your cigna choice fund health savings account€¦ · what is a health savings account (hsa) plan?...
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YOUR CIGNA CHOICE FUND®
HEALTH SAVINGSACCOUNT
A health plan plus a health savings account.
2Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
Basic Principles
• What if we bought groceries the
way we buy health care?
– Pay $10 at the door
– No price tags on shelves
– How does our behavior
change?
– How does the store’s behavior
change?
3Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
• Healthcare Consumerism is about transforming a health benefit plan into one that puts economic purchasing power – and decision-making – in the hands of participants.
• It’s about providing the information and decision support tools they need, along with financial incentives, rewards and other benefits and tools which encourage personal involvement in altering health and health care purchasing behaviors.
• Must work for the sick as well as for the healthy and for those who are technically savvy and those who are not.
What is Consumer-Driven Health Care?
4Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna
WHAT IS A HEALTH SAVINGS ACCOUNT (HSA) PLAN?
• A health plan that provides coverage for qualified medical/pharmacy expenses and
allows you the option to save HSA dollars on a tax advantaged basis.
• Your employer contributes and you can too through payroll deduction!
• The total 2016 annual contribution limit for employee + employer is:
- $3,350 Single Coverage
- $6,750 Family Coverage
• Employee and employer money deposited into the HSA is generally not taxable
• Age 55 or older - Maximum contribution increases by $1,000 (considered a “catch-up”
contribution)
+ =Qualified
Medical Plan
Tax-advantaged
HSA PlanHealth Savings
Account
Plan Design Samples
5Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
Deductible Averages
Most Common
Deductible
Most Common
OOP Max
HSAIndividual $1,500 $6,550
Family $3,000 $13,110
Coinsurance
Average In-Network
Coinsurance
Average Out-of-
Network
Coinsurance
HSA 70% 50%
6Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna
AM I ELIGIBLE TO PARTICIPATE IN AN HSA PLAN?
Because HSA plans have special tax advantages, the IRS defines specific rules
for participation. To be eligible, you:
– Must be enrolled in an IRS-qualified high-deductible medical plan (high-deductible
medical plans sold with Cigna’s Choice Fund HSA meet IRS requirements)
– Cannot have any other health coverage
– Not covered by spouse’s medical or pharmacy plan
– Not covered through Medicare Part A or Part B, Part D, or through TRICARE
– Not covered through a general-purpose Flexible Spending Account (FSA) plan
(either employer’s or spouse’s)
– Cannot be claimed as a dependent on another person’s tax return
7
BENEFITS OF AN HSA
8
TRIPLE TAX ADVANTAGES OF AN HSA
• Payroll deduction contributions are pre-tax*
• After-tax contributions can be deducted when you file your tax return
• Interest earned on your cash account is generally not taxable*
• Investment earnings on mutual funds are generally not taxable*
• Withdrawals to pay qualified health care expenses are tax-free
• Withdrawals for ineligible expenses are taxed and you pay a 20% penalty
• At age 65, withdraw funds for any reason with no penalty (taxes do apply)
Contributions
HSA Account
Growth
Withdrawals
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
* HSA contributions and earnings are not subject to federal taxes and not subject to state taxes in most states. A few stats do not allow pretax treatment of
contributions or earnings: Alabama, California, New Hampshire and New Jersey.
9
SAVING FOR THE FUTURE
100% Rollover of
HSA dollars year
over year
Portable – take it
with you
Use HSA dollars
to pay premiums
for:
COBRA
Long-Term Care
Medicare
You choose how and when to use your HSA
Use as Income
During Retirement
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
Investment options
1010Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
• $2,000 minimum in HSA to invest.
• Once the investment account is open, no
minimum balance applies
• No minimum deposit for any fund
• Tax-free growth of interest or
investment earnings
• No monthly fees apply
• Track your balance online or with
convenient monthly statements
11
HOW ARE MEDICAL CLAIMS PAID?
11Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna 11
Cigna provides an Explanation of Benefits or EOB
(“receipt”) showing:
Doctor’s charge, Cigna discount, amount billed, (amount
deducted from the HSA if elected), amount paid to
doctor/facility and remaining HSA balance (if medical
automatically claim forwarding elected).
Sick visit to an in-network doctor/hospital. Show
your Cigna Choice Fund ID card.
Health Care Professional files claim with Cigna directly.
