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Your High Deductible Health Plan and Health Savings Account

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... Costs associated with seeking treatment Others as listed on the IRS website Non-Qualified Expenses Cosmetic surgery, teeth whitening Maternity clothes, ... – PowerPoint PPT presentation

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Title: Your High Deductible Health Plan and Health Savings Account


1
Your High Deductible Health Planand Health
Savings Account
  • Presented by
  • Iowa Bankers Insurance and Services

2
IBBP HSA High Deductible Plan
  • Deductible
  • Single 2000
  • Employee/Spouse 4000
  • Employee/Child 4000
  • Family 4000
  • Maximum Out-of-pocket
  • Single 2000
  • Employee/Spouse 4000
  • Employee/Child 4000
  • Family 4000

3
Deductible Maximum out of Pocket
  • If you notice, the deductible and maximum out of
    pocket limits are the same on the IBBP High
    Deductible Health Plan. There are no
    co-payments after the deductible is met. The
    insurance plan picks up at 100 after the
    deductible is met.

4
4000 Deductible
  • For those with multiple insured/participants
  • Employee plus Spouse
  • Employee plus Child(ren)
  • Family
  • Total 4000 must be met before claims are paid
  • Total amount can be met by one person
  • Total amount can be split between all covered
    insured

5
Deductible Waived For
  • Well child care
  • immunizations
  • Specific preventative services
  • One routine physical and related lab/x-ray
  • Newborn initial hospitalization
  • Practitioner services

6
Covered Services Applied to Deductible
  • Prescriptions
  • Visions one exam per year
  • Office visits
  • Inpatient/outpatient hospital and physician
  • Emergency services
  • Maternity care
  • Chiropractic care
  • Mental health
  • Infertility

7
Reminder!
  • There is NO 4th quarter carryover of the
    deductible.

8
Same IBBP Coverage of
  • Blue Card coverage will follow you
  • Disease Management program
  • Pregnancy Care program
  • Private Member online services found at
  • www.bankers-ins.com
  • Myhealth_at_wellmark.com

9
Office Visit Claim - Before Deductible Is Met
Traditional Plan vs. HDHP
Traditional Plan
High Deductible Health Plan
Amount Charged 96.00
Amount Paid by Plan 67.40
Deductible 0.00
Copayment 0.00
Coinsurance 9.60
Amount Not Covered 0.00
Member Responsibility 9.60
Network Savings 19.00
Amount Charged 96.00
Amount Paid by Plan 0.00
Deductible 77.00
Copayment 0.00
Coinsurance 0.00
Amount Not Covered 0.00
Member Responsibility 77.00
Network Savings 19.00

10
Office Visit Claim - After Deductible Is Met
Traditional Plan vs. HDHP
Traditional Plan
High Deductible Health Plan
Amount Charged 96.00
Amount Paid by Plan 67.40
Deductible 0.00
Copayment 0.00
Coinsurance 9.60
Amount Not Covered 0.00
Member Responsibility 9.60
Network Savings 19.00
Amount Charged 96.00
Amount Paid by Plan 77.00
Deductible 0.00
Copayment 0.00
Coinsurance 0.00
Amount Not Covered 0.00
Member Responsibility 0.00
Network Savings 19.00

11
Outpatient Claim - Before Deductible Is Met
Traditional Plan vs. HDHP
Traditional Plan
High Deductible Health Plan
Amount Charged 1974.37
Amount Paid by Plan 468.49
Deductible 1000.00
Copayment 0.00
Coinsurance 52.05
Amount Not Covered 0.00
Member Responsibility 1052.05
Network Savings 453.83
Amount Charged 1974.37
Amount Paid by Plan 0.00
Deductible 1520.54
Copayment 0.00
Coinsurance 0.00
Amount Not Covered 0.00
Member Responsibility 1520.54
Network Savings 453.83

