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Purdue Benefits




www.purdue.edu/benefits


IS A HIGH
-
DEDUCTIBLE MEDICAL
PLAN YOUR BEST CHOICE?

TAKING THE MYSTERY OUT OF HIGH
-
DEDUCTIBLE HEALTH
PLANS AND HEALTH SAVINGS ACCOUNTS

Agenda

o
High
-
Deductible Health Plan With HSA


High
-
Deductible Health Plan Basics


Health Savings Account (HSA) Basics


IRS Says


How It Works


Scenarios


Plan Tips (How To Make It Work For You)

Purdue Benefits




www.purdue.edu/benefits


High Deductible Health Plan Basics

HIGH DEDUCTIBLE
HEALTH PLAN BASICS

High
-
Deductible Health Plan Plus HSA

Plan Basics

Health
Plan
(HDHP)

Health
Savings
Account
(HSA)

Purdue
Health
Plans Plus
HSA

o
Created as a way to help with rising
health care costs



Offer tax advantages for medical
expenses



Provide HSA owners with control of
where dollars are being spent

o
HSA owners are generally more
interested in how funds are being
spent when they own the account



Health care providers have
incentive to lower rates due to a
more competitive environment

Background

o
Intent of high
-
deductible health plans and HSA


Improved version of FSA with retirement savings feature


Allows unspent funds to roll over every year


Employers are not required, but are able to contribute


Account earns interest and offers investment options


Account goes with you if you leave Purdue


Able to save funds for retirement medical expenses, including
premiums


Remember that funds used for
non
-
medical expenses

are fully taxable



Prevalence of plans


According to Mercer’s National Survey of Employer
-
Sponsored
Health Plans 2012:

o
36% of 2,809 employers surveyed offer an HDHP

o
Up from 20% in 2008


Background

Plan Basics

Deductible

Premium

Coinsurance

Out
-
of
-
Pocket
Maximum

Preventive Care

Contributions

Account
Management

High
-
Deductible
Health Plan (HDHP)

Health Savings
Account (HSA)

Withdrawals

o
High
-
Deductible Health Plan


Lowest premiums
compared to more
traditional health plans



Higher deductible and maximum limit on out
-
of
-
pocket covered expenses in a calendar year



Includes both medical and prescription
costs



100% coverage with in
-
network providers for
preventive
care and preventive generic
medications
for certain
conditions


(i.e
. asthma, diabetes, heart disease and stroke,
prenatal vitamins, smoking cessation
)

Plan Basics


High Deductible
Health Plan

(HDHP)

Deductible

Coinsurance

Out
-
of
-
Pocket
Maximum

Preventive
Care

Plan Basics


High Deductible
Health Plan

(HDHP)

Deductible

Coinsurance

Out
-
of
-
Pocket
Maximum

Preventive
Care

o
Preventive
care
100% covered with in
-
network
providers,
i
ncludes
but not limited to:



Annual
exams, routine prenatal and well
-
child
care, and child and adult
immunizations



Preventive (non
-
diagnostic) screening services


e.g.,
cancer, diseases (heart and vascular, infectious)


Conditions: metabolic, nutritional, endocrine, mental
health, obstetric and gynecological, and pediatric


Disorders
(musculoskeletal, vision and hearing
)



Eligible preventive medications


F
or certain conditions such as: asthma,
heart disease
and
stroke


P
renatal
vitamins, generic contraceptives approved by
the FDA, smoking cessation

Plan Basics

2014 Deductible

In
-
Network

Out
-
of
-
Network

Purdue Health Plan
Plus HSA 1

$1,750 employee only

$3,500 family

$3,500 employee only

$7,000 family

Purdue Health Plan
Plus HSA 2

$ 2,500 employee only

$ 5,000 family

$5,000 employee only

$10,000 family

o
Deductible Phase:


You
pay 100%
of
all eligible expenses up to
the plan's annual deductible. Includes:



Non
-
preventive medical visits and services

o
Doctor visits, labs
, diagnostics, hospitalizations



Non
-
preventive
prescriptions


High Deductible
Health Plan

(HDHP)

Deductible

Coinsurance

Out
-
of
-
Pocket
Maximum

Preventive
Care

Plan Basics

2014 Prescription Coinsurance

Purdue
Health Plan
Plus HSA 1

&
HSA 2

Prescription


Type

Home Delivery

(90 day

supply)

Retail

(30 day

supply)

