2011 Health Insurance Benefit Plan Overview

Presented to the Employees of:

Presented by:Scott M. Stevens, RHU,CDHCEmployee Benefits/CDHC Specialist

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INSANITY: “doing the same thing over and over

again and expecting different results.”

Albert EinsteinUS (German-born) physicist (1879 - 1955)

Introducing Douglas County’s 2011 Consumer Directed Health (CDH) Plan Option

Qualified High Deductible/Health Savings Account (HSA) Health Plan

Deductible – Individual $3,000

Deductible – Family $6,000

Coinsurance (PPO/Non-PPO) 0% PPO/ 50% Non-PPO

Preventive Care 100%, no copay or deductible, no limit

Tax Free Contribution to Employees(Based on coverage 1/1/11-12/31/11)

$500 (Employee Coverage)$1,000 (Employee + Dependent(s)) Cov.

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“Consumer-Directed” Healthcare

What’s the theory behind “Consumer-Directed" health care, a new trend in health benefits design?– Introduces people to the actual cost of medical

care– Encourages shrewder purchases of medical

services, diagnostic tests and prescription drugs – Helps hold down the rising cost of health

insurance

Components of CDH…

Preventive Care Benefit• Covered services are paid at

100%.

• no deductible or coinsurance for healthcare deemed and coded as preventive in nature, provided by a network provider

• e.g., routine annual exam, mammogram, pap smear, colorectal cancer screening, cardiac stress tests, immunization, radiology/X-ray, pathology/lab,etc.

• Vision and Hearing exams

TraditionalPlan

QHD/HSA Plan

Copay $30 $0

AnnualLimit

$500 None

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Plan ComparisonPlan ComparisonTraditional vs. QHDHP/HSATraditional vs. QHDHP/HSA

Plan ComparisonPlan ComparisonTraditional vs. QHDHP/HSATraditional vs. QHDHP/HSA

Traditional Plan ($1000/$2000)Copays:

Office Visit:$30Prescription Drug: $15/$30/$60Facility (ER/UC): $250/$50

Annual DeductibleIndividual: $1,000Family: $2,000 (imbedded)

Coinsurance Out of PocketIn/Out Network: 80%/60%Individual (PPO): $2,500 Family(PPO): $5,000

Total Out of PocketIndividual = $3,500 + copaysFamily = $7,000 + copays

QHD/HSA Plan($3000/$6000)

Copays:Office Visit: N/APrescription Drug: N/AFacility (ER/UC): N/A

Annual DeductibleIndividual: $3,000Family: $6,000 (aggregate)

Coinsurance Out of PocketIn/Out Network:100%/50%Individual (PPO): $0Family (PPO): $0

Total Out of PocketIndividual = $3,000 - HSAFamily = $6,000 - HSA

Comparison of Potential Annual Plan Costs

Employee: $3,500+ $2,500-

Employee & Dependent(s): $7,000+ $5,000-

Notes:

*copays for Rx, Office Visits, ER, and UC continue to apply.

** Employee HSA deposits would reduce these amounts

QHD/HSA Plan**Traditional/PPO Plan*

After Douglas County’s HSA Contributions ($500 Employee/$1,000 Employee + Dependent(s))

Douglas County’s CDH Plan Option Combines Health Insurance with a Bank/Spending Account

HEALTH INSURANCE (Qualified High Deductible

Health Plan)

SPENDING ACCOUNT (HSA)+

Premium and HSA Contributions – (total cost, before Douglas County contribution)

Coverage Coverage StatusStatus

Traditional Traditional Plan – Per Plan – Per

MonthMonth

Qualified/HSA Qualified/HSA Plan – Per MonthPlan – Per Month

Douglas County HSA Douglas County HSA Contribution – Per Contribution – Per

Month *Month *

Employee Employee OnlyOnly

$540.25$540.25 $556.46$556.46 $41.67$41.67

Employee Employee + 1 + 1 DependentDependent

$991.05$991.05 $1,020.78$1,020.78 $83.33$83.33

Employee Employee + Family+ Family

$1,335.81$1,335.81 $1,375.88$1,375.88 $83.33$83.33

* IMPORTANT: Must elect the HSA Qualfied Plan in order to receive the tax free contribution to you bank account.

Premium and HSA Contributions – (using 93%/Employee Covg./85% Dependent Covg.)

Coverage Coverage StatusStatus

Traditional Traditional Plan – Per Plan – Per

MonthMonth

HSA Qualified HSA Qualified Plan – Per Plan – Per

MonthMonth

Douglas County HSA Douglas County HSA Contribution – Per Month Contribution – Per Month

**

Employee Employee OnlyOnly

$37.82$37.82 $38.95$38.95 $41.67$41.67

Employee Employee + 1 + 1 DependentDependent

$105.44$105.44 $108.60$108.60 $83.33$83.33

Employee Employee + Family+ Family

$157.15$157.15 $161.86$161.86 $83.33$83.33

* IMPORTANT: Must elect the HSA Qualfied Plan in order to receive the tax free contribution to you bank account.

