your cigna choice fund health savings account€¦ · what is a health savings account (hsa) plan?...

YOUR CIGNA CHOICE FUND®

HEALTH SAVINGSACCOUNT

A health plan plus a health savings account.

2Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna

Basic Principles

• What if we bought groceries the

way we buy health care?

– Pay $10 at the door

– No price tags on shelves

– How does our behavior

change?

– How does the store’s behavior

change?


• Healthcare Consumerism is about transforming a health benefit plan into one that puts economic purchasing power – and decision-making – in the hands of participants.

• It’s about providing the information and decision support tools they need, along with financial incentives, rewards and other benefits and tools which encourage personal involvement in altering health and health care purchasing behaviors.

• Must work for the sick as well as for the healthy and for those who are technically savvy and those who are not.

What is Consumer-Driven Health Care?


WHAT IS A HEALTH SAVINGS ACCOUNT (HSA) PLAN?

• A health plan that provides coverage for qualified medical/pharmacy expenses and

allows you the option to save HSA dollars on a tax advantaged basis.

• Your employer contributes and you can too through payroll deduction!

• The total 2016 annual contribution limit for employee + employer is:

- $3,350 Single Coverage

- $6,750 Family Coverage

• Employee and employer money deposited into the HSA is generally not taxable

• Age 55 or older - Maximum contribution increases by $1,000 (considered a “catch-up”

contribution)

+ =Qualified

Medical Plan

Tax-advantaged

HSA PlanHealth Savings

Account

Plan Design Samples


Deductible Averages

Most Common

Deductible

Most Common

OOP Max

HSAIndividual $1,500 $6,550

Family $3,000 $13,110

Coinsurance

Average In-Network

Coinsurance

Average Out-of-

Network

Coinsurance

HSA 70% 50%


AM I ELIGIBLE TO PARTICIPATE IN AN HSA PLAN?

Because HSA plans have special tax advantages, the IRS defines specific rules

for participation. To be eligible, you:

– Must be enrolled in an IRS-qualified high-deductible medical plan (high-deductible

medical plans sold with Cigna’s Choice Fund HSA meet IRS requirements)

– Cannot have any other health coverage

– Not covered by spouse’s medical or pharmacy plan

– Not covered through Medicare Part A or Part B, Part D, or through TRICARE

– Not covered through a general-purpose Flexible Spending Account (FSA) plan

(either employer’s or spouse’s)

– Cannot be claimed as a dependent on another person’s tax return

7

BENEFITS OF AN HSA

8

TRIPLE TAX ADVANTAGES OF AN HSA

• Payroll deduction contributions are pre-tax*

• After-tax contributions can be deducted when you file your tax return

• Interest earned on your cash account is generally not taxable*

• Investment earnings on mutual funds are generally not taxable*

• Withdrawals to pay qualified health care expenses are tax-free

• Withdrawals for ineligible expenses are taxed and you pay a 20% penalty

• At age 65, withdraw funds for any reason with no penalty (taxes do apply)

Contributions

HSA Account

Growth

Withdrawals

Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

* HSA contributions and earnings are not subject to federal taxes and not subject to state taxes in most states. A few stats do not allow pretax treatment of

contributions or earnings: Alabama, California, New Hampshire and New Jersey.

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SAVING FOR THE FUTURE

100% Rollover of

HSA dollars year

over year

Portable – take it

with you

Use HSA dollars

to pay premiums

for:

COBRA

Long-Term Care

Medicare

You choose how and when to use your HSA

Use as Income

During Retirement


Investment options


• $2,000 minimum in HSA to invest.

• Once the investment account is open, no

minimum balance applies

• No minimum deposit for any fund

• Tax-free growth of interest or

investment earnings

• No monthly fees apply

• Track your balance online or with

convenient monthly statements

11

HOW ARE MEDICAL CLAIMS PAID?

11Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna 11

Cigna provides an Explanation of Benefits or EOB

(“receipt”) showing:

Doctor’s charge, Cigna discount, amount billed, (amount

deducted from the HSA if elected), amount paid to

doctor/facility and remaining HSA balance (if medical

automatically claim forwarding elected).

