2014

City of Vancouver – 2014 plans

The City continues to offer two additional options for employees to choose from

Both Regence and Kaiser offer a Consumer Directed Health Plan (CDHP) along side their traditional PPO and HMO plans

The CDHP offerings allow employees to set up a Health Savings Account (HSA) to save money for future health care expenses

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City of Vancouver – CDHP/HSA Eligibility

You or your dependents may not be enrolled in another health care plan that pays for services before the deductible is met if you are enrolling in the City’s CDHP

Since an HSA and an FSA are both tax-sheltered accounts, you may not participate in both accounts

You may continue to participate in a dependent care spending account if you enroll in the CDHP/HSA

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What is Consumerism and Consumer-Directed Health Plans (CDHP)?

Consumerism - any activity that encourages or empowers informed or responsible spending for or use of healthcare related goods or services

CDHP - a plan, typically a PPO with a high deductible and an “account” (e.g. Health Savings Account (HSA))

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What is Consumerism and Consumer-Directed Health Plans (CDHP) (cont.)?Consumerism is a wide-ranging topic, not

limited to just Consumer Directed Health Plans (CDHPs) and shares these goals:

Create better consumers of health careReduce the number of services utilized,

particularly unnecessary services, or those for which less expensive, and equally as effective, alternatives exist

Deliver health care in a more cost-effective and efficient manner

Act as a long-term strategy to reduce costs or future “trend” increases

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What is health care consumerism?Exhibiting healthy behaviors

Taking personal responsibility for the cost and quality of the services that an individual purchases

Using strategies for encouraging consumerism, which include communicating effectively with your health care professionals, understanding your coverage, and getting informed about options

Putting your health at the forefront, because consumerism isn’t just managing your health plan, it’s about managing your life

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What is a consumer-directed health plan?

It is a plan under which employees spend money from Health Savings Accounts (HSAs) to pay for health care services. Once the high deductible is met, services are covered by traditional insurance.

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Consumer Directed Health Plan (CDHP) with Health Savings Account (HSA)

Health Savings Account (HSA)

Employer funds $500 per employee-only and $1,000 per employee/dependents

Employee may also fund account

Traditional Insurance Coverage

80% PPO60% Non PPO

$5,000 out-of-pocket maximum per person ($10,000 per family); includes the deductible

Then plan pays 100%

Pre

ven

tive

Ca

re

100

%

CDHP Deductible$1,500 deductible per person ($3,000 per family) (may be offset by HSA)

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Health Savings Account (HSA) DetailsCity Annual Contribution $500 per enrolled employee only$1,000 per enrollment employee and dependentsCity’s contribution will be deposited at the

beginning of the plan year

Annual Tax-Free Contribution LimitsEmployee-only coverage: $3,300One or more dependent coverage: $6,550 $1,000 annual HSA catch-up contribution at age

55 and olderMaximums are combined totals that include

employer and employee contributions9

continued …CDHP 2014

Health Savings Account (HSA) Details

Establishing/Using an AccountThe HSA will be an employee-owned accountAccount is through Bank of AmericaHSA account holders will have a debit card and/or

checkbook to pay for qualified medical expensesNo reporting on the account is provided to the CityAfter the account balance reaches $1,000,

employees can choose whether or how to invest the balance

The City pays the administrative fee for active employees

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Health Savings Account OverviewFlexible Portable and, like an IRA, travels with you, not

your jobRolls over each year, unlike a Flexible Spending

AccountNot a “use it or lose it” account – save for next

year, or better yet, for retirementCity will make a contribution to the HSA in 2014You also may contribute to the HSA on a pre-tax

basis You’re in control and choose when to use your HSA

or pay out-of-pocket11

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Health Savings Account Overview

Flexible

InheritableYou can make an after-tax contribution to the

HSA and deduct it on your federal tax returnThe CDHP premium is lower than the regular

plans, those that are currently making a higher pre-tax premium contribution can elect to contribute the difference to the HSA and be neutral on payroll deductions.

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Health Savings Account Overview

Tax Advantages

Contributions are tax-free

Withdrawals are tax-free when used to pay for qualified medical expenses

Earnings grow tax-free

Even if your HSA-compatible coverage ends, you can use HSA funds tax-free for eligible medical expenses

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continued …CDHP 2014CDHP 2014

Health Savings Account Overview

Allows Long-term Investment Opportunities

HSA funds may be invested for greater earning potential

Choose from a variety of mutual funds

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ResourcesFurther information can be found on the City’s

website.

Our medical carriers’ websites also house important information to help you be a better health care consumer

www.myregence.com

www.kp.org

Each carrier’s website will help you understand the costs for various procedures, compare providers for cost and quality, review costs for prescription drugs

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Resources

Cascade Centers offers health education services to City employees along with Wellness.

www.cascadecenters.com

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Questions and Discussion

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