12-month period) - up to $3,050 individual coverage - up to $6,150 family coverage Age 55 or older: - Maximum contribution increases by $1,000 (considered a catch-up contribution) - up to $4,050 individual coverage - up to $7,150 family coverage 7

8 CIGNA Choice Fund Health Savings Account (HSA) Plan Qualified Medical Plan + Health Savings = Bank Account Tax Advantaged HSA Plan CIGNA Medical/Pharmacy coverage Processes claims Enrollment, education and communication Issues medical ID card Customer service JPMorgan Chase Opens/maintains the HSA bank account Issues the debit card + and welcome kit = Manages account activity Deposits Debit card activity Interest Investment account CIGNA Choice Fund HSA Once the HSAis set up, CIGNA is the employee s single point of contact t for both the Qualified Medical Plan and the Health Savings Account One CIGNA toll-free number on the back of the ID card and Debit Card Answer questions on medical plan, HSA requirements, account balance and activity One website (mycigna.com) to manage benefits, claims, decision support tools and banking (via link to JPMorgan Chase HSA site) 8

9 How Are Contributions Made to the CIGNA Choice Fund HSA? Employers Account Holders Payroll withholding of Employee HSA contributions Unscheduled Deposits to the HSA Account Employer Contributions to Employee HSA accounts Transfers from other HSA Accounts Monies sent to JPMorgan from the Employer Monies sent to JPMorgan Chase via Mail with Transaction Specific Deposit form EFT transfer from individual s personal account 9

10 Health Care Reform Impacts on HSAs Dependent Coverage 1/1/2011 The change in dependent coverage does not apply to HSA funds HSA Funds can only be used for the eligible expenses of tax dependents The extension of coverage to age 26 does apply to the qualifying medical plan Over-the-Counter Drugs 1/1/2011 Purchases of most over-the-counter drugs and medicines on or after January 1, 2011 cannot be reimbursed without a doctor s prescription and store receipt Some eligible items, such as insulin, diabetic and first aid supplies, will not require a prescription You should keep a copy of the prescription and receipt for tax purposes The same prescription can be used for purchase of a specific medicine for up to 12 months (subject to change if additional guidance is issued by government) IRS Penalty increase on HSAs 1/1/2011 The tax penalty on HSA distributions that are not used for qualified expenses will increase from 10% to 20% of the disbursed amount HSA funds can only be used for eligible expenses of tax dependents even if an adult dependent is covered by the health plan, if that dependent is not claimed as a tax dependent, any expenses paid by the HSA will be subject to tax penalties 10

11 What Can Money in the HSA be Used For? The IRS determines what is a qualified health expense Qualified health expenses - Expenses eligible under your medical plan - Expenses incurred after the HSA account is established - Other expenses typically covered through an FSA: Medical, pharmacy, vision and dental - A more comprehensive list is available on mycigna.com Use the HSA to pay for qualified health expenses for: - You - Your spouse as recognized by the IRS - Your dependents as recognized by the IRS - You cannot use your HSA for a domestic partner Domestic Partners and Dependents who are not recognized by the IRS - Can be covered through the HSA-qualified medical plan - However, since HSA cannot be used for these dependents, Automatic Claim Forwarding should NOT be elected if they are covered through the HSA-qualified medical plan 11

12 What Are My HSA Saving and Investment Options? $2,000 minimum in HSA to invest Once the investment account is open, no minimum balance applies Eight mutual funds from which to choose Investments can be allocated into one fund or multiple funds No minimum deposit for any fund Tax-free growth of interest or investment earnings Monthly fees apply Online trading no fees apply Track your balance online or with convenient monthly statements 12

13 Tax Responsibilities and Reporting JPMorgan reporting for year-end taxes will be sent to the Individual id (Account Holder) Form 1099-SA Reporting all distributions from the HSA Form 5498-SA Reporting of contributions and transfers into the HSA Individual (Account Holder) Responsibility Ensure total contributions do not exceed allowable maximums Keep accurate records of contributions i and withdrawals Maintain receipts for all use of HSA dollars: purchases and bill payments File form 8889 as part of income tax submission to the IRS 13

14 How Does Money in the HSA Get Used? Employee decides how and when to use the money. Four ways to access money in the HSA to pay for qualified medical expenses: Automatic Claim Forwarding In this scenario, CIGNA will automatically pay eligible medical expenses from the employee s Health Savings Account. This option is not available for behavioral or pharmacy claims. Checkbook. Employees can use the Choice Fund checks to pay for out-of-pocket expenses (deductibles and coinsurance). Debit Card. Employees can use the Mastercard branded debit card to pay for out-of-pocket of expenses. The card can also be used to get cash at ATMs to reimburse themselves for qualified expenses they paid with other personal funds (e.g., didn t have debit card/checkbook with them at doctor visit so paid co-pay in cash). Online Bill Pay Can pay medical expenses directly from HSA. Enables employees to monitor, manage and schedule payments online, anytime. Payments can be scheduled on a one-time or repeating basis. 14