Sick visit to an in-network doctor/hospital. Show

your Cigna Choice Fund ID card.

Health Care Professional files claim with Cigna directly.

Cigna receives the claim and processes it based on

the plan deductible, covered expenses and Cigna-

negotiated discounts.

ID Card

EOB

12

This is an example used for illustrative purposes only.

• Single, in her 50s

• Diabetes; controlling health

through medication

• Looking to save money for future

health expenses

meet Karen

HSA

EMPLOYER

$500

KAREN

$0.00

500.00

+

PLAN

70%

KAREN

30%

+PLAN

100%

IN-NETWORK PREVENTIVE CARE IS COVERED BY THE PLAN AT 100%

1,948.00

70% plan: 1364.00

30% Karen: 584.00

Deductible: –1500.00

TOTAL EXPENSES

Preventive care $ 398.00

2 ER visits 2600.00

4 PCP visits 320.00

12 Generic Rx 288.00

3 Brand Rx 240.00

TOTAL 3,846.00

100% covered –398.00

Karen’s

Deductible

–1500.00

70% plan –1364.00

30% Karen –584.00

BALANCE DUE 0.00

-1,584.00HSA BALANCE

30% Karen: –584.00


13


• Married in her 30s

• Pregnant; having a baby

• Looking to save money for future

health expenses meet Mary

HSA

EMPLOYER

$1000

MARY

$4,000

$5,000.00

+

PLAN

70%

KAREN

30%

+PLAN

100%


4,313.00

70% plan: 3062.00

30% Mary: 1313.00


TOTAL EXPENSES

Check ups 767.00

Global Delivery 4600.00

Physician bill for

delivery

1320.00

Anesthesiologist 688.00

TOTAL 7,375.00

Mary Deductible –3000.00

70% plan –3062.00

30% Mary –1313.00

BALANCE DUE 0.00

687.00HSA BALANCE

30% Mary: –1313.00


14


• Married in his 40s with a family

• Has the flu; needs to have a visit to the PCP

meet Joe

HSA

EMPLOYER

$1000

JOE

$1,000

2,000.00

+

PLAN

70%

JOE

30%

+PLAN

100%


0.00

70% plan: 0.00

30% Joe: 0.00


TOTAL EXPENSES

Preventive care 252.00

PCP visit 120.00

TOTAL 372.00

Preventive

100%

–252.00

Joe’s Deductible –120.00

100% taken

from Joe’s ded

120.00

BALANCE DUE 0.00

1880.00HSA BALANCE

Joe owe : –120.00


15


• A dependent child, age 13

• Football injury; that turns in to a broken arm that needs

PT therapymeet Justin

HSA

EMPLOYER

$1000

JUSTIN

$0.00

1,000.00

+

PLAN

70%

JUSTIN

30%

+PLAN

100%


700.00

70% plan: 1448.00

30% Justin: 620.00


TOTAL EXPENSES

Preventive care $ 298.00

ER visit 2800.00

4 PCP visits 620.00

7 Specialist

visits

1368.00

3 Brand Rx 280.00

TOTAL 5,366.00

100% covered –298.00

Justin’s

Deductible

–3000.00

70% plan –1448.00

30% Justin –620.00

BALANCE DUE 2,068.00

-2620.00HSA BALANCE

30% Justin: –620.00


16

MANAGING AN HSA

What are qualified health care expenses?


Examples of nonqualified

health care expenses

Examples of qualified

health care expenses*

Qualified health care expenses are determined by the IRS

* This is not a complete list. For a detailed list, visit Cigna.com/expenses or the IRS website at

www.irs.gov and see Publications 502 and 969 for additional information.

• Air purifiers

• Cosmetic surgery and related expenses

• Health club dues (unless prescribed by

physician to treat illness)

• Illegal operations and treatments

• Massages for general well-being

• Premiums for health care coverage

• Transportation (unless specifically for and

essential to medical care)

• Toothpaste, cosmetics and toiletries

• Vitamins and nutritional supplements

• Weight loss programs (unless for a

specific illness)

• Deductibles and out-of-pocket costs for

medical and dental care

• Prescriptions

• Vision care, including glasses and LASIK

eye surgery

• Smoking cessation treatment

and prescriptions

• Family planning procedures

• Chiropractic services

• Some insurance premiums, such as

long-term care, COBRA and health care

coverage premiums while receiving

unemployment compensation

http://www.irs.gov/

18Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna 18

Integrated pre- and

post-enrollment

communications

One website –

myCigna.com

Combined

financial statements

One service center

Personal Health

Advocate for

decision support


myCigna

app &

mobile

access

New!

