2018 Healthcare Insurance Options Retirement Savings Accounts - PowerPoint PPT Presentation

2018 Healthcare Insurance Options Retirement Savings Accounts October 2017

Affordable Care Act Refresher The Affordable Care Act (ACA) expanded health coverage through a series of provisions starting in 2014  Individual Mandate: Mandated all Americans, with some exceptions, to maintain a minimum level of health coverage or face a tax  Insurance Exchanges: Created health insurance exchanges and provides premium tax credits to assist eligible individuals with the purchase of coverage  Medicaid Expansion: Allowed states to expand Medicaid up to 133% of federal poverty level  Employer Mandate: Mandated employers with 50 or more full-time equivalents to offer coverage to full-time employees and their dependents Page 2

Individual Mandate ACA requires U.S. citizens and legal residents to have qualified health coverage  Get coverage through their employer  Buy an individual market plan through either: • The individual market exchange • The off-exchange or private exchange market  Obtain coverage from the Government (e.g. Medicaid, Medicare, TRICARE)  Go uninsured and pay penalties (unless you qualify for a hardship exemption) • Penalty is the greater of $695 adjusted for inflation (plus $347.50/child up to a maximum of $2,085 each adjusted for inflation) or 2.5% taxable income (above tax filing threshold) Page 3

Hardship Exemptions  ACA regulations provide hardship exemptions for those individuals residing in states that have not expanded Medicaid (like Texas). If the individual qualifies, there will be no individual penalty.  Nine hardship categories • Individuals who cannot afford coverage (2018: 8.05% of household income); • Taxpayers with income below the filing threshold; • Members of Indian tribes; • Hardship (e.g. homeless, foreclosure, unpaid medical, bankruptcy, others); • Individuals who experience short coverage gaps; • Religious conscience; • Members of a health care sharing ministry; • Incarcerated individuals; and • Individuals who are not lawfully present Page 4

MMS Medical Plan Choices MMS worked with the Episcopal Church Medical Trust to provide full time employees who have completed their probation with several medical plan choices:  High Deductible (“Consumer Directed”) Health Plans • Anthem BCBS CDHP 40 / HSA • Cigna CDHP 20 / HSA (2018 only) • Anthem BCBS CDHP 20 / HSA (starting in 2018)  Low Deductible Health Plans • Anthem BCBS EPO 80 • Anthem BCBS PPO 70 Silver • Anthem BCBS PPO 75/50 • Anthem BCBS PPO 90/70 • Cigna Open Access Plus • Anthem BCBS BlueCard PPO 70 • Anthem BCBS BlueCard PPO 80 • Anthem BCBS BlueCard PPO 90 Only High Deductible Plans qualify for tax advantaged Health Saving Accounts Page 5

All Plans – Routine and Preventive Care  $0 Copay Network  Benefits include covered services received in a physician’s office such as: • Routine exams • Well-Woman and Well-Man exams • Routine exam X-rays and lab services • Well-Child checkups • Immunizations • Other Routine Services Page 6

Cigna and Anthem BCBS CDHD Plans at a glance Cigna CDHP20 / HSA Anthem BCBS CDHP 40 / HSA Anthem BCBS CDHP 20 / HSA Plan Provision Network Out-of-Network Network Out-of-Network Annual deductible $2,700 / $5,450 $3,000 / $6,000 $3,500 / $7,000 $7,000 / $14,000 Annual coinsurance $1,500 / $3,000 $4,000 / $7,000 $2,500 / $5,000 $3,000 / $6,000 max Annual OOP max $4,200 / $8,450 $7,000 / $13,000 $6,000 / $12,000 $10,000 / $20,000 $0 Preventive $0 Preventive Office visit 20% (PCP or 45% 40% (PCP or 400% Specialist) Specialist) 20% 20% 40% 60% Urgent care 20% 20% 40% 40% Emergency room Inpatient hospital 20% 45% 40% 60% Outpatient surgery 20% 45% 40% 60% Page 7

What are Health Savings Accounts  Tax-advantaged savings account for qualified healthcare expenses  Employee sets up the account and owns it  Balances accumulate and roll over year after year  Portable from employer to employer  Acts like an IRA or 401(k) for healthcare expenses  May be invested  Account must be held by a qualified trustee  Anyone can make a contribution to employee’s Health Savings Account on an annual basis Page 8

