CCAP 101

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• CCAP 101
• Understanding Consumer Directed Healthcare (CDH)
  - including HDHPs and HSAs

Presented by Scott M. Stevens, RHU CDH
Specialist/Employee Benefits Consultant
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Sign of the times
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WHY ARE WE EVEN HAVING THIS DISCUSSION?
Per-Employee/Employer Health Care Costs 2001 and
2006
Source 2006 Towers Perrin health care survey
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What Is Consumer-Directed Health Care (CDH)?

• A philosophical shift from traditional managed
  care plans.
• A demand side approach to healthcare cost
  control (vs. supply side measures including
  managed care)
• A new model for health care delivery, based on
  consumers (rather than third-party payers)
  directing their own health care dollars to the
  most efficient and effective treatment options

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Components of CDH
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Common ingredients of consumer directed plans

• Make consumers aware of the true cost of their
  care
• Engage members in health care purchases
• Give members a financial stake
• Provide resources for informed decisions

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YOUR decision support tools

• www.myuhc.com/groups/cu09
• Estimate treatment costs for conditions
• Plan cost estimator

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(No Transcript)
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Adoption of CDHPs
Source Inside Consumer-Directed Care, Nov. 4,
2005
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Local companies offering consumer-directed plans
Nebraska AIDS Project
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Exactly What Are Out of Pocket Health Ins. Costs?

• Premiums (What comes out of your paycheck)
• Copays (Office visit, facility, Rx)
• Deductibles (Ind., Family, Per confinement)
• Coinsurance (20, etc.)
• Plan Penalties (Precertification, PPO, etc.)
• Our goal To reduce your out of pocket expenses!

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What is a Health Savings Account (HSA)?

• It is a tax-exempt savings account established to
  pay certain medical expenses in conjunction with
  a qualified high deductible health insurance
  plan.
• Note Federally tax qualified MSAs were made
  available through a health insurance reform law
  that became effective January 1, 1997.

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2 Components of an HSA

• A tax-deferred interest bearing or investment
  transaction account (HSA) and
• A qualified, high deductible health plan (QHDHP)

HSA
HSA
QHDHP
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Your CCAP is Comprised of

• Health Insurance Plan
• All medical care claims are filed through them
• Decision support tools

• Savings account to invest money used for
  healthcare
• Provides debit card to pay medical expenses
• Funds in excess of 1,000 swept to investment
  account
• Online bill pay

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What is a Qualified High Deductible Plan
(QHDHP)for 2009

• Individual annual deductible of at least 1,150
  and no more than 5,800 with an out of pocket
  maximum of no more than 5,800 (CU out pocket
  max. is 3,000)
• Family annual deductible of at least 2,300 and
  no more than 11,600 with an out of pocket
  maximum of no more than 11,600 (CU out of pocket
  max. is 6,000)
• No copays
• CCAP meets the definition

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HSA Contributions

• Individual contribution is limited to 3,000 in
  09
• Family contribution is limited to 5,950 in 09
• Excess contributions are subject to a 6 excise
  tax plus ordinary income tax.
• Contribution limits increase each year according
  to federal law.
• Contributions are made on a pre-tax basis if made
  through payroll otherwise they are tax
  deductible
• Contributions can me made by Employer, Employee,
  or both.
• Age 55 and older can make catch up
  contributions of an additional 1,000, for 2009
  and thereafter (Note in order for both employee
  and spouse to make a catch up contribution, the
  spouse must have their own HSA.)

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HSA Distributions

• No tax or penalty on distributions used for
  qualified expenses
• Penalty of 10, plus ordinary income tax, if
  distributions used for non-qualified expenses
• Penalty goes away at age 65 and the death of the
  account holder (tax still applies)
• If distributions continue to be used for
  qualified expenses, YOU NEVER PAY TAXES

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Premium Differences
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Premium and HSA Contributions
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Which plan is better on a large claim?

• Employee Family Coverage
• (CCAP vs. PPO 1)

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How About On A Small Claim?(CCAP vs. PPO 1)

• Employee Family Coverage (same as previous
  family)

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Which plan is better on a large claim?

• Employee Family Coverage
• (CCAP vs. PPO 2)

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How About On A Small Claim? (CCAP vs. PPO 2)

• Employee Family Coverage (same as previous
  family)

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What if you have Employee Only Coverage? (CCAP
vs. PPO 1)
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What if you have Employee Only Coverage? (CCAP
vs. PPO 2)
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To Summarize, the KEY isMORE CASH IN YOUR POCKET
IN ANY CASE!

• If you hardly ever go to the doctor, youre
  going to save premium dollars AND get tax free
  cash with the HSA plan
• If you (and if applicable, your dependent(s))
  receive a great deal of medical care, your out of
  pocket expenses will be less with the HSA plan

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HSA Advantages for Employees

• Reduces employee out of pocket costs
• Rewards health conscience employees with cash
• Reduces income tax, increases take home pay
• Provides additional long term savings plan
• Offers more freedom of healthcare provider choice
• Can be reimbursed for a wide range of medical
  expenses including dental, vision, and certain
  premiums

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HSA Future Growth Projections
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Questions?