1 High Deductible Health Plan (HDHP) and Health Savings Account (HSA) INFORMATIONAL SESSIONS NOVEMBER 2011

2 Agenda Introduction of HDHP/HSA Overview of the HDHP Overview of Health Savings Accounts (HSA) Employee Plan Design Comparison/Scenarios Questions and Answer Session

3 High Deductible Health Plan (HDHP) HDHP is a PPO plan administered by United HealthCare (UHC) PPO plan provides coverage for in-network and out-of-network services UHC provider network is same as for HMO and POS plans Calendar year deductible applies to both in- network and out-of-network services High deductible required to enable Health Savings Account participation

4 Overview of HDHP In Network Out of Network Annual Deductible Individual (Employee Only) Family (Employee +1 or more dependents) $1,500 $3,000 $1,500 $3,000 Co-Insurance 20%40% Coinsurance Maximum Individual Family $1,250 $2,500 $5,000 Annual Out-of-pocket Maximum (Including Deductibles) Individual Family $2,750 $5,500 $4,000 $8,000 Lifetime Maximum Unlimited

5 Special Considerations of HDHP Co-Insurance applies after deductible is met Family deductible applies when you are one or more dependents Family deductible must be fully met even if only one person utilizes the plan Deductible and co-insurance apply to prescription drugs (NO co-pays)

6 Monthly Employee Premiums Employee Only Employee + One Dependent Employee + Two or More Dependents FT Faculty & Staff Earning Less Than $34,000 $5.47$19.81$39.62 FT Faculty & Staff Earning $34,000 or More $5.98$21.65$43.31 PT Faculty & Staff$132.17$271.00$400.11

7 7 Why to Choose the HDHP? Lower health insurance premiums Greater flexibility and control in how your healthcare dollars are spent or saved Ability to contribute to a tax-advantaged Health Savings Account (HSA) May offer the best value among the available plan choices

8 8 Why to Fund the Health Savings Account? Washington University helps fund your account with $400 per year* Contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free when used to pay for qualified medical expenses No “use-it-or-lose-it” requirement; grow your account balance year over year The funds and account is yours and goes with you even if you change jobs or insurance coverage I * Employees with salaries under $115,000 must contribute at least $200/year to their HSA and employees with salaries over $115,000 must contribute $400/year to their HSA in order to receive the University contribution.

9 9 Contribute on a tax-free basis either through: –Payroll deduction (pre-tax contribution) –Directly to USBank (top-line tax deduction) Contribution limits (2012): –Single Coverage - contribute up to $3,100 (less University contribution of $400) –Family Coverage - contribute up to $6,250 (less University contribution of $400) –Catch-Up Contribution: age 55 or older – up to an additional $1,000 Making Contributions to an HSA

10 Using Your HSA Funds Use your U.S. Bank Payment Card, write a check, or pay online to reimburse healthcare expenses. Make sure your expense is eligible Save your receipts You do not have to submit receipts for reimbursement Reimburse yourself now or later There is no specified deadline for reimbursement

11 Qualified Medical Expenses IRS Publication 502* contains a list of all approved qualified medical expenses, including: Doctor’s office visits Prescriptions Some over-the-counter items* Hospital visits Acupuncture Chiropractor Eyeglasses and contact lenses Dental treatment Eye surgery Smoking cessation programs Therapy * IRS Publication 502 can be found on-line at under Useful Links & Resources.

12 Enroll in the Health Plan through the employer and elect the U.S. Bank HSA Employer processes enrollment file Payment card(s) are ordered and mailed Employees receive “welcome” notification via Complete online enrollment process Enrollment Experience

13 Managing Your HSA Online Online capability to request additional card for spouse and dependents Convenient online Bill Pay and direct deposit reimbursement options Update dependent information, designate beneficiaries, etc. Automated reminders and notices Access to important decision support tools to make informed healthcare decisions from the U.S. Bank Healthcare Toolbox

14 “I’m on my way to the doctor. Do I have an adequate balance?” “I just purchased a prescription at my pharmacy. Will my HSA balance cover the cost?” New technologies: U.S. Bank Healthcare Mobile

15 Access investment account information such as balance and fund performance Manage your investment account online (i.e. buy and sell funds) HSA Investment Experience