24/7/365 live service

150 languages

Social Media

Q1

Q2Q3

Q4One-of-a-kind Personal

Cost & Quality Estimator

Customer Experience – Simple and Easy

Managing your HSA on the go

1919

Manage your

account anytime,

anywhere

Contribution alerts

Contribution posted to your account ☐ Email ☐ Text Message

HSA available cash balance is below $ ☐ Email ☐ Text Message

HSA contributions year-to-date are within $ of the IRS maximum ☐ Email ☐ Text Message


Choose emails

or text messages –

it’s your choice

Get mobile

or email alerts

from HSA Bank

Sign up for alerts

on the HSA Bank

online banking portal

you access through

myCigna.com

24

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@txt

20

HSA ACCESS TO FUNDS

Customers choose when and how they access their money

Regardless of how the HSA is accessed, all balance and transaction activity is available online at

myCigna.com

• Cigna will automatically pay eligible medical expenses from your HSA

• This option can be selected at enrollment or any time during the year

• Pay expenses directly from the HSA

• Monitor, manage and schedule payments online, anytime

• Payments can be scheduled on a one-time or recurring basis

• Purchase and write checks to pay for out-of-pocket expenses

• Use the MasterCard-branded debit card to pay for out-of-pocket expenses

• The card can also be used to get cash at ATMs to reimburse yourself for

qualified expenses paid with personal fundsDebit Card

Online Bill Pay &

Electronic Fund

Transfer

Checkbook

Automatic Claim

Forwarding (ACF)


21

TAX RESPONSIBILITIES AND REPORTING

Employee

ClientBank

Bank reporting for year-end taxes will be sent to the employee (accountholder)

Form 1099-SA – Reporting all distributions from the HSA

Form 5498-SA – Reporting of contributions and transfers into the HSA

Employee (accountholder) responsibility

Ensure total contributions do not exceed allowable maximums

Keep accurate records of contributions and withdrawals

Maintain receipts for all use of HSA dollars: purchases and bill payments

File form 8889 as part of income tax submission to the IRS

Client reporting for year-end taxes will be sent to the employee (accountholder)

Form W-2: Reporting all employer contributions, including pretax payroll deductions. Employer contributions are not considered part of your income


If you need more information


• myCigna.com

• Available 24/7/365

• Single sign on to your

HSA information

• Personalized site to learn

about your benefits, track

claims and much more

• 1.800.244.6224

Customer Service

24/7/365

• Medical and Drug Cost

Comparison Tool !!!!!!!

Educational tools and resources


Choice Fund HSA Video

• How to use your HSA

HSA Savings Calculator

• Tax Savings

• Future Growth

HSA BASICS

24

WHAT HAPPENS WHEN AN EMPLOYEE LEAVES THE PLAN?

24

Employer

• Send updated eligibility information

to Cigna.

• Termination is received by the HSA

system via the eligibility file.

• After 15 days, the termination is

released to the bank and they begin

process to convert HSA to an

individual account.

Employee

• HSA dollars are portable and theirs to keep.

• No longer able to contribute to the HSA

(unless covered through an HSA-qualified

plan and remain eligible).

• Can continue using the HSA funds for qualified health care

expenses for their qualified dependents.

• Bank begins 30-day process to transition account to a free-

agent account. Employee may have different/additional

account fees.

• Receives letter from bank outlining changes to the account

and the options available:

• Transfer the account to a free-agent account with

HSA Bank

• Transfer the funds to an HSA at another institution

• Close the account

• If free-agent account is opened, employee will have a direct

relationship with the bank. (The bank cannot provide Cigna

will any information about the account.)

Change in employee status or plan change



QUESTIONS?

your cigna choice fund health savings account€¦ · what is a health savings account (hsa) plan?...

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