What are Health Savings Accounts (con’t)  IRS sets annual limits on contributions: • $3,450 single / $6,900 family for 2018 (2017: $3,400 / $6,750) • Catch-up contributions after age 55 of $1,000 Deadline for contributions – April 15 th of following year • • Employee is responsible to ensure the maximum is not exceeded  May be set up by individuals who: • Are covered by a qualifying High Deductible Health Plan • Are not covered by other health insurance (with few specific exceptions) • Cannot be claimed as a dependent on someone else’s tax return • Are not eligible for Medicare Page 9

Additional Benefits – Pharmaceuticals Cigna CDHP 20 / HSA or Express Scripts Standard Anthem BCBS CDHP-40 / HSA Anthem BCBS CDHP 20 / HSA Retail Mail Order Retail and Mail Order Retail and Mail Order $2,700 per person $3,500 per person Annual Prescription Deductible $50 per person None $5,450 per family $7,000 per family (in-network) (combined with medical deductible) (combined with medical deductible) In-Network In-Network In-Network $4,200 Individual / $8,450 Family $6,000 Individual / $12,000 Family Annual Prescription Out-of-Pocket $2,500 Individual/$5,000 Family Out-of-Network Out-of-Network Maximum (includes deductible) Out-of-Network $7,000 Individual / $13,000 Family $10,000 Individual / $20,000 Family $2,500 Individual/$5,000 Family (combined with medical (combined with medical out-of-pocket maximum) out-of-pocket maximum) Tier 1: Generic Up to a $10 copay Up to a $25 copay You pay 15% after deductible You pay 15% after deductible Tier 2: Preferred Brand Name Up to a $40 copay Up to a $100 copay You pay 25% after deductible You pay 25% after deductible Tier 3: Non-Preferred Brand Name Up to a $80 copay Up to a $200 copay You pay 50% after deductible You pay 50% after deductible Up to a 30-day supply (retail) or 90- Up to a 30-day supply (retail) or 90- Dispensing Limits Per Copayment Up to a 30-day supply Up to a 90-day supply day supply (mail order) day supply (mail order) Page 10

Additional Benefits – EyeMed Vision Care Plan Provision Network Out-of-Network Eye Exam You pay $0 Plan pays up to $30 Lenses Plan pays up to Single vision $32 Bifocal $46 You pay $10 Trifocal $57 Frames $150 allowance, 20% off Plan pays up to $47 balance over $150 Contact Lenses Conventional $150 allowance, Plan pays up to $100 15% off balance over $150 Contact Lenses $150 allowance, then you pay Disposable Plan pays up to $100 balance over $150 Page 11

MMS 2018 Contributions  Whichever of these health insurance plans you select, MMS will contribute $4,400/year (2017: $4,000; 2014-16: $3,600) to the premiums for yourself and your family  If you select one of the High Deductible Plans, MMS will match your contributions to your Health Savings Account up to $1,200/year (2016-7: $1,200/year; 2015: $900/year; 2014: $600/year)  You can also make additional contributions to your Health Savings Account (not matched by MMS) by payroll deduction  Your contributions to your Health Savings Account are pre-tax (reduce your taxes by lowering your taxable income by the amount of your contributions) Page 12

2018 Medical and Dental Rates  Monthly plan premiums  Remember! • Whichever of these health insurance plans you select, MMS will contribute $4,400/year (~$367/month) to your premiums • If you select one of the High Deductible Plans, MMS will also match your contributions to your Health Savings account up to $1,200/year ($100/month) Page 13

Some Math  Let’s assume in 2018 you: • Are not 26 or less years of age and covered under your parent’s plan • Are not married and covered under your spouse’s plan • Do not meet any of the hardship criteria • Have not obtained coverage from the Government (e.g. Medicaid, TRICARE) • Have not purchased health insurance privately or through an exchange Then you will pay a tax penalty equal to the greater of $695 (inflation adjusted ) or 2.5% taxable income (above tax filing threshold) and you will have no health insurance  Alternatively, let’s assume in 2018 you: • Enroll in the Anthem BCBS CDHP 40 / HSA • Match MMS’s contribution to your Health Savings Account Then your out-of-pocket will be $2,728 ($1,528 premiums and $1,200 Health Savings Account contributions) but you will receive:  Health insurance (including free check ups and eye care benefits)  A health savings account worth $2,400  Lower taxable salary (for income tax purposes) by $2,728 (may impact EITC)  Even if you never use the insurance, your net benefit for enrolling will be at least $367 ($695 (inflation adjusted) minus the difference between $2,728 and $2,400) AND LIKELY MORE (depending upon your tax situation) Page 14