Your CDH Plan Option is Comprised of…

• Health Insurance provider• Processes medical care

claims • Tracks eligibility/benefits• Billing• Decision support tools

• Bank/HSA Custodian • Savings account to invest

money used for healthcare• Provides debit card to pay

qualified medical expenses• Tracks deposits, withdrawals,

interest, etc.

Bank (to be determined)United Healthcare

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Out of Pocket Costs - Defined• Premiums (What comes out of your

paycheck)

• Copays (Office visit, facility, Rx)

• Deductibles (Ind., Family, Per confinement)

• Coinsurance (20%, etc.)

• Plan Penalties (Precertification, Non-PPO, etc.)

Goal – REDUCE YOUR OUT OF POCKET EXPENSES!

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Let’s Look at an Example of an Actual Claim(Using a 93% Employee/85% Dependent Premium Cost Share)

Employee Only Coverage

Traditional Plan QHDHP/HSA

Example: Surgery with admission $10,000 $10,000

Deductible $1,000 $3,000

Coinsurance 20%=$1,800 0% =$0

Out of pocket (max. not met, still have $700 more to meet)

$2,800 $3,000 – HSA ($500) = $2,500

Office Copays (5 office visits) $30 x 5=$150 $0

Emergency Room Copay $250 N/A

Rx Copays (2 per mo. For 12 mos.)

$30x2x12=$720 $0

Premium Contribution $38 x 12= $456 $39 x 12 = $468

Actual Out Of Pocket Expense $4,376 $2,968 - H$A = ?

Let’s Look at a Example of a Actual Claim(Using a 93% Employee/85% Dependent Premium Cost Share)

Employee + 1/Employee + Family CoverageTraditional Plan QHDHP/HSA

Example: Surgery w/ admission $20,000 $20,000

Deductible $1,000 $6,000

Coinsurance 20%=$2,500 0% =$0

Out of pocket $3,500 $6,000 – HSA ($1000) = $5,000

Office Copays (4 office visits) $30 x 4=$120 $0

Urgent Care Copay (2 @ $50) $100 None

Rx Copays (3 per mo. ;12 mos) $30x3x12=$1,080

$0

Premium Contribution: E+1:

E + Fam:

$105x12= $1,260

$157x12= $1,884

$109x12 = $1,308

$162x12 = $1,944

Out Of Pocket Expense: E+1:

E+F:

$6,060

$6,684

$6,308

$6,944

The family in our previous example has a 2nd claim…Employee + 1/Employee + Family Coverage

Traditional Plan QHDHP/HSA

Example: ER with Treatment $2,500 $2,500

Deductible $1,000 $0 (already met)

Coinsurance 20%=$300 $0

Out of pocket

(still have $2,200 more to meet)

$1,000+$300 =

$1,300

Office Copays (2 office visits) $30 x 2 = $60 $0

ER Copay ($250) $250 $0

Rx Copays (1per mo. ;12 mos) $30x12=$360 $0

Total plan related out of pocket incurred on 2nd claim:

$1,970 $0

Out Of Pocket Expense: E+1:

E+F:

$8,030

$8,654

$6,308

$6,944

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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.

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2 Components of an HSA

• A tax- free interest bearing or investment transaction account (HSA); and

• A qualified, high deductible health plan (QHDHP)

HSAHSA

QHDHP

HSA Eligible Individuals (who can have an HSA)…

• Must have a QUALIFIED HIGH DEDUCTIBLE PLAN• Must NOT be enrolled in Medicare• Cannot be claimed as a dependent on another’s income

tax return• Have not used VA benefits for past 90 days• May not be covered by any other insurance, except

what is permitted:– Specific disease or illness– Hospital Daily Income– Accident– Dental/Vision– Disability– Qualified Long-Term Care

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Qualified High Deductible Plan (QHDHP)

• Individual annual deductible of at least $1,200 and no more than $5,950 with an out of pocket maximum of no more than $5,950 (Douglas County’s CDH Plan has a $3,000 deductible for Individual/Employee Only)

• Family annual deductible of at least $2,400 and no more than $11,900 with an out of pocket maximum of no more than $11,900 (Douglas County’s CDH Plan has a $6,000 deductible for family coverage)

IMPORTANT: QHDHP’s have aggregate rather than imbedded deductibles, meaning the entire deductible amount must be satisfied by 1 or more family members before benefits are paid.

• Generally NO copays

Must have (for 2011)

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HSA Contributions - 2011

• Individual contribution is limited to $3,050 in ’11• Family contribution is limited to $6,150 in ’11• Excess contributions are subject to a 6% excise

tax plus ordinary income tax.• Contribution limits may increase each year

according to federal law.• Contributions can me made by Employer (pre-tax)

Employee (tax deductible), or both.• Age 55 and older can make “catch up”

contributions of an additional $1,000 per year

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Why Contribute to an HSA?The Triple Tax Benefit

1. Contributions are pre-tax or tax deductible2. Interest accumulates tax free3. Distributions for qualified expenses are

tax freeNO OTHER SAVINGS PROGRAM ALLOWS THIS!

