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Celebrating 75 Years 1932 -2007. Consumer Directed Health Plans. How can they Impact Retiree Health Benefits. Consumer Directed Plans. Usually use a High Deductible Health Plan Have a component of participant responsibility. - PowerPoint PPT Presentation
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Celebrating 75 Years
1932 -2007
Consumer Directed Health PlansHow can they Impact Retiree Health Benefits
Consumer Directed Plans
• Usually use a High Deductible Health Plan
• Have a component of participant responsibility.
• Empower participants to make independent decisions while providing an economic incentive.
• Successful plans will provide tools to help participants in their decision process.
What are Consumer Directed Health Plans?
• HRA’s - Health Reimbursement Arrangements
• HSA’s - Health Savings Accounts
• MSA’s (MMSA’s)- (Medicare) Medical Savings Accounts
HRA - Health Reimbursement Account
Employer Benefits
• Do not require a qualified plan• More flexibility in plan design• Employer owns benefit• Only portable to the extent
employer allows • Limited long term liability• Stabilization of rising costs
Employee Benefits• Direct access to providers of choice -
no referrals• No out of pocket expenditure for
expenses under HRA balance• Control over healthcare decisions• Increasing benefits - rewarded for good
health• Stabilization of rising costs
HRA - Health Reimbursement Account
• Qualifeid High Deductible Plan (Required)
• Tax Free Savings Plan to Pay for Healthcare Expenses
• Available to any size Group• Employee Owns Account
HSA Plans
• High Deductible• No first Dollar Benefits except for
Preventative Care• Filed as a HSA Compatible Plan
HSA - Qualified Medical Plan
• Must use a Qualified Financial Vendor
• Can Fund up to $2850 (single) or $5650 (family) for 2007
• Catch-up Provision – Over age 55, $800 for 2007, $900 for 2008
• Employee and/or Employer can make contributions
• Employee owns the Account• Funds are fully portable
HSA - Health Savings Account
• Medical expenses under IRS Code 213(d) *– Medical– Dental– Vision
• COBRA Premiums *• Medicare Premiums *• Long Term Care Premiums *• Retirement Savings - Subject to State and
Federal Taxes
* Subject to State Taxes
HSA -Use of Funds
HSA - Health Savings Account
Employer Benefits• Predictable Costs• Employer and Employee Can Fund• Usually better pricing than HRA
Plans • No long term liability• Stabilization of rising costs
Employee Benefits• Direct access to providers of choice - no
referrals• No out of pocket expenditure for expenses
under HSA balance• Control over healthcare decisions• Increasing benefits - rewarded for good
health• Stabilization of rising costs• Employee owns the account
HSA - Health Savings Account
Example of Retiree Pricing
Fresno County – Unblended Retiree Benefits
• Blue Shield $250 Ded PPO Plan including Rx, Dental, & Vision = $823.47 per month Retiree Only
• Blue Shield $1500 Ded HSA Plan $4500 OoP Max including Rx, Dental, & Vision = $468.12 per month Retiree Only
• Savings = $355.35 Mth, $4264 Ann
• Pays almost entire liability, Plus Tax benefits for HSA account.
Why HSA’s for County Retiree’s
• More Affordable for Retirees• Reduces GASB liability where rates
are still blended• Easy way to introduce to Employee
Population• If offered to Employees provides a
way to save for Retirement Health Benefits
MSA Medical Savings Account
• Original Term for HSA’s• Now an option for Medicare MA
Plans(MA = Medicare Advantage)
• Still evolving, look to the future• High Deductible Plan combined with
a Benefit/Savings account• Only Medicare can fund the account