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 2CDHP 2014

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 3CDHP 2014

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)) 4CDHP 2014

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 care Reduce 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 5CDHP 2014

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 6CDHP 2014

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. 7CDHP 2014

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% PPO 60% Non PPO $5,000 out-of-pocket maximum per person ($10,000 per family); includes the deductible Then plan pays 100% Preventive Care 100% CDHP Deductible $1,500 deductible per person ($3,000 per family) (may be offset by HSA) 8CDHP 2014

Health Savings Account (HSA) Details City Annual Contribution $500 per enrolled employee only $1,000 per enrollment employee and dependents City’s contribution will be deposited at the beginning of the plan year Annual Tax-Free Contribution Limits Employee-only coverage: $3,300 One or more dependent coverage: $6,550 $1,000 annual HSA catch-up contribution at age 55 and older Maximums are combined totals that include employer and employee contributions 9 continued … CDHP 2014

Health Savings Account (HSA) Details Establishing/Using an Account The HSA will be an employee-owned account Account is through Bank of America HSA account holders will have a debit card and/or checkbook to pay for qualified medical expenses No reporting on the account is provided to the City After 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 10 CDHP 2014

Health Savings Account Overview Flexible Portable and, like an IRA, travels with you, not your job Rolls over each year, unlike a Flexible Spending Account Not a “use it or lose it” account – save for next year, or better yet, for retirement City will make a contribution to the HSA in 2014 You 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-pocket 11 continued … 11CDHP 2014

Health Savings Account Overview Flexible Inheritable You can make an after-tax contribution to the HSA and deduct it on your federal tax return The 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. 12 CDHP 2014 continued … CDHP 2014

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 13 continued … CDHP 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 14CDHP 2014

Resources Further 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 Each carrier’s website will help you understand the costs for various procedures, compare providers for cost and quality, review costs for prescription drugs 15 CDHP 2014 continued … CDHP 2014

Resources Cascade Centers offers health education services to City employees along with Wellness. 16CDHP

Questions and Discussion 17CDHP 2014