12
Outpatient Claim - After Deductible Is Met
Traditional Plan vs. HDHP
Traditional Plan
High Deductible Health Plan
Amount Charged 1974.37
Amount Paid by Plan 1368.49
Deductible 0.00
Copayment 0.00
Coinsurance 152.05
Amount Not Covered 0.00
Member Responsibility 152.05
Network Savings 453.83
Amount Charged 1974.37
Amount Paid by Plan 1520.54
Deductible 0.00
Copayment 0.00
Coinsurance 0.00
Amount Not Covered 0.00
Member Responsibility 0.00
Network Savings 453.83

13
Pharmacy Claim - Before Deductible Is Met
Traditional Plan vs. HDHP
Traditional (Blue Rx) Plan
High Deductible Health Plan
Amount Charged 260.00
Amount Paid by Plan 90.00
Deductible 100.00
Copayment 40.00
Coinsurance 0.00
Amount Not Covered 0.00
Member Responsibility 140.00
Network Savings 30.00
Amount Charged 260.00
Amount Paid by Plan 0.00
Deductible 230.00
Copayment 0.00
Coinsurance 0.00
Amount Not Covered 0.00
Member Responsibility 230.00
Network Savings 30.00

14
Pharmacy Claim - After Deductible Is Met
Traditional Plan vs. HDHP
Traditional (Blue Rx) Plan
High Deductible Health Plan
Amount Charged 260.00
Amount Paid by Plan 190.00
Deductible 0.00
Copayment 40.00
Coinsurance 0.00
Amount Not Covered 0.00
Member Responsibility 40.00
Network Savings 30.00
Amount Charged 260.00
Amount Paid by Plan 230.00
Deductible 0.00
Copayment 0.00
Coinsurance 0.00
Amount Not Covered 0.00
Member Responsibility 0.00
Network Savings 30.00

15
HDHP HSA
  • Must have a High Deductible Health Plan
  • before
  • you can open a Health Savings Account

16
What is an HSA?
  • A tax exempt trust or custodial account
    established exclusively for the purpose of paying
    or reimbursing qualified medical expense
  • Must be administered by a bank, insurance company
    or a Third Party Administrator (TPA)
  • Can not be opened without coverage under a
    qualifying high deductible health plan

17
2013 Federal Limits for Savings Account
Health Plan
  • Maximum contribution to the HSA
  • 3250 for individual coverage (2012 - 3100)
  • 6450 for family employeespouse or children
    (2012 - 6250)
  • Plus an additional 1000 catch up contribution
    for eligible individuals 55 or over
  • Minimum deductible for Health Plan
  • 1250 for individual coverage
  • 2500 for family employeespouse or children
  • Maximum out-of-pocket for Health Plan
  • 6250 for individual coverage (currently 6050)
  • 12,500 for family employeespouse or children
    (12,100)

18
Qualifications to Open Account
  • Must have qualifying coverage on first day of the
    month
  • Must not be receiving Medicare or Social Security
  • Must not be listed as a dependent on another tax
    return
  • Must not be a participant in a Medical Flex
    Spending account. Your spouse must not be a
    participant in a Flex Medical Spending Account
  • Must not have other qualifying insurance coverage

19
Other Acceptable Coverage
  • Dental, vision or Limited Scope Medical Flex
    Spending
  • Disease Management or Preventative Care
  • Employee Assistance Programs
  • Workers Comp, disability
  • Auto coverage for medical, travel insurance, etc
  • Supplemental insurance such as accident or cancer
  • Business liability

20
Benefits of the HSA
  • Contributions are
  • Tax deductible or
  • Pre-tax
  • Can change payroll deduction amount during year
    as allowed by payroll
  • Distributions are
  • Tax Free
  • If for qualified expenses, will carry a 20
    penalty plus tax if not qualified and before age
    65
  • Earnings grow
  • Tax deferred

21
Contributions
  • Who may contribute?
  • The account owner
  • The spouse or family member
  • The employer
  • Federal Limits for 2013
  • 3250 for individual coverage
  • 6450 for family employeespouse or children
  • Both account holder and spouse may open an
    account. Total contributions between two accounts
    must not be more than 6450
  • 1000 catch-up contribution for those 55 or older
  • If both account owner and spouse are covered
    under health plan and 55 or older, then both may
    contribute, but spouse must open an account

22
Date Account is Opened
  • The date the account is opened is critical for
    claim payments. The first contribution must be
    made after the coverage begins, however, claims
    incurred before the account is open are not
    eligible distributions. The HSA account becomes
    effective the date the account is opened and
    funded.