Preventive
Generic

0%

0%

Generic

Ded
. then

$25 max

Ded
. then
$
10 max

Preferred

Ded
. then

25%

Ded
. then
35%

Non
-
Preferred

Ded
. then

45%

Ded
. then
55%

2014 Medical Coinsurance


In
-
Network

Out
-
of
-
Network

Purdue Health Plan Plus HSA 1

20%

40%

Purdue Health Plan Plus HSA 2

25%

45%

*Member Pays the Difference program is still in effect.

o
Coinsurance Phase
:


After
meeting
your deductible, you pay a
smaller percentage of
expenses



High Deductible
Health Plan

(HDHP)

Deductible

Coinsurance

Out
-
of
-
Pocket
Maximum

Preventive
Care

Plan Basics

Annual Out
-
of
-
Pocket Maximum

In
-
Network

Out
-
of
-
Network

Purdue Health Plan
Plus HSA 1

$3,500 employee only

$7,000 family

$7,000 employee only

$14,000 family

Purdue Health Plan
Plus HSA 2

$ 5,000 employee only

$ 10,000 family

$10,000 employee only

$20,000 family

o
Out
-
of
-
Pocket Maximum Phase:



Plan pays 100% of eligible medical and
prescription drug costs once you meet the
annual maximum



This is the most you will pay for medical and
prescription drugs during 2014


High Deductible
Health Plan

(HDHP)

Deductible

Coinsurance

Out
-
of
-
Pocket
Maximum

Preventive
Care

Purdue Benefits




www.purdue.edu/benefits


High
-
Deductible Health Plan

HEALTH SAVINGS ACCOUNT
(HSA) BASICS

o
What Is An HSA
?



A bank account
–

called a health savings
account (HSA
)



Offers tax advantages and allows savings to
build over time



Available with high deductible health plans
only



Administered by
PayFlex




Debit card allows convenient access to funds
in the account



Account access via web and mobile


File claims, view account balance,
transfer funds, etc.


Plan Basics

Health Savings
Account (HSA)

Contributions

Withdrawals

Account
Management

2014 HSA

IRS
Contribution
Limit

Purdue
Contributions

Remaining
Employee
Contribution
Allowed

Employee

$3,300

$650

$2,650

Family

$6,550

$1,300

$5,250

o
HSA Contributions



Purdue contributes, and you have the
option to contribute to the same account

Plan Basics

Health Savings
Account (HSA)

Contributions

Withdrawals

Account
Management

o
HSA Contributions



Contributions are deposited pre
-
tax and
available for use on or after each pay date



Age
55 or
older any
time during
2014,
eligible
to contribute an additional $1,000



Update contributions any time during
year through EBenefits



Option to contribute after
-
tax



Plan Basics

Health Savings
Account (HSA)

Contributions

Withdrawals

Account
Management

Plan Basics

o
HSA
Funds


Remaining funds in
account
roll over
every
year, never lose
contributions


Even if you separate or retire



Funds earn interest and grow tax
-
free
with investment options available once
minimum balance is met


Potential for long
-
term, tax
-
free savings



No limit on account balance



Funds available to beneficiary in the
event of
death


Health Savings
Account (HSA)

Contributions

Withdrawals

Account
Management

o
HSA Withdrawals



Funds never taxed when used for eligible
expenses such as:



Medical (e.g. doctor visit, hospital stay)



Prescription and Over
-
the
-
counter drugs
(with doctor's prescription)



Vision (e.g. contacts, glasses)



Dental (e.g. fillings, braces)



Upon retirement , use funds tax
-
free for medical
premiums and eligible medical expenses


Including COBRA,
Medicare
premiums and supplement
plans, and
long
-
term care premiums



Age 65 or older able to pay tax and withdraw funds
with no tax
penalty for any reason

Plan Basics

Health Savings
Account (HSA)

Contributions

Withdrawals

Account
Management

o
HSA Withdrawals


P
ay eligible expenses of any family member
who qualifies as a dependent on your tax
return, even if you cover only yourself


D
ependent
must be covered
under plan
, for
expenses to apply
toward your plan’s deductible



Same
-
sex domestic partners
are eligible to be
covered under an employee’s
HDHP

o
Partner must be employee’s
qualified tax
dependent

for University’s HSA family
contribution to apply


o
Tax
-
free distributions can be made from the
HSA
for the qualified tax dependent’s health expenses