Remember to include Douglas County’s contribution to your HSA (i.e., $500 or $1,000 annually) when computing your own maximum allowable contribution amount.

Employee Only Coverage: $3,050 - $500 = $2,550Employee + Dependent(s) Coverage: $6,150 - $1,000 = $5,150

(+ $1,000 Catch Up Contribution if 55 or older)

HSA Distributions• No tax or penalty on distributions used for

qualified expenses (Note: starting in 2011, non-prescription/over the counter drugs NOT qualified)

• Penalty of 20% plus ordinary income tax, if distributions used for non-qualified expenses

• Penalty goes away at age 65 or the death of the account holder (tax may still apply)

• If distributions continue to be used for qualified expenses, YOU NEVER PAY TAXES

• www.myuhc.com• Estimate treatment costs for conditions• Plan cost estimator• Rx comparisons• Personal health record• Health and Wellness information

YOUR decision support tools…

Login / Registration page

Simply go to myuhc.com, log in. Or if it’s your first time visiting the site, click the Register Now button.

UHC’s Plan Cost Estimator

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Milliman’s Plan Cost Estimator (link to follow)

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Milliman’s Plan Cost Estimator (link to follow)

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Quality & Cost Relationship

Hospital Comparison Tool

Estimate Costs of Future Treatments

• Plan for future expenses for various tests and treatments

• Calculate approximate costs in a geographical area• See estimated account balances

• Compare in-network and out-of-network costs

Estimate Costs of Future Treatments

Shopping Around For HealthcareIn Omaha, NE

Category Hospital A Hospital B Hospital C Hospital D Hospital E

ALOS (days) 3 3.8 3.3 3.7 3.8

Average Charge

$30,725 $46,997 $49,113 $49,397 $56,273

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Total Knee Replacement (DRG 302)

Shopping Around For HealthcareIn Omaha, NE

Category Hospital A Hospital B Hospital C Hospital D Hospital E

ALOS (days) 2.8 4.2 4.5 5.0 4.1

Average Charge

$41,475 $73,436 $91,098 $98,113 $102,18834

Lumbar Spine Fusion (DRG 304)

Maximizing your CDH experience…or…KEEPING MORE

MONEY IN YOUR POCKET!

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Generic Prescription Drugs Save

Rx Non-Formulary Formulary

Generic

GERD Nexium, Zegerid:$136 - $172

Aciphex, Protonix:$138-$172

Omeprazole:

$4 - $24

Cholesterol

Crestor,Zocor:

$109 - $166

Lipitor, Vytorin:$97 - $104

Simvastatin:

$4 - $15

Sleep Aids Ambien CR, Lunesta:$138 - $156

N/A Zolpidem:$4 - $15

Reduce your Prescription Drug Costs!

$4 Generic Prescription Drugs

Over 400 Rx available for $4!

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NE Rx Discount Card at work…

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Retail Healthcare (i.e. “grocery store” healthcare)($25 - $79 each)

Treatments1. Bladder Infection2. Bronchitis3. Colds4. Ear Infection5. Ear Wax Removal6. Flu Screening/Treatment7. Minor Skin Irritations8. Mono9. Pink Eye10. Seasonal Allergies11. Sinus Infection12. Sore Throat13. Strep ThroatFree Blood Pressure Checks

Screenings1. Cholesterol/Blood

Sugar2. Daycare Provider

Physicals3. Pregnancy Tests4. Sports Physicals5. TuberculosisAdult Immunizations1. Hepatitis A/B2. Measles/Mumps/Rubella3. Pneumonia4. Tetanus5. Tetanus/Pertussis

www.Alegent.com/QuickCare

• Service performed• Claim submitted to Insurance Carrier

Claim

EOB

EOB

Explanation of benefit

• Insurance Carrier re-prices claim as part of PPO (Preferred Provider Organization) arrangement Service $ 80 PPO Disc $ 15 Applied to $ 65 Deductible

• Insurance Carrier sends EOB and payment to Doctor and patient

Traditional Health plan with a co-payment works as follows:

•Go to healthcare provider

•Present ID card

•Pay co-pay (e.g. $30)

• Service performed• Claim submitted to Insurance Carrier

Claim

EOB

EOB

Explanation of benefit

• Doctor bills patient for amount due after receiving EOB• Pay using HSA or other

• Insurance Carrier re-prices claim as part of PPO arrangement Service $ 80 PPO Disc $ 15 Applied to $ 65 Deductible

• Insurance Carrier sends EOB to Doctor and patient

CDH Plan works as follows:

•Go to healthcare provider

•Present ID card

QUESTIONS ?