Cigna receives the claim and processes it based on
the plan deductible, covered expenses and Cigna-
negotiated discounts.
ID Card
EOB
12
This is an example used for illustrative purposes only.
• Single, in her 50s
• Diabetes; controlling health
through medication
• Looking to save money for future
health expenses
meet Karen
HSA
EMPLOYER
$500
KAREN
$0.00
500.00
+
PLAN
70%
KAREN
30%
+PLAN
100%
IN-NETWORK PREVENTIVE CARE IS COVERED BY THE PLAN AT 100%
1,948.00
70% plan: 1364.00
30% Karen: 584.00
Deductible: –1500.00
TOTAL EXPENSES
Preventive care $ 398.00
2 ER visits 2600.00
4 PCP visits 320.00
12 Generic Rx 288.00
3 Brand Rx 240.00
TOTAL 3,846.00
100% covered –398.00
Karen’s
Deductible
–1500.00
70% plan –1364.00
30% Karen –584.00
BALANCE DUE 0.00
-1,584.00HSA BALANCE
30% Karen: –584.00
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
13
This is an example used for illustrative purposes only.
• Married in her 30s
• Pregnant; having a baby
• Looking to save money for future
health expenses meet Mary
HSA
EMPLOYER
$1000
MARY
$4,000
$5,000.00
+
PLAN
70%
KAREN
30%
+PLAN
100%
IN-NETWORK PREVENTIVE CARE IS COVERED BY THE PLAN AT 100%
4,313.00
70% plan: 3062.00
30% Mary: 1313.00
Deductible: –3000.00
TOTAL EXPENSES
Check ups 767.00
Global Delivery 4600.00
Physician bill for
delivery
1320.00
Anesthesiologist 688.00
TOTAL 7,375.00
Mary Deductible –3000.00
70% plan –3062.00
30% Mary –1313.00
BALANCE DUE 0.00
687.00HSA BALANCE
30% Mary: –1313.00
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
14
This is an example used for illustrative purposes only.
• Married in his 40s with a family
• Has the flu; needs to have a visit to the PCP
meet Joe
HSA
EMPLOYER
$1000
JOE
$1,000
2,000.00
+
PLAN
70%
JOE
30%
+PLAN
100%
IN-NETWORK PREVENTIVE CARE IS COVERED BY THE PLAN AT 100%
0.00
70% plan: 0.00
30% Joe: 0.00
Deductible: –3000.00
TOTAL EXPENSES
Preventive care 252.00
PCP visit 120.00
TOTAL 372.00
Preventive
100%
–252.00
Joe’s Deductible –120.00
100% taken
from Joe’s ded
120.00
BALANCE DUE 0.00
1880.00HSA BALANCE
Joe owe : –120.00
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
15
This is an example used for illustrative purposes only.
• A dependent child, age 13
• Football injury; that turns in to a broken arm that needs
PT therapymeet Justin
HSA
EMPLOYER
$1000
JUSTIN
$0.00
1,000.00
+
PLAN
70%
JUSTIN
30%
+PLAN
100%
IN-NETWORK PREVENTIVE CARE IS COVERED BY THE PLAN AT 100%
700.00
70% plan: 1448.00
30% Justin: 620.00
Deductible: –3000.00
TOTAL EXPENSES
Preventive care $ 298.00
ER visit 2800.00
4 PCP visits 620.00
7 Specialist
visits
1368.00
3 Brand Rx 280.00
TOTAL 5,366.00
100% covered –298.00
Justin’s
Deductible
–3000.00
70% plan –1448.00
30% Justin –620.00
BALANCE DUE 2,068.00
-2620.00HSA BALANCE
30% Justin: –620.00
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna
16
MANAGING AN HSA
What are qualified health care expenses?
17Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
Examples of nonqualified
health care expenses
Examples of qualified
health care expenses*
Qualified health care expenses are determined by the IRS
* This is not a complete list. For a detailed list, visit Cigna.com/expenses or the IRS website at
www.irs.gov and see Publications 502 and 969 for additional information.
