HSA Overview SANTA PAULA UNIFIED SCHOOL DISTRICT AUGUST 23, 2016 2 - - PowerPoint PPT Presentation

CSEBO HSA Overview

SANTA PAULA UNIFIED SCHOOL DISTRICT AUGUST 23, 2016

HSA Basics

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Two Parts: Health Plan + Savings Account



Tax-free savings for medical expenses



Works in conjunction with the HSA powered plan



Different bank vendors depending on the carrier

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

HSA-qualified plan through CSEBO



Office visits, prescriptions, deductibles, copays and coinsurance ALL count towards the Out of Pocket Maximum



Preventive services covered at 100%

What is considered an HSA-qualified plan?

 Defined by the IRS  2017:  Minimum Deductible:

 Single: $1,300  Family: $2,600

 Maximum Deductible/Out-of-Pocket Maximum

 Single: $6,550  Family: $13,100

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Choose your preferred network

 Lumenos HSA 709  DHMO HSA #7590

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Why choose an HSA?

 Save now:  HSA’s have lower premiums over traditional plans to decrease your monthly

contributions

 HSA deposits are not taxed on the federal level

 However, you will pay California state taxes

 Save for the future:  HSA funds roll over year to year  You keep the money even if you change jobs or insurance plans  Interest is earned tax-free  Comprehensive and easy investment options  Same doctors, same network, same pricing

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NOT use it or lose it

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Funds roll over every year

 Accounts grow over time as your

unused funds roll over from year to year and earn tax-free interest and/or investment income

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You own the account permanently

 Even if you leave SPUSD, change

health plans or retire, HSA funds remain yours

 You can move funds to the HSA

vendor of your choice (administration fees may apply)

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Triple tax benefit

• 1. Contributions are tax deductible
• 2. Earnings/Growth are 100% tax free
• 3. Withdrawals for qualified medical

expenses are tax free

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Like an IRA or 401(k). An HSA is tax-free rather than tax- deferred.

HSA Participation and Contributions

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Eligible individuals

 Being eligible means that a person

is able to make contributions into a health savings account.

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Who is eligible?

• 1. Cannot be

claimed as a dependent

Cannot be claimed as a dependent on somebody else’s taxes.

• 2. Must have an

HSA-qualified health plan

As defined by the IRS.

• 3. Must not have
• ther coverage

Includes: Medicare, Medicaid, Full purpose FSA (including through a spouse) and other insurance coverage.

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Permitted insurance coverage

 Accident  Dental  Vision  Specified Disease Coverage  Hospital indemnity if it pays a fixed cost per day, per admission, or

• ther period

 Long Term Care  Disability  Worksite employee assistance programs (Optum)

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Eligible for entire calendar year

 If an individual is eligible for the

entire calendar year, January – December (same as the IRS tax year), then he/she may contribute the full contribution maximum depending on his/her age and coverage type

 2016  Individual: $3,350  Family: $6,750

 2017

 Individual: $3,400  Family: $6,750

 If 55 and over can contribute

an additional $1,000

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How to contribute to your HSA

 Make pre-tax contributions through payroll deductions

 Payroll contributions can be changed at any time (please contact

your District Administrator for more information)

 Make post-tax contributions directly to your HSA banking vendor  Fully fund your HSA on day one (assuming you are eligible)  Make contributions anytime after your HSA is open

 Can make contributions up until April 15th for the previous tax year

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How much should you contribute?

 Participants should do their best to plan their payroll contributions

according to their medical spending needs and history.

 Best case scenario is to contribute the annual maximum per year.  It is advised that you contribute at least an amount equal to your

medical deductible

 Anthem:

 Single: $2,600  Family: $5,200

 Kaiser:

 Single: $1,500  Family: $3,000

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Who can contribute?

