Healthy Employees . . . Healthy Business1

High Deductible Health Plans

&

BlueAccount Health Savings Accounts

2012

Healthy Employees . . . Healthy Business2

What is an HSA?

• A Health Savings Account, or HSA, is a tax-advantaged savings account that's available to partners whose only health care coverage is provided through a qualified high-deductible health plan.

• Since the deductible — or amount you must pay out of pocket before these plans begin to cover benefits — is high, establishing an HSA to self-fund your out-of-pocket care expenses may help you save money.

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Who Is Eligible?

• Individuals covered under the a Qualified High Deductible Health Plan.

• Can NOT be covered by any other health plan that is not a high-deductible plan.

• Can NOT be eligible & enrolled in Medicare.

• Can NOT be claimed as a dependent on another person’s tax return.

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Advantages of an HSA

Tax Advantages

• Federal tax advantages apply– Contributions to BlueAccount Health Savings

Account are tax deductible.

– Interest earned in BlueAccount Health Savings Account is not taxable.

– Investment gains from BlueAccount Health Savings Account are not taxable.

– HSAs have been exempt from federal income tax since they were created in 2003.

• Withdrawals from BlueAccount Health Savings Account for eligible expenses are not taxable.

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Advantages of an HSA

Personal Advantages

• Owned by the Employee

• Managed by the Employee

• Follows the Employee, wherever they go

• Accumulated balances can also be used for:

• Continuation of coverage Premiums

• Long-term care insurance

• Certain coverage for Medicare eligible employees

• Requirement that money be used only for qualified expenses or income tax and a 20% penalty applies. Penalty is waived at age 65.

This account belongs to you, just like

your checking or savings account.

The employer does not have access!

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Qualified High Deductible Health Plans

• In-network preventive office visits; not subject to the deductible.

• Deductible applies to ALL non-preventive medical services AND prescriptions.

• Deductibles are non-embedded. The family deductible must be met by one or more family members for benefits to begin.

• The Blue Cross network-negotiated discounted rate for all in-network medical services and prescription drugs is the members responsibility until the deductible is satisfied.

• Reimbursement may be made from your BlueAccount Health Savings Account.

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The High Deductible Health Plan of the EPC

• Deductible - $3,500 Employee Only, 7,000 Family; Non-embedded• Plan Coinsurance (Pays after satisfaction of deductible)

– 90% Network, 80% Out-of-Network• Out-of-Pocket Maximums (Includes Coinsurance)

– Network – $1,400 Employee Only, $2,800 Family– Out-of-Network - $2,800 Employee Only, $5,600 Family

• Prescription Drug (through BCBS with MEDCO)– 90% after deductible - Retail Medications– 90% after deductible - Mail Order Medications

• Preventive Care Services –100%, $0 Co-pay (see Plan document for details)

• Deductible applies to ALL non-preventive medical services AND prescriptions

• Dental & Vision plan deductibles are separate and above deductibles do not apply. (Out of Pocket expenses may be reimbursed from your HSA)

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BlueAccount HSA

How does it work?

www.highmarkbcbs.com

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The Member Portal Provides Consumerism Tools that ……

Promote understanding of health care options

Provide eResources including cost and quality tools

Encourage use of health education resources

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Access highmarkbcbs.com

• Click “Members” tab• Enter User ID &

Password in the Log In box, or

• For new registrants click “Register Now”

• New Registrants will receive a PIN in the mail to allow complete access

• Getting started is easy!

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Health Savings AccountEstablishment & Customization

• Opening your Health Savings Account– Online through the Member Portal

• Personalize your Health Savings Account– Opening the account takes 20 minutes, confirmation is immediate

• Specify Method of Contribution– Payroll Contribution– Personal Check– ACH Debit

• Specify Method of Claims Submission– Auto-Submission– Claim-by-Claim Authorization– Debit Card

• Specify Method of Reimbursement– Direct Payment to Provider– Direct Deposit– Check to Member

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Contributions & Distributions• Regulations determined & enforced by the Internal Revenue

Service• Contributions

– For 2012 contributions from all sources are limited to • $3,100 Single Coverage• $6,250 Family Coverage

• Catch-up contributions of $1,000 allowed for members over age 55

• Distributions– Intended use is for “qualified medical expenses” as defined by

section 213(d) of the Internal Revenue Code– Only prescribed medicines or drugs (including over-the-counter

medicines and drugs that are prescribed) and insulin (even if purchased without a prescription) will be considered a qualifying medical expense and subject to preferred tax treatment

– If money from the HSA is used for qualified medical expenses, then the money is spent tax-free

– Unqualified distributions are subject to income tax and 20% penalty

Healthy Employees . . . Healthy Business13

BNY Mellon HSA• BNY Mellon is the BCBS preferred custodian.

• Employees may open an HSA with the financial institution of their choice, but will lose the integrated features provided within the Highmark member portal.

• Employees may authorize supplemental payroll deductions to their account up to the annual contribution limits.

• Employees can invest in an FDIC insured account and nine mutual fund options.

• Employees manage their Claims & BNY Mellon account online at www.highmarkbcbs.com.

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BNY Mellon Account Management• The fee structure is $3.50/month with no calendar

year or annual fee. Fees are taken from the HSA at month-end.

• Debit cards are available at the discretion of the account owner and at no additional charge.

• An FDIC interest bearing commercial BNY Mellon account is the transaction account.

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BlueAccount HSA

Consumerism Tools & Resources

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Transparency of Information

a Key Focus

• The “Right” information must be available for the consumer

• The information must be and Useful & Understandable

• Critical to success is EducationAvailable information must include:

– Treatment options - Healthwise Knowledgebase

– Provider performance and outcomes - Hospital and Physician Quality Measures

– Useful Cost Information - Cost By Condition

– Wellness initiatives- Health Risk Assessment

Healthy Employees . . . Healthy Business17

Should You Choose the Consumer Directed Health Plan

• Determine the difference in your premium contribution for each medical plan option

• Compute potential tax savings from your HSA contributions• Calculate potential earnings from accumulated funds in your

HSA• Review your out-of-pocket expenses and compare to the

premium cost of each plan• Use the tools on the BCBS website to estimate your costs

– Plan Cost Advisor

– My Expense Summary

– Cost By Condition

– Rx Pricing