West Chicago Elementary School District #33 PPO Health Savings Account (HSA) Effective for Plan Year January 1, 2014 – December 31, 2014

Pre-Existing Condition Exclusion Rules The Blue Cross HMO plans do not impose pre-existing condition exclusions. The Blue Cross PPO plans impose pre-existing condition exclusions in the event that you have not had continuous coverage for the past 12 months, with no break in coverage of at least 63 days. In the event that you have not had at least 12 months of prior coverage, with no break in coverage of at least 63 days, you will be subject to pre-existing condition exclusions if you decide to enroll on the Blue Cross PPO plan as of January 1, In the event that you decide to waive medical coverage through WCSD #33 when it is initially offered to you and you decide to enroll onto the plan at a later date, you will be subject to any pre-existing condition exclusions unless you can show proof that you have had at least 18-months of prior coverage, with no break in coverage of at least 63 days.

Health Savings Account (HSA) What is a health savings account (HSA)? Tax advantaged account that is designed to help you pay for health care expenses Paired with a high-deductible health plan

Health Savings Account (HSA) Who is eligible? You can open an HSA as long as you: –Have health coverage through a high-deductible health plan –Not covered by another health plan –Not enrolled in Medicare –Cannot be claimed as a dependent on someone else’s tax return

Health Savings Account (HSA) HSA’s are similar to flexible spending accounts. An HSA allows you to set money aside on a pre-tax basis to pay for eligible medical, dental, and vision expenses. Unlike a flexible spending account, there is no “use it or lose it” on the HSA. Money left in your HSA at the end of each year simply rolls over into the next year..

Health Savings Account (HSA) How does the HSA work? You enroll on an eligible high-deductible health plan You open a health savings account and you use the funds in your HSA to pay for eligible medical, dental, and vision expenses.

Health Savings Account (HSA) You must pay all the cost up to the deductible amount before this plan begins to pay for covered services. HSA’s do not have copays. All services are subject to the plan deductible. PPO HSA Benefits In-NetworkOut-of-Network Individual Deductible (Calendar Year) $2,500$5,000 Family Deductible (Calendar Year) $5,000$10,000 Physician Office Visits 100% after deductible80% after deductible Preventive Care 100%, deductible does not apply 80% after deductible Emergency Room Visits 100% after deductible In-Patient Hospital 100% after deductible80% after deductible Prescription Drug Coverage 100% after deductible80% after deductible

Health Savings Account (HSA) Why choose an HSA? Tax savings Ability to budget for current or future medical expenses Funds are FDIC-insured and interest-bearing Interest earnings are tax-free Employees own the funds so the account goes with them if they change jobs May use HSA funds as expenses are incurred or save for future eligible expenses Funds carry over from year to year (no use it or lose it rule) Employees can make contributions anytime during the year, up to the annual maximum. Employees may contribute to the HSA until they become eligible for Medicare; after which, they may use HSA funds for eligible expenses even though they no longer contribute Withdrawals used for eligible expenses are tax free until the employee is age 65; then, the HSA becomes similar to a standard IRA An HSA might not seem an attractive option for everyone. You need to look at this as a math equation. Similar to when you participate on a flexible spending account, you would want to estimate how much you anticipate spending in medical, dental, and vision expenses throughout the plan year.

You elect the amount of money you want deducted, per pay period, to fund your HSA account. Depending on your election the District may contribute to your HSA account. Funds in your HSA account can be used for eligible MEDICAL expenses, eligible DENTAL expenses, and eligible VISION expenses. You open a checking account to deposit your HSA funds. This checking account belongs to you, not the District. FUNDING THE HEALTH SAVINGS ACCOUNT (HSA)

Health Savings Account (HSA) Contributing to an HSA Employer and/or employees can contribute Employer contributions are not taxable and belong to you Pretax contributions can be made through automatic payroll deductions 2013 maximum contributions (made by you and your employer)  $3,250 Employee-only coverage  $6,450 Family coverage 55 years and older “catch-up” contributions (anytime through the year)  $1,000

Health Savings Account (HSA) If you are considering joining the HSA, ask yourself: 1)How many prescriptions do I take per month? 2)What is the total cost of those prescriptions? a.To find out the total cost, call your pharmacist and ask them “What would the cost of my medication be if I did not have insurance?” 3)Am I scheduled for an surgical procedures (in-patient or out- patient)? 4)Do I anticipate needing physical, occupational, or speech therapy over the next year? 5)How often do I go to the doctor?

