School District of Beloit Health and Prescription Benefits Overview - - PowerPoint PPT Presentation

Health and Prescription Benefits Overview

School District of Beloit

SDB Health Care Plan Options

• The School District of Beloit offers em ployees the choice

betw een tw o health plans: – An HRA plan where the School District funds $1500 per single contract; $3000 per family contract to pay for first dollar deductible expenses a covered plan participant may incur during the plan year. If an employee leaves the health plan, these funds stay with the School District. – An HSA plan where the School District makes an annual deposit of $1500 per single contract; $3000 per family contract into a Health Savings Account (HSA) that is owned by the

• employee. In this plan, unused funds are kept by the

employee.

• For mid-year enrollees, HRA/ HSA contributions will be calculated
• n a pro-rata basis with 1/ 12th per month of the anticipated

service period being pre-funded on the 1st of the month following the enrollment in the Employer Sponsored Group Health Plan.

• SDB reviews HRA/ HSA employer contributions on an annual basis.

SDB Major Plan Difference:

• The first m ajor difference betw een the plans is the

prescription drug benefit outlined below : – Under the HRA plan, prescription drugs are subject to a $7 generic copay; $16 preferred brand copay; and a 50% coinsurance for non-preferred brands per 1-month supply. – Under the HSA plan, all prescription drugs are subject to a combined medical/ prescription drug plan year deductible of $2500 per single/ $5000 per family, before the prescription drug card copay benefit applies. (Remember the School District provides you with $1500/ $3000 in an HSA account to assist in covering these expenses)

• Therefore one m ajor factor for determ ining w hich plan best

fits your individual/ fam ily needs is your personal utilization

• f prescription drugs.

Prescription Plan Design - Restat

• To receive coverage for your prescriptions you m ust

utilize the services of an Align pharm acy. A list of pharm acies is included at w w w .restat.com . – A Mail Order Benefit is also available and inform ation pertaining to this benefit is available at w w w .catam aranhom edelivery.com

• For the HSA Plan, the copaym ents apply AFTER your

deductible has been m et.

• Please refer to the SDB Health Plan Docum ent located
• nline for specific plan lim itations/ exclusions.

Prescription Drug Card Benefit – Copay Per 1 Month Supply Align Pharmacies Only Generic Copay $7 Preferred Brand Copay $16 Non-Preferred Brand Copay 50%

SDB Major Plan Difference:

• The other m ajor difference betw een the plans is how the

fam ily deductible is applied: – Under the HRA plan, all individuals covered under your plan are limited to a per individual deductible of $2000* , with a family cap for all members of $4000* . Again, the School District provides you with $3000 per family contact to fund this deductible amount. – Under the HSA plan, there is no individual deductible cap. Therefore one family member may satisfy the full family deductible of $5,000* . Again, the School District provides $3,000 in an HSA account owned by you to help pay these deductible expenses.

• So if a fam ily m em ber has an ongoing m edical condition,

this w ill be som ething you w ant to consider.

* Assumes utilization of PPO Network Providers Only.

SDB PPO Provider Office Visit Copays:

• Both the HRA and the HSA plans have the follow ing office

visit copaym ents for services obtained at a PPO Netw ork

• Provider. You are responsible for the copay, in addition to

the plan deductibles, for each date of service.

– W ellness Benefits – Paid at 1 0 0 % under both plans as required by the USPSTF recommendations. – Physician Office Copay - $ 2 0 per visit (copay waived at BHS) (includes Specialists, Therapies and Chiropractic Care) – Urgent Care Copay - $ 3 0 per visit (copay waived at BHS) – Em ergency Room Copay - $ 7 5 per visit (copayment is waived if admitted)

• Under the HRA plan, you would be responsible for the copayment,

as the HRA money can only be used for deductible expenses. You may elect to put money in an FSA account to pay for these copays.

• Under the HSA plan, you are also responsible for the copayment,

however HSA money can be used to pay these expenses.

SDB Health Care Plan Com parison

HRA Plan HSA Plan PPO Provider Non-PPO Provider PPO Provider Non-PPO Provider Deductible Individual $2,000 $4,000 $2,500 $5,000 Family* $4,000 $8,000 $5,000 $10,000 Coinsurance Paid By the Plan Wellness 100%, no deductible Not Covered 100%, no deductible Not Covered Basic Benefits 100%, after deductible 70%, after deductible 100%, after deductible 70%, after deductible Major Benefits 80%, after deductible 70%, after deductible 80%, after deductible 70%, after deductible Out-of-Pocket Maximum** Individual $4,000 $8,000 $5,000 No Limit Family $8,000 $16,000 $10,000 No Limit * Under the HSA Plan option, one family member can satisfy the full family deductible. **The out-of-pocket includes: medical copayments, coinsurance and deductible expenses. Once the out-of-pocket maximum has been met the plan pays 100% of eligible expenses.