 You, the account holder  Employers

 Please note, SPUSD is not contributing to HSA’s at this time

 Family members

 For example, parents may want to help their children that have

recently graduated from college and are now on their own to fund their HSA accounts, assuming they are no longer being claimed as dependents on a parent’s tax return

 In this scenario, the son or daughter receives the tax deduction on their

income taxes.

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Flexible Spending Accounts & HSA’s

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FSA & HSA interaction

 The SPUSD American Fidelity FSA runs on the same plan year as

medical, October 1st through September 30th

 Using your FSA for medical, dental and vision expenses is

considered “full-purpose”

 If you currently have an FSA, it would be considered full-purpose

 An FSA used for strictly dental and vision expenses is considered

“limited-purpose”

 In order to contribute into the HSA, you must have a limited-purpose

FSA

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When can I contribute into the HSA if I have an FSA?

 If you have a $0 balance in your FSA as of September 30th, you are

eligible to contribute into your HSA starting October 1st

 If you have a remaining balance with your FSA as of September

30th, your plan requires a 70-day “grace period” to switch to a limited-purpose FSA

 In this scenario, you would be eligible to contribute starting January 1,

2017

 Please refer to your plan documents and FSA administrator for

more information

 (800) 325-0654

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HSA Recordkeeping, Taxes & Penalties

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Qualified HSA expenses

Medical

Broad set of expenses defined by the IRS, from

• ffice visits to

prescriptions.

Dental

Any treatments that are preventive or diagnostic in nature.

Vision

Eye exams, copays, eye surgery, etc.

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https://www.irs.gov/publications/p502/ar02.html#en_US_2015_publink1000178885

OTC drugs no longer eligible

 As of January 1, 2011, over-the-counter medications and medical

supplies are no longer a qualified HSA expense unless you have a prescription.

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Adult children – age 26 rule

 Children who will not have reached age 26 by the end of the

calendar year can be covered on their parents’ health plan even if:

 Not a full-time student  Not living at home  Not a tax dependent  Married

 If the child is not a tax dependent, the parents cannot use their

HSA money to pay for the adult child’s expenses.

 The adult child is an eligible individual with family HDHP coverage, so he/she

can set up his/her own HSA and contribute the full family amount

 His/her parents can still contribute the family amount to their HSA.

 Remember. the adult child would get the tax deduction.

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Domestic partners

 Domestic partners may be covered by one HSA-qualified family

policy, but they would not be eligible for reimbursement out of each other’s accounts unless they meet the IRS definition of a “qualifying relative.”

 It is preferable for domestic partners to have separate HSA

accounts to avoid a problem with reimbursement.

 If the domestic partner does not meet the definition of a

“qualifying relative”, each spouse can set up his or her own account and contribute the full family amount since they have family HDHP coverage.

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https://www.irs.gov/publications/p501/ar02.html#en_US_2015_publink1000220939

Taxes + 20% penalty

 HSA funds spent on ineligible

expenses must be reported as income and are subject to an additional 20% penalty

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Who keeps track of expenses?

Your responsibility:

 You, the account holder are

responsible for keeping track of your expenses.

 You do not need to send receipts

to the IRS unless you are audited, so it is up to you to keep track of them.

Employer/HSA Administrator:

 Not the responsibility of the

employer.

 Not the responsibility of the HSA

administrator.

 Substantiation of claims is not

required the way is it with an FSA

• r HRA.

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Form W-2: wage & tax statement

 SPUSD will send you a W-2 before the end of January, which will

include in box 12, code W a combined amount for:

 Employer contributions (not applicable at this time) +  Employee contributions through cafeteria (125) plan

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Form 1099-SA: HSA distributions

 The HSA administrator will send a 1099-SA in January/early February  Shows a combined total of distributions from your HSA

 Does not separate eligible expenses from ineligible expenses, that is

your responsibility as the account holder.

