Help fill the gaps in your high deductible health planUsing voluntary benefits & HSAs to manage healthcare expenses

ReliaStar Life Insurance Company and ReliaStar Life Insurance Company of New York members of the Voya® family of companies.

You have a high deductible health plan. Now what?High-deductible health plans (HDHPs) have skyrocketed in popularity since their inception over a decade ago. Featuring lower premiums and higher deductibles than traditional health plans, HDHPs require the insured to pay more out of pocket before insurance kicks in. This essentially places more responsibility on the insured to be a thoughtful and proactive manager of their healthcare dollars. As a result, employers and insureds have wisely turned to a number of resources to help to offset those costs, including health savings accounts (HSAs) and supplementary, or voluntary, insurance. Let’s talk about why these are important.

Open a health savings accountTo be clear, to have a HSA, you first need to be participating in a qualified HDHP. Participants are then able to build up money inside their HSAs through pre-tax dollars and may continue to do so throughout their working years. These dollars can be used for specific medical expenses, such as prescriptions, contact lenses and chiropractic care.

HSAs are a great way to save for healthcare costs in retirement during one’s working years. Plus, since HSAs are portable, they are able to move with you if you change employment.

Another feature of HSAs is that those who are starting “late” or want to accelerate the funding of these accounts, HSAs offer a “catch-up” provision for people over 55 who aren’t enrolled in Medicare. This provision allows those individuals to contribute an additional $1,000 over the annual maximum; which for 2018 is set at a maximum contribution of $3,450 for an individual and $6,900 per family.

HSAs are a solid investment tool in that they offer a triple tax benefit through:

tax-deductible contributions,

tax-free growth and

tax-free withdrawals for qualified medical expenses.

Plus, upon the owner’s death, the account passes to his/her beneficiary, meaning a surviving spouse can continue to use those tax-free funds for healthcare costs.

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HSAs are a great way to save for healthcare costs

in retirement during one's working years.

Add voluntary insurance coverageSounds pretty great, right? Now let’s talk supplementary, or voluntary, insurance. To generalize, these types of insurance coverages are typically used to complement a core benefit package offered by an employer. Consider it another way to help defray out of pocket costs, since benefits are paid directly to the insured employee and can be used in the manner they choose. Examples of voluntary insurance products offered by Voya Employee Benefits include:

Accident Insurance This coverage pays you benefits for specific injuries and events resulting from a covered accident on or after the effective date of coverage, with the amounts paid depending on the type of injury and care received. Examples of benefits you could qualify for if they are the result of a covered accident include: urgent care facility treatment, hospital admission, surgery, and physical or occupational therapy.

Critical Illness* Insurance This coverage pays you a lump-sum benefit if you are diagnosed with a covered illness or condition on or after the effective date of coverage. Examples of covered illnesses and diseases include: heart attack, stroke, multiple sclerosis, Alzheimer’s disease, Parkinson’s disease and cancer, among others.*Critical Illness is referred to as Specified Disease in some states.

Hospital Confinement Indemnity Insurance* This coverage pays a daily benefit if you have a covered stay in a hospital*, critical care unit or rehabilitation facility. The benefit amount is determined based on the type of facility and the number of days you stay.*A hospital does not include an institution or part or an institution used as: a hospice unit; a convalescent home; a rest or nursing facility; a free-standing surgical center; a rehabilitative facility; an extended care facility; a skilled nursing facility; or a facility primarily affording custodial, educational care, or care or treatment for persons suffering from mental diseases or disorders, or care for the aged, or drug or alcohol addiction.

It’s important to note that Accident, Critical Illness and Hospital Confinement Indemnity Insurance are limited benefit policies. They are not health insurance and do not satisfy the requirement of minimum essential coverage under the Affordable Care Act.

HSAs are a solid investment tool in that they offer a triple tax benefit.

It is common for voluntary coverages to include a Wellness Benefit, which provides an annual benefit payment for completing a health screening test. Examples of health screening tests include but are not limited to: routine eye exam, routine dental exam, colonoscopy, fasting blood glucose test and mammography.

As you can see, this type of insurance coverage plays an important role in providing added financial protection via lump sum benefit payments when, for example, you are diagnosed with a covered illness or disease, experience a specific injury or event due to a covered accident, or have a covered stay in a hospital on or after your coverage effective date.

What’s unique about this insurance is that the benefit payment can be used by the insured however they wish. This could include medical deductibles, co-pays, rent, childcare or everyday expenses like utilities and groceries. It’s truly up to you how your benefit dollars are spent.

Note: Voya Employee Benefits developed Accident Insurance, Critical Illness Insurance and Hospital Confinement Indemnity Insurance with the intent that they be “permitted insurance,” “permitted coverage” or “preventive care” within the meaning of section 223 of the Internal Revenue Code so that employees who are covered by these products and who are otherwise eligible to contribute to an HSA remain eligible to make HSA contributions. The law in this area, however, is not well developed. Consequently, Voya Employee Benefits cannot make any representations or warranties regarding the HSA compatibility of its Compass products. Employers should consult with their own tax or legal advisor for assistance in developing their employee benefit plans.

The big pictureThey say that change is the only constant. This is certainly true when it comes to our health and health care and the laws and regulations that govern it. When enrolling in insurance benefits, take the time to sit down with your family and carefully evaluate the benefit offerings. Consider the types of activities you like to participate in, the various family members’ life stages, the state of everyone’s health and your budget, then use this information to inform your enrollment decisions.

With increasing responsibility being placed on consumers to spend their health dollars wisely, annual enrollment is a great opportunity to take stock of where you have been and where you may be going. Certainly no one can know what the future will bring, but by being a thoughtful and proactive manager of your healthcare and healthcare dollars, you can better prepare for the expected and the unexpected.

This whitepaper is not legal advice. For additional information about and the most current regulations on HSAs, please visit the IRS’ website at www.irs.gov.

Product availability and specific provisions may vary by state. Insurance is underwritten by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY), members of the Voya® family of companies. Within the State of New York, only ReliaStar Life Insurance Company of New York is admitted, and its products issued. Voya Employee Benefits is a division of both companies.

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For more information, please contact your Human Resources Department or visit www.irs.gov.