SDB Deductible Plan Analysis/ Rollover

HRA Plan HSA Plan PPO Provider Non-PPO Provider PPO Provider Non-PPO Provider Deductible Individual $2,000 $4,000 $2,500 $5,000 Family* $4,000 $8,000 $5,000 $10,000 HRA/HSA Funding Individual $1,500 $1,500 Family $3,000 $3,000 IF you use SDB HRA/HSA funds for your deductible expenses, your liability would be as follows: Individual $500 $2,500 $1,000 $3,500 Family* $1,000 $5,000 $2,000 $7,000 IF you do not use the full HRA/HSA Funded by SDB, any unused funds up to the following amount will ROLLOVER and be available for you to use in future plan years. Individual $500 per year $1500 per year Family $1000 per year $3000 per year To a Maximum Accumulation** of: Individual $3000 Balance Unlimited Family $6000 Balance Unlimited * Under the HSA Plan option, one family member can satisfy the full family deductible. **HRA Accumulations can only be used for deductible expenses.

Health Plan Claim s Processing:

• The SDB Health Care Plan is self-funded with Prairie State

Enterprises (PSE) administering the claims out of Sheboygan, WI.

• PSE will administer medical plan payments for the HRA and HSA

health plans.

• PSE will also administer the additional deductible payments eligible

under the HRA plan. In most cases, this will be an automatic claims process with no manual intervention required by the plan participant.

• Additional HRA deductible payments made on your behalf will be

funded by SDB and paid directly to the provider.

• PSE makes medical, HRA and FSA claim payments on a weekly

basis.

• At the end of the month, PSE mails a consolidated Explanation of

Benefits (EOB) of all medical plan payments and HRA deductible plan payments to your home. Should you wish to have access to your EOBs sooner, you can access those online.

HRA Plan Claim s Processing:

• HRA payments made under this plan are secondary to any Other

Coverage you may have as a participant under any other medical plan.

• PSE will pend claims received to verify whether Other Coverage is

available.

• Once a year you will be asked by PSE to update your “Other

Coverage” information.

• If you do have Other Coverage, and are covered under the HRA

plan, you will need to submit the Explanation of Benefits (EOB) under that Other Coverage, prior to benefits being payable under the HRA plan.

• Why? Benefits from the HRA account are tax free to you as the
• employee. The IRS does not allow for distribution of funds under

the HRA that might result in a profit to the employee as the result

• f duplicate payment under multiple plans.

Detailed Health Plan I nform ation:

• This presentation was meant as a high level overview of your

benefits, with some practical advise on how to evaluate which plan would work best for you.

• Each year you will be provided with an Open Enrollment
• pportunity to elect which health plan option best meets your

needs.

• Each of you are receiving the Summary of Benefits and Coverages

(SBC) for each plan you are eligible to enroll in.

• For a complete list of coverages, limitations and exclusions, please

refer to the School District of Beloit Health Care Plan Document located on the School website and also on the Prairie States website.

Health Plan Questions?

What is an HSA?

• A health savings account ( HSA) is an account

that you can use to pay m edical expenses. – Must be in conjunction with a high-deductible health plan (HDHP) – You own the account, but both you and your employer can contribute funds – Tax-advantages: contribute pre-tax money, funds accrue tax-free and withdraw funds tax- free (if used for eligible medical expenses)

Benefits of an HSA

• Triple tax advantage means you save money on

your health care expenses

• Funds rollover each year, so you can use your HSA

to save tax-free money for retirement

• You own the account, even if you leave the

company

High-Deductible Health Plan

• HSAs can only be offered w ith a high-deductible

health plan ( HDHP) .

• This is a plan that m ust provide coverage as

follow s:

– Minim um deductible:

• $1,250 single, $2,500 family (2014 limits, established by the IRS)
• $1,300 single, $2,600 family (2015 limits, established by the IRS)

– Maxim um annual out-of-pocket for netw ork providers:

• $6,350 single, $12,700 family (2014)
• $6,450 single, $12,900 family (2015)
• Though the deductible is higher for this plan than

traditional plans, your m onthly prem ium is low er, and HSA funds can pay for m edical expenses subject to the deductible.

How Does The HSA/HDHP Work?

