2018 Healthcare Insurance Options Retirement Savings Accounts - - PowerPoint PPT Presentation

October 2017

2018 Healthcare Insurance Options Retirement Savings Accounts

Page 2

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 3

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 4

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 5

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

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All Plans – Routine and Preventive Care

• $0 Copay Network
• Benefits include covered services received in a physician’s
• ffice 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 7

Cigna and Anthem BCBS CDHD Plans at a glance

Cigna CDHP20 / HSA Anthem BCBS CDHP 20 / HSA Anthem BCBS CDHP 40 / 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 max $1,500 / $3,000 $4,000 / $7,000 $2,500 / $5,000 $3,000 / $6,000 Annual OOP max $4,200 / $8,450 $7,000 / $13,000 $6,000 / $12,000 $10,000 / $20,000 Office visit $0 Preventive 20% (PCP or Specialist) 45% $0 Preventive 40% (PCP or Specialist) 400% Urgent care 20% 20% 40% 60% Emergency room 20% 20% 40% 40% Inpatient hospital 20% 45% 40% 60% Outpatient surgery 20% 45% 40% 60%

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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

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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 15th 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

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Additional Benefits – Pharmaceuticals

Cigna CDHP 20 / HSA or Anthem BCBS CDHP 20 / HSA Anthem BCBS CDHP-40 / HSA Retail Mail Order Retail and Mail Order Retail and Mail Order

Annual Prescription Deductible (in-network) $50 per person None $2,700 per person $5,450 per family (combined with medical deductible) $3,500 per person $7,000 per family (combined with medical deductible) Annual Prescription Out-of-Pocket Maximum (includes deductible) In-Network $4,200 Individual / $8,450 Family Out-of-Network $7,000 Individual / $13,000 Family (combined with medical

• ut-of-pocket maximum)

In-Network $6,000 Individual / $12,000 Family Out-of-Network $10,000 Individual / $20,000 Family (combined with medical

• ut-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 Dispensing Limits Per Copayment Up to a 30-day supply Up to a 90-day supply Up to a 30-day supply (retail) or 90- day supply (mail order) Up to a 30-day supply (retail) or 90- day supply (mail order)

Express Scripts Standard

In-Network $2,500 Individual/$5,000 Family Out-of-Network $2,500 Individual/$5,000 Family

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Additional Benefits – EyeMed Vision Care

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

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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

• f your contributions)

Page 13

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 14

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)

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Enrollment (and other legal stuff)

• You must elect (or change) coverage for 2018 by submitting an election

form during the open enrollment period ending November 8th unless you have a qualifying event (e.g., marriage, divorce, birth of a child, loss of other health coverage)

• You may not revoke your election for 2018 after coverage has commenced

unless you have a qualifying event

• Your participation will terminate if your employment terminates by death,

disability, retirement or other separation from service

• Your contributions to the cost of any medical plan must be made by equal

payroll deductions throughout the year

• Your contributions to your Health Savings Account (matched and

unmatched) are also required to be made by equal payroll deductions

• Details regarding our Health Benefit Plan can be found in the Employee

Handbook

• Plan details are posted on the MMS website and are the governing

documents

Page 16

Final thought – IRA contributions

• MMS will match your contributions to an Oppenheimer managed

Investment Retirement Account up to 3% of your salary

• Contributions to your IRA are tax advantaged (reduce your taxes)

and accumulate tax free until distribution

• Enrollment period for 2018 ends November 8th