16 Accountholder Support HSA Consumer Services Representatives available Monday through Friday, 7:00 a.m. to 7:00 p.m. (CST) – Monthly statements available online or mailed to your residence Annual IRS reports are provided Interactive Voice Response (IVR), 24/7 –

17 Scenario #1: Single Employee (Income >$34,000) – Generally Healthy Premium/ProcedureUHC Choice HMO UHC Choice Plus POS UHC HDHPBC ExcelBC Choice Annual Physical ($280) $0 Office Visit – Illness ($90) $25 $90 Antibiotic – Generic ($10) $10 Out-of-Pocket Cost ($380) $35 $100 Premium Contribution $468.84$775.20$71.76$1,097.76$ HSA Contribution ($400) Potential Tax Savings* 28% Rate ($756) Total Annual Cost $503.84$810.20($984.24)$ $ * Tax savings will vary based on your current FSA contribution and medical plan election.

18 Scenario #2: Employee Plus Spouse (income >$34,000) – Have 1st Baby in July Premium/ProcedureUHC Choice HMO UHC Choice Plus POS UHC HDHPBC ExcelBC Choice Pre-Natal Care – 6 OB visits ($740) $40 $740$548$740 Office Visit – Illness ($90) $25 $90$18$26 Normal Delivery ($6,000) $300 $2,936$1,200 Out-of-Pocket Cost ($6,830) $365 $3,766$1,766$1,966 Premium Contribution$3,137.04$4,802.28$389.76$5,556.54$1, HSA Contribution($400) Potential Tax Savings* 28% Rate ($1,638) Total Annual Cost$3,194.54$4,877.60$2,117.76$7,322.54$3, * Tax savings will vary based on your current FSA contribution and medical plan election.

19 Scenario #3: Employee Plus Spouse (income >$34,000) – Elective Surgery for Family Member Premium/ProcedureUHC Choice HMO UHC Choice Plus POS UHC HDHPBC ExcelBC Choice Annual Physical ($280) $0 Office Visits (1 PCP, 2 specialists) - ($330) $105 $330 MRI – Knee ($750)$150 $750$286$486 Elective Knee Surgery ($7,000 charge) $150 $2,936$1,384$1,400 Rehabilitation ($1,560 – 18 visits) $720 $312$0$312 Out-of-Pocket Cost ($9,920) $1,125 $4,328$2,000$2,528 Premium Contribution$2,615.52$3,846.72$259.80$4,474.68$ HSA Contribution($400) Potential Tax Savings* 28% Rate ($1,638) Total Annual Cost$3,740.52$4,971.72$2,549.80$6,474.68$3, * Tax savings will vary based on your current FSA contribution and medical plan election.

20 Scenario #4: Employee Plus Family with Two Children – One child has a sports injury, the other child has asthma Premium/ProcedureUHC Choice HMO UHC Choice Plus POS UHC HDHPBC ExcelBC Choice Child 1* - Emergency Room Visit, Treatment for Broken Leg, and Physical Therapy ($7,200) $630 $3,840$1,840$2,040 Child 2 - Emergency Room Visit, 1 Night in the Hospital, 4 office visits, and Asthma Medications ($5,800/$1,700 Rx) $400 + $540 (Rx) $940$1,250$1,560 + $540 (Rx) $1,760 + $540 (Rx) Employee – Routine Physical ($250) $0 Spouse – Well Woman Exam ($230) and 2 office visits for illness ($180) $0 + $50 $36$410 Out-of-Pocket Cost ($15,360)$1,620 $5,126$4,350$4,750 Premium Contribution$3,658.56$5,757.84$519.72$6,638.40$1, HSA Contribution($400) Potential Tax Savings** 28% Rate ($1,638) Total Annual Cost$5,278.56$7,377.84$3,608.72$10,988.40$6, * 4 specialist visits, 8 physical therapy sessions ** Tax savings will vary based on your current FSA contribution and medical plan election.

21 Closing Thoughts and Considerations If you plan to fully-fund the HSA, the HDHP option should be a good choice for most employees Be aware that the plan works differently than the HMO and POS plans First dollar deductible before any coverage, including Rx (except preventive care) True out-of-pocket maximum (no copays and Rx counts towards maximum) Research the full cost of your routine medical care and prescriptions Information can be found on the health plan websites and Medco.com I

22 Questions? I