• You contribute m oney to the HSA in the follow ing

w ays: – Through payroll deduction on a pre-tax basis. SDB has a preferred arrangement with a financial institution, or you can work directly with your own bank/ credit union. SDB will withhold and appropriately transfer deposits to your financial institution of choice; OR – A lump sum deposit usually made on an after tax

• basis. Amounts deposited in this manner can be

taken as a deduction when filing IRS taxes.

Who is Eligible for an HSA?

• Anyone w ho is:

– Covered by an HDHP – Not enrolled in Medicare – Not covered under other health insurance* – Not another person’s dependent * Other health insurance does not include: specific

disease or illness insurance, accident, disability, dental care, vision care and long-term care insurance

HSA Contribution Limits

• Each year, the I RS sets contribution

lim its

– These limits are for the total funds contributed, including company contributions, your contributions and any other contributions.

• 2 0 1 4 lim its:

– $ 3 ,3 0 0 for individual coverage – $ 6 ,5 5 0 for fam ily coverage

• 2 0 1 5 lim its:

– $ 3 ,3 5 0 for individual coverage – $ 6 ,6 5 0 for fam ily coverage

HSA Contributions

• You are allowed to contribute the entire year’s limit

when you first become eligible for the HSA, as long as you are still eligible on the first day of the last month of your tax year (December 1 for most taxpayers).

• However, if you join mid-year and contribute the

maximum amount to your HSA, you must remain eligible for at least 12 months after the last day of the last month of that tax year (December 31 for most taxpayers), or you will be subject to taxes and penalties on the amount you contributed.

• We encourage you to work with your tax consult or

financial planner in setting up these types of accounts.

Catch-Up Contributions

• For individuals ages 55-plus, the IRS allows

additional “catch-up contributions.”

• Eligible individuals may contribute an extra $1,000

for the year (for 2014/ 2015).

• This rule is meant to help save additional money

for retirement.

HSA Distribution Rules

• Distributions from your HSA are tax-free if they are

taken for “qualified medical expenses.”

• Your HSA can only be used for expenses that are

incurred on or after the date the HSA was established.

• However, HSA funds can be used for expenses from

a prior year, as long as the expenses incurred on or after the date the HSA was established.

HSA Distribution Rules

• HSA distributions can be taken for qualified

m edical expenses for the follow ing people:

– The account holder (person covered by the HDHP) – Spouse of that individual

• Even if not covered by the HDHP

– IRS eligible Dependents of that individual

• Even if not covered by the HDHP
• Please note that the definition of a Dependent under

your Health Plan is not the same as the IRS definition of an eligible dependent and could provide some gaps in coverage. A separate HSA account can be set up for the dependent if they are not an IRS dependent of another individual

Qualified Medical Expenses

• The IRS defines expenses that are

considered “qualified medical expenses” for HSA distributions.

• Expenses must be primarily to treat or

prevent a physical or mental defect or illness.

• I f you use HSA funds for expenses

beyond w hat the I RS defines as qualified, you w ill be subject to incom e tax on the distribution and an additional 2 0 percent penalty.

Distributions – Age 65-plus

• For individuals age 6 5 and older, HSA

distributions can be used for non-qualified m edical expenses w ithout facing the 2 0 percent penalty. – However, income taxes will apply for non- medical distributions. – This rule is regardless of whether the individual is enrolled in Medicare.

Qualified Medical Expenses

• Exam ples of qualified m edical expenses

include:

– Most m edical care that is subject to your deductible ( copays, coinsurance, doctor visits, inpatient or

• utpatient treatm ent, etc.)

– Prescription drugs – Over-the-counter drugs, only if you obtain a prescription – I nsulin ( w ith or w ithout a prescription) – Dental and vision care – Select insurance prem ium s

• COBRA, qualified long-term care insurance, health insurance premiums

paid while receiving unemployment benefits, health insurance after you turn 65 except for a Medicare supplemental policy

• I f you have previously had coverage under an FSA plan,

the eligible qualified m edical expenses are the sam e.

Ineligible Medical Expenses

• Expenses that are not considered

“qualified m edical expenses” include:

– Insurance premiums (other than the exceptions listed on the previous slide) – Over-the-counter drugs (unless a prescription is retained from a physician – insulin is an exception) – Surgery purely for cosmetic reasons – Expenses covered by another insurance plan – General health items such as tissues, toiletries, hand sanitizer

Recordkeeping

• W henever you use HSA funds to pay for a

m edical expense, you should keep your receipt.

• You m ay need to dem onstrate to the I RS that

HSA distributions w ere for qualified m edical expenses.

• I f the I RS requests receipts for verification

purposes, failure to provide those receipts could result in having to pay a penalty.