Health Savings Account (HSA) 1)How many prescriptions do I take per month? This is important because if you currently participate on either the HMO or PPO through Blue Cross you simply pay a copay for your prescription medication. Remember, the HSA does not have copays, which means you will be absorbing the entire cost of the medication. Prescription Drug Claim Example (Standard PPO vs. HSA PPO): Standard PPO Plan High-Deductible HSA PPO Plan Let’s say that I have three prescriptions each month. One is a generic, which has a copay of $15. The other two are non- preferred brand drugs and each cost $50. For a one-month supply of all three medications, I am responsible for paying $115 ($15 generic + $100 for two non- preferred brand drugs at $50 each). Let’s say that I have the same three prescriptions as referenced under the Standard PPO Plan. Only now that I am paying the actual cost versus a copay, my generic medication cost is $38. One of my non- preferred medications is $167 and the other is $319. For a one-month supply of all three medications, I am responsible for paying $524 ($38 + $167+$319).

Health Savings Account (HSA) In the previous slide, that person might not have benefited from being on an HSA. However, the example below shows how a person might benefit from being on an HSA. Prescription Drug Claim Example (Standard PPO vs. HSA PPO): Standard PPO Plan High-Deductible HSA PPO Plan Let’s say that I have five prescriptions each month. All five are non-preferred brand drugs and each cost $50. For a one-month supply of all five medications, I am responsible for paying $250 (5 x $50). At the end of the year I will have paid $3,000 just in prescription drug copay’s. Note: Copay’s do not apply towards the deductible or the out-of-pocket maximums on the Standard PPO or HMO plans. Let’s say that I have the same five prescriptions as referenced under the Standard PPO Plan. Again, I am paying the actual cost versus a copay. Rx 1 cost: $96; Rx 2 cost: $119; Rx 3 cost: $167; Rx 4 cost: $319; Rx 5 cost: $472 For a one-month supply of all five medications, I am responsible for paying $1,173. I have to pay the entire amount until I reach my deductible of $2,500. Once my deductible is met Blue Cross pays 100% for the remainder of the year. $1,173 x 2 (months) = $2,346, which means that in the third month I will only be responsible for $154 of the $1,173 because at that time I’ll have met my deductible.

Health Savings Account (HSA) The two previous slides provided examples of how one plan might benefit a person versus another plan. When determining if the HSA plan is a right fit for you, there are a few things to consider. 1. Would I be able to pay for services in advance if the funds in my HSA were not available? Remember, funds are deposited into your HSA on a per pay period basis. Unlike an FSA, the HSA funds are not available in one-lump sum at the beginning of the year. They accumulate throughout the year. 2. Is there a cost-savings? In premiums (the amount you pay, per pay period, to have the insurance) - You say to yourself “I don’t even really use the insurance, I just have it in case something happens.” If that is the case, then you are paying extra premiums just so that you have copays “in case something happens”. In copay’s - On the Standard PPO plan the copay’s do not accumulate towards the deductible or out-of-pocket max. So even if I have met my deductible and out-of-pocket maximum on the Standard PPO I will always have copay’s for doctor’s visits, emergency room visits and prescription drugs.

Contact Information If you have more questions about whether or not an HSA might work for you, feel free to give me a call or send me an . Laurie Leggett Direct Dial:

Health Savings Account (HSA) There is an informative video on HSA’s at Click on “Learn More” to watch the video.

Important Please refer to the Office of Human Resources website ( for additional information, including: An archived copy of this webinar Enrollment/Change Forms Plan Documents (Benefit Summaries, Certificate Booklets) Updated Rate Sheets Required Healthcare Disclosures/Notifications