Xavier University

Open Enrollment January 1, 2011

AGENDA

What is Open Enrollment and What’s New?

Plan Summaries

What is a High Deductible Health Plan and how does it work?

What is a Health Savings Account and what do I need to know?

Xavier Plan Comparisons

FSA vs. HSA

Questions & Answers

What is Open Enrollment?

• This is the time of year when our benefit plans renew. During this period you can add or drop dependents, change, or enroll in a plan for the first time. If you would like to make changes, now is your opportunity. The next time to make changes to the medical plan will be January 1, 2012, unless you have a qualifying event such as:

• Birth or Adoption, Death of a Spouse, Loss of Coverage, Marriage, Divorce or Legal Separation.

• If you have a qualifying event, you must notify HR within 30 days of the qualifying event. At that time you may make changes to your dependent status. You may not change plans.

Medical Open Enrollment

What’s New?

Xavier will renew the medical plans with Anthem:• The middle plan, $250/$500 deductible plan will be eliminated• A high deductible health plan (HDHP) with a Health Savings Account will

be an option this year• All three plans utilize the same network, Blue Access

Dental plan is the same with a 6% increase in rates

Vision plan is the same with no change in rates

Flexible Spending Account will remain the same except over the counter medicines now require a prescription from your physician to be an eligible expense

Health Care Reform legislation changes

Health Care Reform

o Federal Extension of Dependent Coverage to Age 26

Dependents may be covered on their parent(s) medical policy until their 26th birthday. Dependent Coverage is available regardless of :

•student status,

•residency, marital status,

•financial dependency

•employment. Preventive services will not be subject to any cost sharing when a network provider is seen. The lifetime limit will be removed.

No pre-existing condition exclusion for enrollees under 19 years old

State of Ohio Extension of Dependent Coverage to Age 28

State of Ohio Dependent Age Extension for dependents beginning when dependents turns Age 26 to Age 28. Xavier will charge employee for overage dependent coverage. (ages 27 and 28)

To qualify dependent must be:• unmarried, • the natural, stepchild or adopted child of a covered employee, • be a resident of Ohio or a full-time student, • cannot be eligible for employee coverage under an employer

sponsored plan, • cannot be eligible for Medicare or Medicaid.

Definitions and Terms

Deductible is the amount a member pays for services before Anthem will begin paying for services.

Embedded Deductible is when the single deductible applies to the family contract. For instance, if one person in the family meets the single deductible the plan pays the coinsurance for that person and then the rest of the family can meet the additional deductible to meet the family deductible.

Coinsurance is the percentage members will pay after the deductible is met.

Copays are flat dollar amounts that are the members responsibility and are not subject to the deductible.

Out of Pocket Maximum is the total dollar amount a member will pay in a calendar year, including the deductible and coinsurance and excluding copays.

Plan Summaries

Network Benefits

Blue Access PPO

High Plan$0 Deductible

Blue Access PPO

Low Plan$500 Deductible

Blue Access HDHP

$2500 Deductible

Deductible: None$500/Single;

$1,000/Family$2,500/Single; $5,000/ Family

Out of Pocket Max:

Includes deductible$1,500 Single / $3,000 Family

$3,000/Single;$6,000/Family

$2,500/Single; $5,000/ Family

Preventative/Routine: Covered at 100%* Covered at 100%* Covered at 100%*

Office Visit – PCP/Specialist

$20/$40 copay $25/$45 copay Deductible, then 100%

Inpatient Services: $300 copay Ded., 80/20 Deductible, then 100%

Outpatient Surgery: $100 copay Ded., 80/20 Deductible, then 100%

Outpatient Non-Surgical

20% copay Ded., 80/20 Deductible, then 100%

Prescription - Retail $15/$40/$60 $15/$40/$60 Deductible, then 100%

Prescription – Mail Order – 90 days

$30/$100/$150 $30/$100/$150 Deductible, then 100%

*In order for a service to be paid at 100% the provider must code it as preventive

with no diagnosis code.

Claims Example

Inpatient Hospital Stay - Negotiated Fee $10,000

Current High Plan

Current Low Plan New HDHP

Deductible None $500 $2,500 Coinsurance (does not apply to inpatient hosp on High plan) 20% 20% 100%Copay $300 None NoneOut of pocket maximum (includes deductible) $1500/$3000 $3000/$6000 $2,500

Neg Fee $10,000 $10,000 $10,000 Deductible $0 $500 $2,500

Total $10,000 $9,500 $7,500 Coinsurance $0 $1,900 $0

Copay $300 $0 $0 Member Resp $300 $2,400 $2,500

* Only met out of pocket maximum on HDHP

Claims Example

MRI - Negotiated Fee $1,000

Current High Plan

Current Low Plan New HDHP

Deductible None $500 $2,500 Coinsurance (does apply to outpatient non-surgical on High plan) 20% 20% 100%

Copay $300 None None

Out of pocket maximum (includes deductible) $1500/$3000 $3000/$6000 $2,500

Neg Fee $1,000 $1,000 $1,000

Deductible $0 $500 $1,000

Total $1,000 $500 $0

Coinsurance $200 $100 $0

Member Resp $200 $600 $1,000

How Do I Choose Plans?