• Air purifiers
• Cosmetic surgery and related expenses
• Health club dues (unless prescribed by
physician to treat illness)
• Illegal operations and treatments
• Massages for general well-being
• Premiums for health care coverage
• Transportation (unless specifically for and
essential to medical care)
• Toothpaste, cosmetics and toiletries
• Vitamins and nutritional supplements
• Weight loss programs (unless for a
specific illness)
• Deductibles and out-of-pocket costs for
medical and dental care
• Prescriptions
• Vision care, including glasses and LASIK
eye surgery
• Smoking cessation treatment
and prescriptions
• Family planning procedures
• Chiropractic services
• Some insurance premiums, such as
long-term care, COBRA and health care
coverage premiums while receiving
unemployment compensation
18Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna 18
Integrated pre- and
post-enrollment
communications
One website –
myCigna.com
Combined
financial statements
One service center
Personal Health
Advocate for
decision support
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna
myCigna
app &
mobile
access
New!
24/7/365 live service
150 languages
Social Media
Q1
Q2Q3
Q4One-of-a-kind Personal
Cost & Quality Estimator
Customer Experience – Simple and Easy
Managing your HSA on the go
1919
Manage your
account anytime,
anywhere
Contribution alerts
Contribution posted to your account ☐ Email ☐ Text Message
HSA available cash balance is below $ ☐ Email ☐ Text Message
HSA contributions year-to-date are within $ of the IRS maximum ☐ Email ☐ Text Message
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
Choose emails
or text messages –
it’s your choice
Get mobile
or email alerts
from HSA Bank
Sign up for alerts
on the HSA Bank
online banking portal
you access through
myCigna.com
24
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HSA ACCESS TO FUNDS
Customers choose when and how they access their money
Regardless of how the HSA is accessed, all balance and transaction activity is available online at
myCigna.com
• Cigna will automatically pay eligible medical expenses from your HSA
• This option can be selected at enrollment or any time during the year
• Pay expenses directly from the HSA
• Monitor, manage and schedule payments online, anytime
• Payments can be scheduled on a one-time or recurring basis
• Purchase and write checks to pay for out-of-pocket expenses
• Use the MasterCard-branded debit card to pay for out-of-pocket expenses
• The card can also be used to get cash at ATMs to reimburse yourself for
qualified expenses paid with personal fundsDebit Card
Online Bill Pay &
Electronic Fund
Transfer
Checkbook
Automatic Claim
Forwarding (ACF)
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
21
TAX RESPONSIBILITIES AND REPORTING
Employee
ClientBank
Bank reporting for year-end taxes will be sent to the employee (accountholder)
Form 1099-SA – Reporting all distributions from the HSA
Form 5498-SA – Reporting of contributions and transfers into the HSA
Employee (accountholder) responsibility
Ensure total contributions do not exceed allowable maximums
Keep accurate records of contributions and withdrawals
Maintain receipts for all use of HSA dollars: purchases and bill payments
File form 8889 as part of income tax submission to the IRS
Client reporting for year-end taxes will be sent to the employee (accountholder)
Form W-2: Reporting all employer contributions, including pretax payroll deductions. Employer contributions are not considered part of your income
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
If you need more information
22Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
• myCigna.com
• Available 24/7/365
• Single sign on to your
HSA information
• Personalized site to learn
about your benefits, track
claims and much more
• 1.800.244.6224
Customer Service
24/7/365
• Medical and Drug Cost
Comparison Tool !!!!!!!
Educational tools and resources
23Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
Choice Fund HSA Video
• How to use your HSA
HSA Savings Calculator
• Tax Savings
• Future Growth
HSA BASICS
24
WHAT HAPPENS WHEN AN EMPLOYEE LEAVES THE PLAN?
24
Employer
• Send updated eligibility information
to Cigna.
• Termination is received by the HSA
system via the eligibility file.
• After 15 days, the termination is
released to the bank and they begin
process to convert HSA to an
individual account.
Employee
• HSA dollars are portable and theirs to keep.
• No longer able to contribute to the HSA
(unless covered through an HSA-qualified
plan and remain eligible).
• Can continue using the HSA funds for qualified health care
expenses for their qualified dependents.
• Bank begins 30-day process to transition account to a free-
agent account. Employee may have different/additional
account fees.
• Receives letter from bank outlining changes to the account
and the options available:
• Transfer the account to a free-agent account with
HSA Bank
• Transfer the funds to an HSA at another institution
• Close the account
• If free-agent account is opened, employee will have a direct
relationship with the bank. (The bank cannot provide Cigna
will any information about the account.)
Change in employee status or plan change
Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna
25Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2012 Cigna
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