15 CIGNA Choice Fund HSA Payment Process Medical Claim Sick visit to an in-network doctor/hospital/facility. CIGNA updates individual s HSA statement online. Sends hard copy Quarterly Statement via the mail. Show CIGNA Choice Fund ID Card to obtain CIGNA discounted rates. CIGNA sends individual an Explanation of Benefits ( receipt ) showing: Doctor fee, CIGNA discount, amount billed, amount deducted from the HSA, amount paid to doctor, remaining HSA balance, and what individual dua saved. Doctor bills CIGNA. CIGNA receives the claim and processes it based on the HSA qualified plan deductible, covered expenses and CIGNA negotiated discounts. If Auto Claim Forwarding was elected, CIGNA automatically subtracts the amount owed to the doctor from the HSA and pays the doctor. If no Auto Claim Forwarding in place, the individual id has the option to pay the doctor bill using their HSA account (debit card/checkbook) or pay out-of-pocket. 15

16 HRA Plan Option 1 CIGNA Choice Fund HSA Payment Process Pharmacy Claim Show CIGNA Choice Fund ID Card at the pharmacy to obtain CIGNA discounted rates. Pharmacy can see individual s plan details and determines the amount due at the time of sale Deductible discounted d cost to individual Coinsurance percentage of discounted cost to individual Out-of-Pocket Maximum if met, no cost to individual If payment is due to Pharmacy, individual chooses how to pay: HSA Debit Card or Checkbook Out of pocket, using non-hsa funds 16

17 Customer Service to Help Manage the HSA HSA Customer Service: By Phone - One toll-free number on the back of the ID card and Debit Card - Available 24 hours a day, 7 days a week - Specially-trained Customer Service Representatives answer questions about: - Medical and pharmacy benefits and claims - HSA IRS requirements - HSA transaction activity and balance - Warm transfer to JPMorgan Chase for specialized activity (investments, lost debit card, debit card transaction questions) - Direct members to tools available via mycigna.com Online - Single sign-on to Medical and HSA activity through mycigna.com - Medical/pharmacy information - Find a physician or facility participating in the CIGNA network - Access cost and quality tools - HSA bank account information - Manage investment accounts via link to JPMorgan Chase 17

18 One Website to Manage CIGNA Choice Fund HSA Medical Plan and Bank Account Logged in as: Karen Smith Tools to find and compare Hello Karen Manage Medical Plan cost and quality care Manage Bank Account 18

19 mycigna.com Links Directly into JPMorgan Chase At-A-Glance Account Summary Karen Smith Karen Smith Copyright 2007 JPMorgan Chase & Co. All rights reserved. 19

20 Compare Pharmacy Pricing on mycigna.com Pharmacy Plan Prescription Drug Price Quotes Features Learn actual prices you ll pay Compare cost between retail pharmacies and CIGNA Home Delivery Pharmacy See cost for generic equivalent, if available 20

21 Manage Complete Health Financial Records Quicken Health SM Expense Tracker Tracks medical and pharmacy claim data for the customer and his/her dependents Helps manage the amount owed and what it s for Shows balances on deductibles and out-ofpocket maximums Sends alerts when a claim needs attention Simplifies year-end tax preparation by consolidating all health expense info in one place 21

22 Helpful HSA Information from JPMorgan Chase to Manage the Fund Employee Statements Monthly Health Statement (available online) 9 Transaction activity (debit card, checks, auto claim forwarding, deposits and interest) 9 Balance information (cash account) Investment Statement mailed quarterly 22

23 I need help enrolling. What help can you provide? mycignaplans.com CIGNA Customer Service Pre- Enrollment Line at for instructions and helpful tips to build and customize your benefits User ID: purdue2011 Password: cigna Recorded calls TBD Open Enrollment Oct. 25 th Nov. 12 th 23

24 I need help enrolling. What help can you provide? Plan Comparison Tool View CIGNA Plan options Benefit Details Descriptions Compare cost of plans CIGNA network discounts Use demographic to determine utilization or modify to individual circumstances Includes payroll cost of plans Includes ability to model HSA contributions Medical and pharmacy cost tools 24

25 I need help enrolling. What help can you provide? Plan and Cost Comparison Tool on mycignaplans.com Compare potential out-of-pocket costs of various CIGNA health plans offered. Supports your decisions and helps you learn about the plan. 25

26 Choose Well, Live Well Personal Health Team is here to help you! Specially trained Advocates including registered nurses, clinicians, EAP specialists, behavioral counselors and health educators that will help you improve your health. Holistic approach to improving health and well being, coaching to healthy living/behaviors. Will help you navigate the increasingly complex health care delivery system. Free coaching for weight, stress and tobacco cessation. Provide assistance for chronic conditions such as diabetes, heart disease and asthma Call the number on the back of your ID card and select option 2. Available from 9 am to 9 pm on weekdays. Also available on Saturday. 26

27 Thank You 27