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Significant Insurance Benefit Changes for 2015

Presented by:

Beth Ritchie

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Agenda

• High Deductible Health Plans• Health Savings Accounts• Changes for 2015 to Health, Dental and

Vision Plans• Scheduling Future Benefits Fairs

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High Deductible Health Plans (HDHP) &

Health Savings Accounts (HSA)

Information is based on what we know today; subject to final approval by the Group Insurance

Board on August 26, 2014

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HDHP/HSAEffective January 1, 2015, most UW System and state employees will be eligible to enroll in a high deductible health plan (HDHP) and a health savings account (HSA)• All current health plans will offer an

HDHP option- For example – Dean or Dean

HDHP

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HDHP/HSA

Are you now or have you ever been enrolled in an

HDHP and HSA?

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What is an HDHP?• Under a high deductible health plan, employee

must pay out-of-pocket for all medical, RX and dental costs up to the annual deductible before any benefits are payable by the health plan.− Note: Specific federally mandated preventive services

are not subject to the deductible or coinsurance and are covered in full by health plan

• Once the deductible has been met, an HDHP acts like our current health plans− Member pays 10% of covered services until annual

out-of-pocket maximum is met− Current health plans will be referred to as non-HDHP’s

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What is an HSA?• A Health Savings Account (HSA) is a tax free

savings account used to pay for eligible medical expenses (similar to Flex Spending)

• Employee and employer may contribute to account (employer portion not yet determined)

• Employee may change HSA contributions at any time

• HSA contributions roll over every year and accumulates over time

• At termination of employment, the employee keeps the HSA

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Who is eligible for the HDHP? • The HDHP will be available to all active and

retired employees and their dependents except if the employee:− Is enrolled in any other non-HDHP health plan,

such as a spouse's health insurance plan − Is dependent of another person for tax purposes− Is covered under the graduate assistant/short-term

academic staff benefits program• No Big Ten institutions offer HDHP’s to this

group of employees− Is eligible for Medicare (including annuitants 65 and

older) or Tricare

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Who is eligible for an HSA?• To be eligible to participate in the HSA, the

individual must meet all of the following:− MUST be enrolled in a State Group Health HDHP − Cannot be covered by a non-HDHP health plan, such

as a spouse's health insurance plan − Cannot be enrolled in any Medicare benefits or Tricare− Cannot be a dependent of another person for tax

purposes − Must be a WRS participant

• Employee covered under the graduate assistant/short-term academic staff benefits program are not eligible

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HDHP/HSAWho is most likely to be interested in enrolling for the HDHP/HSA?

Savers – Highly compensated and tech savvy-employees who do not expect to incur medical costs and/or can afford to pay the deductible out-of-pocket and use the HSA for long-term savings

− Additional retirement savings vehicle− Maintaining a tax shelter− Building a health care nest egg

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HDHP/HSASpenders– Low-wage earners who will likely need to use HSA and employer contribution every year

− Greatest concern is that this population understands how the plan works

− 76% of Americans live paycheck to paycheck− 26% of a low-earning family’s income may be

needed to cover the average HDHP out-of-pocket limit

− 55% of low-income workers experience difficulty paying medical bills or have medical debt.

− HDHP/HSA provides way to budget. Direct

health premium savings to HSA

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HDHP/HSA

Risk-takers – Those willing to risk the lower premium costs in exchange for higher out-of-pocket costs if medical services are received.

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HDHP by the Numbers

• The premium for the HDHP will be lower than the current premiums (premium not yet determined)

• After the deductible has been met, the HDHP’s will typically provide same benefits as the current non-HDHP’s

• Preventive services, including designated medical services and prescription drugs and preventive dental for children, are not subject to the deductible

Plan Annual Deductible

Annual Out-of-Pocket Max

Single $1,500 $2,500

Family $3,000 $5,000

HDHP by the Numbers• You must pay the full cost of non-preventive

medical, dental and prescriptions goods and services until the deductible is met including:– Prescription drugs not on the preventive list (as

determined by Navitus)– Dental exams/cleaning (only pediatric preventive

dental services are not subject to the deductible)