It will be important that you evaluate your plan options based on these variables:

• Premium deducted from your paycheck

• Number of services and type of services you and your family will use during this year (log onto MyAnthem to see past utilization)

• Costs at time of service

• Dollars from Xavier to pay for services

High Deductible Health Plan (HDHP)

What is a High Deductible Health Plan?

• The HDHP is a health plan that gives you more control over your healthcare spending by offering lower monthly premiums in exchange for a higher deductible and out-of-pocket expenses.

• Rather than paying high premiums and not utilizing the plan, you pay a lower premium, and pay for services “if and when” you need them.

How the HDHP Plan Works

You have a high deductible that you and/or your family must meet in order for the plan to begin paying. A member always pays, when seeing a network provider, the contracted negotiated fee.

Once a member meets the $2,500 single deductible, the plan pays 100% for all covered services and prescriptions for that member for the balance of the benefit year.

If you have family coverage, one person in the family will never pay more than the $2,500 single deductible on themselves. The rest of the family can meet the remaining $2,500 to meet the full $5,000 family deductible. The plan would then pay 100% of all claims and prescriptions for all covered family members for the balance of the benefit year.

Preventative/Routine services are covered at 100%!

Preventive Services

Preventive Care is not subject to the deductible!

Adult Exam, Adult Preventive Lab, and Adult Preventive Radiology

Child Exam, Child Preventive Lab, and Child Preventive Radiology

Routine Prostate Screenings (PSA) Routine Pap Smear and Mammograms Routine Immunizations under age 18

*Providers must bill Anthem as preventive in order for services to be covered at 100%. If the service is billed with a diagnosis,

it will then be subject to the deductible.

Health Coverage

AnnualDeductible

HSA

Pre

ven

tive C

are

The HDHP Plan Components

Preventive Care is covered at 100%

• Amount that needs to be satisfied before health coverage begins

• Preventive care is not subject to deductible

• Option to reimburse from this account

• Receive tax-free interest earnings while your money remains in your HSA

• If HSA funds are used for eligible expenses, then withdrawals are tax free

• Protects you from high costs

• Out-of-pocket maximums are in place for added peace of mind

Resources and Tools• Available via phone • www.anthem.com• Cost / Quality

Comparisons• More…

Health Savings Account (HSA)

What is a Health Savings Account?

• The HSA is paired with the HDHP to help pay for the large deductible.

• The HSA is a medical savings account set up exclusively for you to help pay for qualified healthcare expenses on a tax free basis (for you, your spouse, and your children).

• On average this saves you 25-30% on the dollar, depending on your tax bracket.

• Any funds leftover at the end of the year will remain in your account – the funds rollover which helps you save for future healthcare expenses (including retirement).

How is the account funded?

There are a couple of ways an account can be

Funded.

Employee Contributions

Employer Contributions

Employee Contributions are deducted from your paycheck on a pre-tax basis

While some organization elect to make an Employer Contribution, Xavier will not be contributing funds for calendar year 2011

How Much Can I Contribute to the HSA?

The IRS sets regulations on how much pre-tax dollars you and your employer can contribute to the HSA per year.

2011 HSA maximums are:

• Single: $3,050• Family: $6,150• Catch up contributions for employees 55+: $1,000

Maximums includes what Xavier may contribute to the HSA.

Saving your HSA money

Think of your HSA as two accounts:

Savings account – Your HSA contributions go into an interest-bearing savings account

Investment account – Once you build your account to a certain level, you’ll have the opportunity to invest some of your unused funds in mutual funds; investing is completely optional

Whether you invest your money or leave it all in the savings account, you may have account fees, as with any other bank account

Always save your receiptthe IRS may ask for proof your expense

is eligible

What expenses can be paid using HSA dollars?

Prescription Medication

Exams & Tests

Long Term Care Premiums

COBRA Premiums

Dental

Vision

All medical out of pocket expenses

Over the counter medicines with a prescription from your physician

And More!!!

Who is INELIGIBLE to Participate In An HSA?

Any employee ALSO enrolled in a NON High Deductible Health Plan through their spouse or other source.

An employee who is enrolled in Medicare. An employee who has already made maximum contributions to

an HSA or MSA in the same plan year Contributions cannot be made to an HSA account if the individual

can be claimed as a dependent on another person’s tax return. Any employee who is currently enrolled in an Unlimited Flexible

Spending Account. Any employee whose spouse is enrolled in an Unlimited

Flexible Spending Account. Please note the above rules are IRS guidelines.

What Happens If I Misuse My HSA?

IRS audits and penalties

20% excise tax

Income taxes applied

What Happens At Age 65?

No IRS penalties for using funds for non-qualified purchases

No 20% excise tax

Income taxes will be applied

What Happens if I Leave Xavier?