Plan Basics

Health Savings
Account (HSA)

Contributions

Withdrawals

Account
Management

Plan Basics

o
HSA Withdrawals



Flexibility to pay expenses from HSA or
pay out
-
of
-
pocket and reimburse yourself


Direct deposit option available



Use funds for you, your spouse, and your
tax dependents, even if you cover only
yourself



Keep your receipts for expenses


If not an eligible expense:

o
Pay tax on purchase(s)

o
20% tax penalty


Health Savings
Account (HSA)

Contributions

Withdrawals

Account
Management

o
Limited Purpose Flexible Spending
Account (LPFSA)



In addition to the HSA,
you
have
the
option to contribute
pre
-
tax to a Limited Purpose
FSA (LPFSA)



M
ay
only be used for eligible
dental and vision expenses



Funds are available for use
immediately



Must use funds by end of
year

(use it or lose it rule)



2014
contribution limit of
$2,500
per employee

Plan Basics

o
Limited Purpose Flexible Spending
Account (LPFSA)


If you choose the
LPFSA
with
your HSA, you will receive one
card



PayFlex’s

technology will
understand which purchases
should be applied to your
Limited Purpose FSA before
your HSA



Claim forms and direct deposit
available if you choose to pay
out of pocket and reimburse
yourself

Plan Basics

Purdue Benefits




www.purdue.edu/benefits


IRS SAYS

High
-
Deductible Health Plan Plus HSA

o
To offer an HSA with a high
-
deductible health plan,
certain IRS rules apply



Higher deductible and out
-
of
-
pocket maximum with
lower premiums than traditional plans


Must combine medical and prescription expenses to
one deductible and out
-
of
-
pocket maximum


Offer preventive care and certain preventive
medications at no cost


Charge fair market value for services


(i.e., No “low or no” cost services)

IRS Says

o
To participate in an HSA, certain IRS rules
apply


You
must

be covered under a
high
-

deductible health
plan (HDHP)



You
cannot

be covered under any non
-
HDHP plan in addition to your Purdue
HDHP plan



If your spouse has non
-
HDHP coverage,
you
cannot

be covered by that plan



If you elect an HSA, your spouse
cannot
have a health
c
are FSA



You
cannot

be claimed as a dependent on
someone else's tax
return


IRS Says


Insurance
or
accounts
n
ot

a
llowed
with an HSA
:


Non
-
HDHP medical
coverage


Health
c
are
f
lexible
s
pending account
(HCFSA)
or a Spouse's
HCFSA


Part A and/or Part B
Medicare


TRICARE or TRICARE For
Life


Any VA benefits used
within previous 3 months


IRS Says


You
can

have additional
insurance that provides
benefits for the following
items:


Accident


Disability


Dental care


Vision care


Long term
care


Specified disease or illness


Insurance that pays a fixed
amount per day for
hospitalization


o
To participate in an HSA, certain IRS rules apply

o
To participate in an HSA, certain IRS
rules apply


You
must

keep records to show:


Funds were used exclusively to pay or
reimburse qualified medical expenses,



qualified medical expenses had not
been previously paid or reimbursed
from another source, and



medical expenses had not been taken
as an itemized deduction in any year



Expenses incurred before you
establish
your HSA are
not
qualified medical
expenses

IRS Says

o
To participate in an HSA, certain
IRS rules apply


If funds are withdrawn for
anything other than a
qualified medical expense
prior to retirement, you are
subject to taxes plus a 20%
tax penalty


IRS Says

o
Special Limitation
Groups



Long Term Disability


Not eligible for HSA



COBRA


Not eligible for HSA



Over 65 Active Employees


Eligible for HSA, if
not

covered
under Medicare (including Part A
)



Under
65
Retirees


Not eligible for HSA



Over 65
Retirees


Not eligible for HSA


Purdue’s Special Rules

Purdue Benefits




www.purdue.edu/benefits


HOW IT WORKS

High
-
Deductible Health Plan Plus HSA

o
Pharmacy



Show your
Anthem ID
card



Pharmacy processes
through Express
Scripts



Payment due at time of purchase



Choose to use your HSA card or another form of
payment



Amount
owed will count toward your medical/
prescription deductible and out
-
of
-
pocket
maximum
unless
you choose a brand name prescription over
generic (Member Pays The
Difference)