 Must be filed with your taxes

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Form 5498-SA: HSA Contributions

 Sent by the HSA administrator in May

 Not required to file with your taxes, for your records only

 Shows total HSA contributions between January 1 and tax filing

deadline (usually April 15th)

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No need to itemize for taxes

 HSA contributions reduce a

person’s taxable income – itemizing deductions is not required

 Do not need to file a Schedule A

 California does not allow for state

income tax deductions

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Form 8889: Health Savings Accounts

 You are responsible for filing form

8889 each year. The purpose of this form is to determine how much

• f your HSA contributions are

eligible to be deducted from your gross income taxes and to determine if any taxes or penalties are owed to the IRS.

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Lumenos HSA 709

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Medical Insurance Health Savings Accounts (HSA) Active Employees Effective 10/1/2016 - 9/30/2017

TYPE OF PLAN LUMENOS HSA 709 GENERAL PLAN INFORMATION In-Network Benefits Individual $6,550 Family $13,100 Individual $2,600 Family $5,200 Primary Care Office Visit $45 Specialist Office Visit $45 Inpatient Hospitalization 40% Outpatient Surgery 40% Emergency Room (deductible waived if admitted) 40% ($250 deductible) PRESCRIPTION DRUG BENEFITS LUMENOS HSA 709 Retail 30 days Generic $20 Brand (Formulary/Preferred) $45 Brand (Non-Formulary/Non-Preferred) $60 Specialty Rx (Specialty Pharmacy Only; 30-day supply) 20% (not to exceed $150) Mail Order 90 days Generic $40 Brand (Formulary/Preferred) $90 Brand (Non-Formulary/Non-Preferred) $120 Individual $3,350 Family $6,750 Individual $3,400 Family $6,750

Note: This summary of benefits is a brief outline of coverage, designed to help you with the selection process. This summary does not reflect each and every benefit, exclusion and limitation

2016 MAXIMUM CONTRIBUTIONS INTO HSA PER CALENDAR YEAR 2017 Annual Medical and Prescription Drug Combined Out-of-Pocket Limit Annual Medical and Prescription Drug Combined Deductible - Plan deductible applies unless otherwise stated Office Visit Copays

HealthEquity: Lumenos banking vendor

 Convenient access  Debit card  Online  Using our free mobile app  By telephone  Use your HealthEquity account to  Check your balance  Review transactions  Review claims  Submit new claims or documents  Send payments and reimbursements  Access tax documents

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HSA how to: doctor’s visits

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No co-pays Insurance carrier adjusts price based on discounts Pay doctor from HSA funds, if funds are available. Pay out of pocket if funds aren’t available and reimburse yourself later.

Go to the doctor Doctor sends insurance carrier the bill Optional: Enter claim in member portal

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HSA how to: pharmacy prescriptions

*This card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. The Bancorp Bank; Member FDIC.

Show your Health Plan ID card Pay with your HSA card Insurance carrier applies amount to your deductible— no paperwork needed

Go to pharmacy Pharmacy applies discount Pharmacy sends claim to insurance carrier

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Contact information

 Call toll-free, 24 hours a day, every day of the year:  (866) 346-5800

 Online:

 www.healthequity.com

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DHMO HSA #7590

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Health Savings Accounts (HSA) Active Employees Effective 10/1/2016 - 9/30/2017

TYPE OF PLAN DHMO HSA #7590 GENERAL PLAN INFORMATION In-Network Benefits Individual $3,000 Family 1 $6,000 Individual $1,500 Family 1 $3,000 Primary Care Office Visit 10% Specialist Office Visit 10% Inpatient Hospitalization 10% Outpatient Surgery 10% Emergency Room (copay waived if admitted) 10% PRESCRIPTION DRUG BENEFITS DHMO HSA #7590 Retail 30 days Generic $10 Brand (Formulary/Preferred) $30 Brand (Non-Formulary/Non-Preferred) $30 Specialty Rx (Specialty Pharmacy Only; 30-day supply) 20% (not to exceed $150) Mail Order 100 days Generic $20 Brand (Formulary/Preferred) $60 Brand (Non-Formulary/Non-Preferred) $60