Please consult w ith your tax advisor or financial planner prior to setting up accounts of this type. The intent of this presentation is not to provide legal or financial advise, but to provide a general overview of how these accounts m ight benefit you.

HSA Account Questions?

Flexible Spending Plan Rem inder

A Section 1 2 5 Flexible Spending Account allow s em ployees to put m oney aw ay on a pre-tax basis to pay for: $ Un-reim bursed Medical, Dental and Vision expenses $ Dependent Care Expenses Tax Advantage - Estim ated Em ployee Savings:

• 2 5 % - 3 0 % of the contribution based on

em ployee tax bracket.

• No Federal, State or FI CA taxes taken on

deduction am ount.

• To take a federal tax deduction w hen filing your

incom e taxes, the m edical/ dental/ vision expenses m ust exceed 1 0 % of your incom e in 2 0 1 4 .

W ho should participate?

I f you have any of the follow ing “know n” expenses, you should definitely consider participating in the FSA plan:

$ Health Plan Deductibles, Coinsurance & Copays. $ Medically approved procedures to treat an illness or injury that m ay not be covered by your health plan ( Chiropractic, Acupuncture, hearing aids & laser eye surgery) . $ Dental & Vision Expenses $ Over the counter m edications ( allergy m eds, antacids, pain relief, cold m edicine, antibiotic cream s, etc.) ARE ONLY ELI GI BLE W I TH A PRESCRI PTI ON FROM YOUR PHYSI CI AN.

Note: Cosm etic or convenience services ( teeth w hitening, etc.) as w ell as OTC m edications such as vitam ins w hich are not m eant to treat an illness or injury w ould NOT be eligible for reim bursem ent.

Personal Exam ple:

Myself: Vision Exam $125 Contacts $250 Prescriptions ($30/mo) $360 $610 Daughter: Vision Exam $125 Contacts $400 Orthodontia ($95/mo) $1,140 $1,845 Son: Vision Exam $125 Glasses $125 $250 Husband: Vision Exam $125 Contacts $100 $225 Total: $2,750 Maximum Allowed Contribution $2500 Estimated Tax Savings (27%*) $675

FSA Lim it on Medical/ Dental / Vision Expenses

• The m axim um am ount you can put in a Flexible

Spending Account to pay for these expenses is $ 2 ,5 0 0 .

• Therefore, based on m y personal exam ple, I w ould

“flex” $ 2 ,5 0 0 for the calendar year.

• I f I ’m paid every 2 w eeks, I w ould have $ 9 6 .1 5

deducted from m y paycheck. The am ount m y check is actually reduced w ill be less than $ 7 5 .0 0 , since I w ill not have state, federal or FI CA tax deducted from this am ount.

• My full election am ount of $ 2 ,5 0 0 is available to m e

Septem ber 1 st to help m e pay for m y m edical/ dental and vision expenses.

• Estim ated savings to m e: $ 6 7 5 in taxes.
• Benefit to m e – Ability to budget m y out-of-pocket

m edical expenses.

Dependent Care Expenses

Dependent Care FSA $ Allow s em ployees to put aw ay up to $ 5 ,0 0 0 on a pre-tax basis to pay for day care expenses incurred so the em ployee can w ork. $ Eligible Expenses m ust satisfy the follow ing: $ The day care provider must file taxes and be willing to write you a receipt for services. $ Dependents must be less than 13 years of age and claimed on your taxes. $ Dependent Care may also apply to a physically or mentally challenged spouse or family member for whom you are legally responsible and claim as an exemption on your taxes. $ Em ployee Note: You can only be reim bursed for am ounts previously w ithheld from your paycheck.

How Does I t W ork?

$ If you decide to enroll in the program you will be required to make an Annual Election regarding the amount of money they wish to put into each account. $ This amount will be taken out of each paycheck — before taxes — in equal installments throughout the plan year. These dollars are then placed into your FSA. $ Employees cannot change the Annual Election unless they have a qualified family status change, or a loss of other coverage. $ Expenses must be carefully determined as funds not used by the employee will be forfeited to the plan. Use it or Lose it! $ Em ployee Advantage – Cash Flow – Your full Annual Election for your medical FSA will be available to you as of the first day of the plan year. If you use more money than you have had deducted from your paycheck, you will pay back the amount over the course of the plan year.

Rem em ber:

• Claim s m ust be incurred betw een Septem ber

1 , 2 0 1 4 and August 3 1 , 2 0 1 5 .

• Claim s m ust be filed for reim bursem ent

w ithin 9 0 days follow ing the end of the plan year or prior to Novem ber 3 0 , 2 0 1 5 .

FSA Questions?