23
Total Contributions
  • IRA rollovers/transfers do count towards your
    total annual contribution limits for the year
  • Items that do not count towards your total annual
    contributions are
  • Rollovers from other HSA accounts
  • Direct trustee to trustee transfers
  • Rollovers form an Archer MSA
  • Direct rollovers from Health FSA or HRA

24
Funding Your Contributions
  • Deposit the savings between your current health
    plan premium and the premium for the new HDHP
    coverage
  • Instead of funding your Medical Flex Spending
    Account, revert your dollars to your new Health
    Savings Account
  • If money allows, do an additional contribution
    through payroll deduction up to the maximum
    allowable annual contribution

25
Excess Contributions
  • Contributions made in excess of your annual
    allowable limit for the current tax year are
    subject to a 6 excise tax each year they remain
    in the account
  • A correction can be made to the account to remove
    the excess contribution by April 15 of the next
    year (federal tax filing deadline)
  • Check with your custodian for procedures
  • Amount of the excess contribution PLUS the
    earning must be removed
  • Removal of amount is not reported as a
    distribution

26
Distributions
  • Tax Free
  • If made for a qualified medical expense
  • Taxable
  • If made for a non-qualified medical expense
  • Carries a 20 penalty if made before age 65

27
Qualified Medical Expenses
  • Premiums for
  • COBRA, Long Term Care (expense also) Medicare
  • Medical doctors, Nursing services
  • Dental and optical
  • Physical therapy, chiropractic
  • Emergency care
  • Acupuncture, alcohol or drug treatment
  • Prescribed weight loss program, birth control
  • Prescription drug, medical equipment
  • Costs associated with seeking treatment
  • Others as listed on the IRS website

28
Non-Qualified Expenses
  • Cosmetic surgery, teeth whitening
  • Maternity clothes, diaper services
  • Health club dues
  • Electrolysis, hair transplant
  • Household help, babysitting
  • Marijuana or other controlled substances
  • Food supplements or vitamins if not prescribed by
    a doctor
  • Swimming lessons or weight loss programs
  • Funeral expenses
  • Others as listed on IRS website

29
Distributions Used For
  • Account owner
  • Account owners spouse
  • Spouse not required to be on HDHP insurance
  • Account owners dependent(s)
  • Dependent not required to be on HDHP insurance

30
Distributions Made After 65
  • For medical expenses are totally tax free
  • For non-medical expenses, pay income tax only
  • No more penalty

31
Mistaken Distribution
  • Must be corrected before April 15 of the
    following year (federal tax filing deadline)
  • Must follow the rules of the custodian
  • Replacement of the distribution is not counted as
    a contribution for reporting purposes

32
Tax Reporting
  • W-2 from employer if contributions are made on a
    pre-tax basis through payroll
  • 5498-SA (contributions) form prepared by
    custodian
  • 1099-SA (distributions) form prepared by
    custodian
  • 8889-HSA completed by account holder and filed
    with Federal Tax Return.
  • This is a simple reporting of account activity,
    balance, contributions, and distributions

33
Presented by
  • Iowa Bankers Insurance Services
  • 8800 NW 62nd Avenue
  • PO Box 6210
  • Johnston, IA 50131-6210
  • Phone 515-286-4300
  • Toll Free 800-258-1415
  • Fax 515-286-4244
  • Email flexadmin_at_bankers-ins.com
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