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HDHP/HSA Step-by-Step

Overview

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  • Step 1: You elect HDHP and cover portion of cost
  • Step 2: HSA set up in your name with bank
  • Step 3: You contribute to HSA
  • Step 4: UC contributes to HSA
  • Step 5: You pay for eligible health expenses with HSA

 

  • Step 6: You cover 100% of annual deductible
  • Step 7: You pay co-insurance after deductible
  • Step 8: You are protected against catastrophic expenses
  • Step 9: Preventive care is covered 100%
  • Step 10: HSA dollars roll over to next year
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Use this step-by-step outline to see how the UC HDHP/HSA plan works

Step 1: You Elect to Participate in the HDHP and Pay a Portion of the Cost for Coverage

You pay a portion of your coverage through pre-tax payroll contributions, with UC paying the majority of the cost. Your cost for coverage is significantly less than for the UC Point of Service (POS) Plan.

Step 2: A Health Savings Account Is Set Up In Your Name with UMB Bank

A bank account – called a Health Savings Account, or HSA – is set up in your name by UC/Human Resources.

Step 3: You Contribute to Your Account

You can elect to set aside dollars on a pre-tax basis through payroll deductions. You can make contributions to your account as long as the total contributions to your account in 2014 (both UC contributions and your contributions) do not exceed $3,300 for single coverage and $6,550 for family coverage.

Federal rules also allow what are called “catch-up” contributions to a health savings account — which means you can contribute additional pre-tax dollars if you are age 55 or older, or if you will turn 55 any time during 2014. In 2014, you can contribute an additional $1,000 to your account if you are eligible for the “catch-up” contribution.

You may change your HSA payroll deductions at any time during 2014. A change in family status event is not required.

You are responsible for assuring that total contributions to your account -- from all sources combined -- do not exceed the allowed limits.  

Step 4: UC Contributes to Your HSA

For 2014, UC will contribute the following amounts to your account:  

  ANNUAL BASE PAY AS OF JANUARY 1, 2014
Coverage Level
Less than $40,000
$40,000-$79,999
$80,000-$99,000
$100,000 +
UC annual HSA funding is...
UC annual HSA funding is...
UC annual HSA funding is...
UC annual HSA funding is...
Employee Only
$800
$550
$450
$350
Employee + One Dependent
$1600
$1100
$900
$700
Family
$1600 $1100 $900 $700

These annual contributions will be deposited in January (50%) and the balance on a monthly basis beginning in July 2014. New employees receive a prorated amount. UC’s contribution to the HSA will be re-evaluated each year.

Interest and Investment Opportunities

The funds in your health savings account are invested in an interest bearing savings account with UMB Bank. When your account balance reaches $1,000, you have additional investment options, such as a money market fund. Any earnings on those investments are tax-free if you use them to pay for eligible health care expenses.

Step 5: You Use Your HSA Dollars to Pay for Eligible Health Care Expenses

Money you withdraw from your HSA is completely tax-free as long as the money is used to pay for eligible health care expenses as defined by the IRS (known as Section 213 expenses). You can get a list of eligible expenses from the IRS at www.irs.gov. These expenses include:

  • Your medical plan annual deductible and coinsurance,
  • Dental and vision expenses,
  • Prescription drug expenses, and
  • Over-the-counter drugs, with a doctor's prescription.

Step 6: You Pay 100 Percent of the Cost Up to the Annual Deductible

When you need care, you pay 100 percent for all eligible medical and prescription drug expenses up to the plan's annual deductible.

In-Network Annual Deductible:

  • $1,500 Employee Only
  • $3,000 Family (all coverage levels other than ‘employee only’)

Out-of-Network Annual Deductible:

  • $3,000 Employee Only
  • $6,000 Family (all coverage levels other than ‘employee only’)

If you choose, you can use money from your health savings account to pay for expenses that went toward your deductible. You determine how and when to use your health savings account dollars.  Our Sample Employee Claim Scenarios will help you understand how this works.

Step 7: You Pay Co-insurance After Meeting the Annual Deductible

Once you have met your annual deductible, you pay 10 percent of your medical charges when using Humana network providers, or 30 percent of the cost when using providers outside of Humana’s network. Prescription drugs are covered through Humana once the deductible has been met. 

Step 8: You Are Protected Against Catastrophic Expenses

To protect you from catastrophic out-of-pocket expenses, the plan pays 100 percent of your medical and prescription drug costs once you meet the annual out-of-pocket maximum.

In-Network Annual Out-of-Pocket Maximum:

  • $3,000 Employee Only
  • $6,000 Family (all coverage levels other than Employee Only)

Out-of-Network Annual Out-of-Pocket Maximum:

  • $6,000 Employee Only
  • $12,000 Family (all coverage levels other than Employee Only)

The out-of-pocket maximum is the most you will pay for medical and prescription drugs during any year.

Step 9: Preventive Care is Covered 100 Percent

Keep in mind that preventive medical care, according to Humana’s preventive care guidelines, is always covered at 100 percent when using network providers. Preventive care includes services such as annual physicals, cancer screenings, and adult and child immunizations.

Step 10: HSA Funds Remaining At End of Year Roll Over

Any HSA funds remaining at the end of the year will stay in your account for future use. There is no limit to the amount you can roll over from year to year, and you can even take your account dollars with you if you leave UC.