How It Works

Purdue Benefits




www.purdue.edu/benefits


SCENARIOS

High
-
Deductible Health Plan Plus HSA

Purdue Benefits




www.purdue.edu/benefits


PLAN TIPS

High
-
Deductible Health Plan Plus HSA

Tips

o
Take advantage of
your 100% covered preventive
benefits,
including preventive
medications


o
Talk with your doctor or pharmacist


Be open and honest, keep the line of communication open


As the
patient,
you have the right to know


Ask the tough
questions


Make sure to get copies of medical records and
imaging
to reduce
duplicate services


o
Use Tier 1 labs for the best savings


www.purdue.edu/hr/Benefits/Medical/purdueChoiceFund.html#Tier1labs




o
Check
out the Center for Healthy Living
for a
high quality, low cost option


$45
flat fee for center
visits


No
-
cost
health coach services


Tobacco cessation


Medication therapy management


Nutritional counseling


Employee assistance
counseling



Convenient online scheduling
option


Tier 1 lab location


o
Lower
your costs for prescriptions


Use generics


Try home delivery


Check with retailers for low cost
prescription
programs

Tips

Tips

o
Always show your insurance
information, even when you have
to meet your deductible


Medical
and

prescription
expenses


In
-
network provider discounts


o
Keep your receipts and
explanations of benefits (EOBs)


o
Consider a Limited
Purpose
Flexible Spending
Account


Vision/dental expenses


o
Check in to additional
coverage
with
accident
/
critical
i
llness
insurance options


Tips

o
Benefit from the
triple tax
advantages


Contributions you make are pre
-
tax


Consider contributing what you
would have paid
for 2013 premiums



Add what you would typically
contribute to your FSA



Funds in HSA grow with interest
tax
-
free


You have option to allow HSA to build
now, save funds for
later



Funds are tax
-
free when used for
eligible
expenses




Continue to use HSA funds tax
-
free
on eligible expenses after
retirement,
including Medicare
premiums

o
Use
available technology


Center for Healthy Living


Schedule appointments online



Castlight


Shop around for
care



Express Scripts


Price medications and
order home delivery refills



PayFlex

(
Healthhub
)


Track your
expenses



EBenefits


Update HSA contributions anytime


Tips

Center for Healthy Living


1.
Schedule an
appointment


2.
View lab
results
from
your visits
with the
center





Castlight


1.
Search
personalized cost
and quality
information for in
-
network providers
and services


2.
Track how close
you are to meeting
your
deductible


3.
Connect seamlessly
to Express Scripts
for
prescription
pricing,
ordering
and
more


4.
See tips to help
manage you health
care



Castlight

Castlight Mobile



Available for iPhone, Android and
other smartphones


View
personalized cost and quality
information


View
provider
details


Check
your deductible and out
-
of
-
pocket maximum status


Castlight Guides By
Phone


Full
access over the telephone


Call toll
-
free 888
-
272
-
9572, Monday
-

Friday, 8 a.m.
-

9 p.m.


Castlight





www.purdue.edu/castlight


Express Scripts

1.
Order home
delivery
prescriptions


2.
Make the
switch from
retail to home
delivery


3.
Track your
prescription
expenses and
view history

Express Scripts

1.
Price
medications
and compare
costs:


Retail vs.
home
delivery



Brand name
vs. generic
equivalent


PayFlex

1.
View
account
details and
history


2.
File claims, view
eligible
expenses, and
order additional
debit
cards


3.
Update settings
to receive
email/text
notifications


4.
Enroll in direct
deposit, submit
documents
online


PayFlex

1.
Link your bank
account to
transfer funds
to and from
your HSA with
ease and view
investment
options


2.
Set up
recurring
transactions,
print claim
forms, and use
planning tools


PayFlex

Mobile


Access real
-
time account information


Account balances


Claims
status


Transaction details



Account alerts



Submit claims



Take pictures of

receipts and
submit

from your
phone



PayFlex

EBenefits

1.
Increase and
decrease HSA
contributions
at any time
during the year



Resources

Purdue
Benefits

www.purdue.edu/benefits



hr@purdue.edu


www.purdue.edu/hrhelp


Try

HR’s new
secure message

tool!


765
-
494
-
2222

Anthem

www.anthem
.com

Check out Anthem’s tools
and resources today!

Castlight

www.purdue.edu/castlight


Mobile app available!

888
-
272
-
9572


Center for
Healthy

Living

www.purdue.edu/healthyliving


Now schedule appointments online!

765
-
494
-
0111