2. Our Goals: Quality Affordability Choice
Meets adopted target—slightly above market
Compliance
Sustainability

3. Medical Plan Options for 16-17
Consumer Driven Health Plan with Health Savings Account (CD/HSA):
Albemarle Choice
“Traditional” Plan:
Albemarle Select
Blends current Basic/Plus plans
Monthly Premiums $86 - $330
Deductibles remain at $500/$1000
80/20 Co-insurance; co-pays for Rx, PCP/Specialist
100% coverage for preventive services
NEW Consumer Driven plan offering
Monthly premiums $15-$179
Max $4k/$8k deductible
100% coinsurance after deductible
100% coverage for preventive services
$1,104 employer HSA contribution

4. CD/HSA: A different model….
CD: Consumer Driven plan
HSA: Health Savings account
higher deductibles = lower premiums
all covered expenses paid out of pocket until deductible is met
negotiated network discount, like traditional plan
Preventive care covered 100%
tax-favored savings account helps pay the deductible/other expenses
employee & employer contributions allowed
all funds belong to employee & portable; save for future retiree health expenses
unlimited carryover (no “use it or lose it”)
contributions, interest, and earnings never taxed if used for qualifying expenses

5. CD/HSA: how they work together
Use funds in HSA to pay for expenses
Once deductible is met, CD plan pays at 100%
Use HSA for qualifying expenses of yourself, spouse, and children

6. EMPLOYER CONTRIBUTION:
Full time employee
$776/month
Traditional
CD/HSA
$776
to medical reserve fund
$92 to
HSA
$684
to medical reserve fund

8. The take aways……
A high deductible plan offers real choice as to how/when healthcare dollars are spent – CONSUMER driven
Monthly premium savings can be used to build the HSA—you get to keep your money or use it when necessary
Building the HSA (employer/employee contributions) helps prepare for future health care costs
HSA funds are portable and tax advantaged

9. Potential Disadvantages of CD/HSA plan
illness can be unpredictable; hard to accurately budget for expenses
information about cost/quality of medical care can be difficult to find
some may find it challenging to build their HSAs due to higher plan use
some may not seek medical care (or take prescription drugs) as needed in order to save money
If HSA funds used for nonmedical expenses, taxes/possible penalties apply
NEW – many unfamiliar with this model
HSA funds used for dependent children limited to IRS-qualified minors
Cannot be enrolled in Medicare and an HSA

10. One size does not fit all: which plan fits which employees best?
Consumer Driven Plan with HSA
Traditional
Prefers to pay higher known costs in order to pay lower unknown costs
Likes traditional insurance model
Prefers to pay higher unknown costs in order to pay lower known costs
Wants to manage healthcare expenses
Willing to invest premium savings to build the HSA – especially in initial years (or has “in case” funds if needed to meet deductible)

11. Comparing Out of Pocket Costs
 PROPOSED PLANS EFFECTIVE 10/1/16
Traditional
CD with HSA
Plan year deductible
$500/$1,000
$3,000/$6,000
Plan pays (after deductible)
80%
100%
Plan year maximum out-of-pocket
$4,000/$8,000
(includes possible Rx copays after deductible is met)
Tests, procedures, etc.
20% coinsurance
$0 after deductible is met
Physician Services
PCP office visit
$25
100% before deductible is met
Specialist visit
$40

12. Example #1
Soraya is a new teacher with no dependents on the health plan. She only used preventative services during the year, so no deductible for her this year
Soraya:
Traditional vs CD/HSA Plan
Annual Medical Premium
Out of Pocket Medical Costs
Annual Employer HSA Contribution
Annual Out of Pocket Cost
Annual Savings
Traditional Plan
($1,032) $0
CD/HSA Plan
($180)
+$1,104
$1,956 *
*By choosing the CD/HSA Plan, Soraya would have saved $852 on premiums AND received a $1,104 contribution into her personal HSA account. If she put that $852 of premium savings into her HSA, she’d have a balance $1,946 for the next plan year. If the employer contribution that year was equivalent to the prior year’s, she’d have enough in her HSA to meet a $3,000 deductible.

13. Example #2
Mike is a social worker with no dependents on the health plan. He needed a moderate amount of medical services/prescription drugs during the year.
Mike:
Traditional vs CD/HSA Plan
Annual Medical Premium
Out of Pocket Medical Costs
Annual Employer HSA Contribution
Annual Out of Pocket Cost
Annual Savings
Traditional Plan
($1,032)
($1,855)
n/a
($2,887)
 $100
CD/HSA Plan
($180)
($3,911)
+$1,104
($2,987)
Because Mike chose the traditional plan, he saved $100 during the year. Mike likes the fixed copayment structure of the traditional plan, even though it costs him more money in medical premiums, and he does not receive the employer HSA contribution.

14. Example #3
Michele is an office associate who covers her spouse. He’s had a bad year, with one hospitalization, multiple provider visits, and several maintenance prescriptions. He’s reached the individual out of pocket maximum for both plans
Michelle: Traditional vs CD/HSA Plan
Annual Medical Premium
Out of Pocket Medical Costs
Annual Out of Pocket Maximum
Annual Employer HSA Contribution
Annual Out of Pocket Cost
Annual Savings
Traditional Plan
($3,120)
($3,125)
$3,000 $0
($6,120)
CD/HSA Plan
($1,608)
($10,120)
$4,000
+$1,104
($4,504)
$1,616
*By choosing the CD/HSA Plan, Michele would have saved $1,512 on premiums, which more than covered the higher out of pocket maximum on that plan. She also received a $1,104 contribution into her personal HSA account.

15. Example #4
Steve is a Police Officer with family coverage. His wife and child were in a serious car accident; both are fine now, but their medical expenses hit the family medical out of pocket maximum for the year
Steve: Traditional vs CD/HSA Plan
Annual Medical Premium
Annual Out of Pocket Maximum
Annual Employer HSA Contribution
Annual Out of Pocket Cost
Annual Savings
Traditional Plan
($3,960)
$6,000 $0
($9,960)
CD/HSA Plan
($2,148)
$8,000
+$1,104
($9,044)
$916
*By choosing the CD/HSA Plan, Steve saved $1,812 on premiums and he also received a $1,104 contribution into his personal HSA account.

16. Monthly Comparison – Employee Premium Rates
Monthly Premium: Traditional Plan
Monthly Premium: CD/HSA Plan
Premium Difference
(CD vs. Traditional)
Monthly employer HSA contribution
Total Monthly Impact
Employee
$86
$15
$71
+$92
$163
Employee + Child
$129
$50
$79
$171
Employee + Children or Spouse
$260
$134
$126
$218
Family
$330
$179
$151
$242

17. Things to remember…..
If you select the Consumer Driven plan, you can only do a limited purpose FSA (dental/vision only)
If you do nothing during Open Enrollment, you will automatically be enrolled in the traditional plan option next year
If you want to participate in the Consumer Driven plan next year, you MUST enroll during Open Enrollment
BE SURE you understand your options!

18. In Summary……. Next steps…………….
SELECT: traditional plan (blend of current Plus/Basic plans)
CHOICE: Consumer Driven Health Plan with Health Savings Account
Contribute $1,104 into Health Savings Account for 16-17
Next steps…………….

19. Prepare for Open Enrollment and after!
KNOW when: runs 8/1 through 8/19
READ your benefitsFOCUS newsletters as they arrive over the summer
ATTEND an information session
VISIT
ASK HR if you have questions!
Transition to Anthem medical/dental as of 10/1/16