Medical Insurance

Annual Medical and Prescription Drug Combined Out-of-Pocket Limit Annual Medical and Prescription Drug Combined Deductible - Plan deductible applies unless otherwise stated Office Visit Copays MAXIMUM CONTRIBUTIONS INTO HSA PER CALENDAR YEAR

Non-embedded deductible & out-of- pocket maximum

 The DHMO HSA #7590 has a non-embedded deductible

 Different from an embedded deductible, like your current PPO and

Anthem Lumenos product

 If you are a family, you have a shared deductible and out-of-

pocket maximum

 This means even if you reach your individual $1,500 deductible, the

plan will not start reimbursing for expenses until you hit the combined $3,000 deductible until you hit your shared family out-of-pocket maximum of $6,000.

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HealthCare Bank & Kaiser Employee

• utreach and support

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Welcome call Pre-appointment call Post-appointment call

• Made within one

month of employee joining deductible plan

• Addresses common

questions and introduces support tools

• Made one week

before first appointment as a deductible plan member

• Prepares employees

for their new plan experience

• Made one to two

weeks after first appointment

• Identifies level of

satisfaction and prepares employee for any additional financial responsibility

Member experience

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Step 4: Any time

• Can submit a reimbursement request with supporting

documentation for an HRA or FSA; can submit an HSA distribution request — no supporting documentation required

Step 1: Before the visit

• Get a personalized cost estimate for scheduled services

based on the plan details and whether the deductible has been reached

Step 2: During the visit

• Will typically make a payment at check-in for the

scheduled services

• Can use their Health Payment Card to pay for qualified

medical expenses or pay out of pocket

Step 3: After the visit

• May receive a bill in the mail and can pay it by writing

their Health Payment Card number in the credit card section of the bill or by using another payment method

• Will also receive a Summary of Accumulation or

Explanation of Benefits in the mail showing how close they are to reaching their deductible and out-of-pocket maximum

Investing your HSA

Anthem

 Administered through HealthEquity  Like a traditional bank, you earn

standard interest on your investment

 Low-risk Yield Plus yields higher interest

rates, but cash remains liquid

 Varying risk mutual funds

 Requires a $1,000 minimum balance

Kaiser

 Administered through HealthCare

Bank

 Like a traditional bank, you earn

standard interest on your investment

 Varying risk mutual funds

 Requires a $2,000 minimum balance

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Transitioning from Your Current Plan to an HSA

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Changing from a traditional plan to an HSA-qualified plan

 Deductible/out-of-pocket maximums run on the calendar year

 January 1st – December 31st

 When moving from a 90% PPO to the Anthem HSA:

 Deductible/out-of-pocket maximums carry over for 2016  Your deductible will start over again January 1, 2017

 Switching from any other plan to an HSA-qualified plan, the

deductible will start October 1, 2016, and begin again January 1, 2017

 Kaiser traditional plan to HSA plan will not carry over deductibles/out-

• f-pocket maximums

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Preventive Care

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What is preventive care?

 Preventive care helps protect you from getting sick

 For example, a doctor prescribes an age-appropriate colonoscopy

without any symptoms

 Would not require a copay

 Diagnostic care is used to find out what is causing an illness

 For example, a doctor prescribes a colonoscopy with existing

symptoms to see what is causing them

 Would require a copay

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Preventive care is free for you and your dependents

 Broad set of services defined by the ACA  All qualified preventive care visits require no copayment,

coinsurance or deductible. These include:

 Annual physicals/check-ups  Immunizations (including flu, Hepatitis, HPV, etc.)  Age-appropriate screenings (you and your dependents)

 For example, colonoscopies, mammograms, prostate exams, etc.

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QUESTIONS? Thank you!

Trever Hansen Health Benefits Manager Coastal Schools Employee Benefits Organization (805) 437-1508 trhansen@vcoe.org

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