You CAN take your HSA with you – It’s portable!!

You CAN continue to invest your money and draw interest on your balances

You CAN continue to make withdrawals for qualified expenses

You CANNOT make new contributions to the account unless you become enrolled in another high deductible health plan (HDHP)

1. MEDICAL SERVICE (doctor,hospital,etc.)• Show ID Card (Not debit card!)

• Do not pay at time of service

• May ask for small “down payment.”

2. PROVIDER BILL• Do not pay initial bill from provider

• Save bill until you receive your Explanation Of Benefits from your insurance company.

* this will explain what the insurance paid and what you owe.

3. EXPLANATION OF BENEFITS• Compare your EOB to the provider’s bill.

• EOB will reflect the provider discount.

• What did my insurance pay? What do I owe? *see example

4. YOUR PAYMENT• Pay your portion as shown on EOB.

• Use HSA debit card OR alternate payment method (cash, check, etc.).

• Set up payment plan if necessary

How to Use My New HSA Plan for Medical Care

How Do I Use My HSA at the Pharmacy?

Show your Insurance Card

Your card will show no co-pay is required

The Pharmacist will enter your insurance information and the discounted carrier price will be automatically calculated

Pay for your prescription with your HSA debit card

HSA Example: Family Expenses

Preventive CarePhysical Exams $ 850Paid at 100%

Non-PreventivePrescriptions $ 1,000Urgent care visits 300Physician’s visits 600Physical therapy 400Total $ 2,300

Paid by Account $2,300

Final HSA Account Balance to be carried over to 2012 = $3,850*Plus any accrued interest & investment income.

Total contribution as of 12/31/11 $6,150

Medical Premiums

January 1, 2011Employee Monthly Cost

Employee Only

Double Family

Blue Access

PPO High$113.00 $235.00 $363.00

Blue Access

PPO Low$67.00 $141.00 $220.00

Blue Access HDHP

$29.00 $65.00 $107.00

Employee contributions for

High and Low plan are the same as 2010

Difference in Plan Premiums-Comparing PPO High to HDHP

Employee Only

Double Family

Blue Access

PPO High$113.00 $235.00 $363.00

Blue Access HDHP

$29.00 $65.00 $107.00

Monthly

Difference$84.00 $170.00 $256.00

Annual

Difference$1,008.00 $2,040.00 $3,072.00

Employee Only

Double Family

Blue Access

Low Plan$67.00 $141.00 $220.00

Blue Access HDHP

$29.00 $65.00 $107.00

Monthly

Difference$38.00 $76.00 $113.00

Annual

Difference$456.00 $912.00 $1,356.00

Difference in Plan Premiums-Comparing PPO Low to HDHP

Flexible Spending Account (FSA)

Below is an outline of the FSA plans available:

• Unlimited FSA – Allows you to pay for eligible medical, dental and vision expenses tax-free. $4,000 maximum contribution.

• Unlimited FSA is not compatible with a Health Savings Account

• Limited FSA – Allows you to pay for eligible dental and vision expenses tax-free. $4,000 maximum contribution.

• Limited FSA is compatible with a Health Savings Account

• Section 125 Dependent Care Plan – Allows you to pay for eligible dependent care expenses tax-free. $5,000 maximum contribution.

• 125 Dependent Care Plan is compatible with a Health Savings Account

*FSA dollars are forfeited at the end of the year if not spent.

Limited FSA and an HDHP

o Why would you want a Limited FSA to cover dental and vision expenses when you can use HSA dollars for these expenses?

• A Limited FSA is used when you have known dental and vision costs, like orthodontia and eyeglasses.

• Allows you to receive more tax-free services (you are limited to how much you can put in an HSA so to maximize your dollars you can put up to $4,000 in a limited FSA for dental and vision expenses).

• Protects your HSA money so you can build your account balance to use for medical services.

What forms do I need to complete?

Everyone must go online to elect medical plan, regardless if you are waiving coverage.

If you enroll in the High Deductible Health Plan (HDHP), you may need to complete a form to set up your HSA bank account. We will provide packets to those electing the HDHP. More details to follow.

YOU MUST COMPLETE ONLINE ENROLLMENT NO LATERTHAN NOVEMBER 22nd!

Will I receive new ID cards?

YES. Those changing plans will receive new ID cards.

If you enroll in the HDHP with an HSA you will receive an HSA debit card to be used for qualified expenses.

Important takeaways

Give careful consideration to how you personally plan for maximum benefit of the HDHP.

Understand the ramifications for meeting your deductible. You pay the full amount of medical cost up to your deductible before the plan picks up anything remaining. Please note that if you choose to seek services out-of-network after the deductible, there may be additional costs.

Understand the importance of making personal contributions to your HSA. This allows you to build your reserve and use a pre-tax savings option.

Consult with other dependents on your plan.

What If I have questions?

If you have any questions, please contact:

HORAN• Service Representative – Alison Bristol• Account Manager – Judi Meyer

513.745.0707 or 1.800.544.8306

QUESTIONS?