CoverageMember’s Cost

HDHP Non-HDHP

Prescription – Celebrex 200 mg (30 day) $450 – full cost $15 co-pay

Dental Cleaning $50-$300 – full cost $0

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HDHP by the Numbers

Plan TypeDeductible(Pay First)

Coinsurance+(Then Pay This)

Member’s Total Cost

HDHP Single Plan $1,50010% of $8,500 =

$850 $2,350

HDHP Family Plan $3,00010% of $7,000 =

$700 $3,700

Non-HDHP Single $010% of $10,000 =

$1000 $500*

Non-HDHP Family $010% of $10,000 =

$1000 $500*

First Claim of the Year – $10,000 surgery

+For illustration only. *Annual out-of-pocket maximum for the non-HDHP plan is $500 for an individual/$1,000 family.

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HDHP and ERA• Employees who participate in an HDHP are not

eligible for the Employee Reimbursement Account (ERA) Health Care Flexible Spending Account (FSA). It has no impact on the Dependent Daycare FSA.− A Limited Expense Health Care FSA will be offered

to employees electing the HDHP. If a limited plan is elected, it can be used only for dental or vision expenses not paid by any other insurance plan.

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ERA & HSA Vendor• The ETF Board intends to contract with eflex,

a division of TASC, to be the third party administrator as of January 1, 2015 for the:• Health Savings Account• Health Care Expense FSA• Limited Flexible Spending Accounts • Dependent Care FSA• Commuter Benefits

• Contact info will be provided as it is available

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HDHP & HSA UnknownsThere are still several outstanding questions and unknowns including:• Educational tools that will be developed by

ETF and HSA vendor• If/how the HSA will receive roll-ins from

other HSAs• Cost and funding of any HSA-related fees• Employer contribution

• Amount• Timing of contribution• Funding

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HDHP & HSA Unknowns• How HSA elections and changes will be

made (with vendor vs with employer)

• Rules surrounding those who have leftover money in ERA program for 2014 but want to enroll in HDHP/HSA for 2015

• W-2 reporting requirements for HSA

• How HDHP and HSAs flow through HRS – analysis is currently underway

Main Takeaways

• Every health plan will also offer a high deductible health plan option BUT there will be only one HSA plan and one HSA vendor.

• Can only enroll in HSA if enrolled in HDHP under State Group Health Plan

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HDHP/HSA Communications• The UW System Administration Office of Human

Resources & Workforce Diversity (OHRWD) is already communicating changes to UW System HR, payroll and benefits staff

• The ETF Board has selected an HSA vendor and ETF is in contract negotiations with them.

• Large employee-focused educational effort to begin in mid to late summer. Prior to ABE, we plan to provide:− Tools to assist employees in making health plan

choices− Post card mailing to employee’s homes

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Annual Benefit Enrollment Period

October 6 – 31, 2014

It’s Your Choice Kick-Off: September 25, 2014

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Changes for 2015• There are no changes to the benefits or coverage

under State Group Health for 2015, except for those that apply specifically to the HDHP

• VSP will offer an open enrollment• EPIC Benefits+ will offer a special enrollment – likely

with a graduated benefit• Possible benefit enhancements to EPIC Benefits+

coverage for AD&D • Dental Wisconsin: Unknown

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Benefits Fairs Schedule• Oct 7: UW-Eau Claire, UW-Madison, UW-

Platteville• Oct 8: UW-Green Bay, UW-Milwaukee, UW-

River Falls, UW-Superior• Oct 9: UW-Stout, UW-Whitewater• Oct 15: UW-LaCrosse, UW-Stevens Point• Oct 16: UW-OshKosh• Oct 22: UW-Parkside

Some vendors may not be able to attend your benefits fair because of multiple fairs on the same date

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Benefits Fairs• When do you decide on the date for your

institution’s benefits fair?• How do you select a date for your fair?• Do you find that employees want a benefits

fair early in the enrollment period?• Would an online calendar be helpful so you

can see when other UW institutions have scheduled their benefits fair?

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Thank you!

Questions?