Employers

Document Sample
Employers Powered By Docstoc
					Considering an HDHP
   With an HSA?
 Basic HSA Plan Concept

                          Part 1: High Deductible Health Plan
                              For 2008               Single         Family
                                                                                                        Intended to
                       Min. Deductible              $1,100          $2,200                             cover serious
                       Max. Out of Pocket           $5,600         $11,200                           illness or injury
                              For 2009               Single         Family

                       Min. Deductible              $1,150          $2,300
 HSA
                       Max. Out of Pocket           $5,800         $11,600
Concept
                              Part 2: Health Savings Account                                           Can pay for
                               For 2008            Single       Family                                   eligible
                         Max. Contribution        $2,900        $5,800                                expenses not
                               For 2009            Single       Family                               covered by the
                                                                                                       health plan
                         Max. Contribution        $3,000        $5,950

                        Made by: Employer, Employee, and/or other party

*Contributions do not need to be prorated based on the date coverage began, as long as qualifying coverage is maintained
                                       through December 31st of the following year.

 2
Why choose an HSA-Compatible health plan?


 Premium Savings
     According to employers surveyed by HSA Bank, over 59%
      reported saving an average of 10 – 39%
     Lower future renewal costs
        Premium increases in HSA plans averaged under 3% while HMO,
         PPO and Indemnity plans hovered over 7%. (The Maine View)
 Ability to offer health insurance to employees
     27% of small group market did not previously offer insurance
      coverage to employees (ehealthinsurance)
 Employee opportunity to control healthcare spending
 Decreased rise of health care costs through lower
  utilization



3
    Advantages of an HSA

    For an Employer
     Tax benefits
     Employee-owned funds promote increased motivation
      for involvement in healthcare decisions resulting in:
        Healthcare dollars being spent more wisely
        Employees ‗shopping around‘ for healthcare based on quality
         of care and price
     HSAs allow ―matching‖ contribution options by
      employers and employees through a cafeteria plan




4
Advantages of an HSA

    For an Employee
     Funds roll over year to year
        No need to ―use it or lose it‖
     Tax benefits on the contributions, earnings, and
      distributions
        Potential for increased take-home pay
     Long-term investment opportunity




5
Additional HSA Funding Options…

 IRA funds may be rolled to an HSA on a one-time basis
     Subject to the annual HSA contribution maximum
     Only traditional IRAs qualify at this time
     Individuals must remain covered by a qualifying HDHP until the last day
      of the 12th month following the month of rollover to avoid tax penalties

 HRA and Health FSA may be rolled to an HSA
     Employers must amend their plan documents to allow this
     Rollovers must be made directly from the employer to the
      custodian/trustee
     The IRS can help you determine if this is a possibility


    *Always consult a qualified tax advisor, and/or the IRS for details and reporting
       requirements in regard to taxation, fund rollovers and other stipulations.


6
Designing Your
 HSA Offering
HSAs, HRAs, FSAs


                       HSA            HRA          FSA
    Account
                     Employee        Employer    Employee
    owner
                                                 Employee,
                     Employee,
    Funding                          Employer     Possible
                   Employer, Other
                                                 Employer
    Roll over                        Generally
                        Yes                         No
    year-to-year                       No
                                     Generally
    Portable            Yes                         No
                                       No


8
How HSAs & FSAs Can Work Together

 Limited Purpose FSA (can have with an HSA)
           Pay for dental and vision expenses without having to use HSA funds
 Health FSA (cannot normally have at the same time as an HSA)
           Extension provides 2.5 months beyond the end of the plan year to use FSA funds
                     Recent legislation allows employees to contribute to HSAs during the
                      extension if their FSA balance is zero during that time or the total FSA
                      balance is transferred to an HSA.

          Example of when HSA contributions can be made if an individual still has a Health FSA.
                   This assumes that the FSA plan is not renewed after the extension.
                        Jan.    Feb. March April               May June          July     Aug.   Sept.    Oct.      Nov.     Dec.


 Jan. – Dec. Plan         $0 bal. Jan. 1-March 15

 March 15th extension    $5 bal. Feb. 6 th, $0 bal. Feb 7th


  May –April Plan                                                 $0 bal. May 1-July 15
  July 15 extension                                                $32 bal. May 2nd
                                                                                                                                Plan Year
                                         Eligible to contribute to HSA                                   NOT Eligible to contribute to HSA




 9
 How HSAs & HRAs Can Work
 Together

     Three types of HRAs you can have with
      an HSA
        Post deductible HRA—pays for out-of-pocket
         expenses after the HDHP deductible has been met
        Retirement HRA—Designated for medical
         expenses after retirement
        Suspended HRA—Cannot make contributions or
         take distributions from the HRA while contributing
         to the HSA




10
     Design Makes a Difference

     Business Relations Can Provide Customized
     HSA Design Ideas
     Things to consider
        How many employees will be offered an HSA-
         compatible health plan?
        How many health plan options are being offered?
        What are your objectives for offering the HSA plan?
        What is your goal for % enrolled?




11
 Plan Design Stats

 A 2006 survey of nearly 200 agents and
  employers regarding plan design indicates that
     More than 83% of employers contribute to their
      employees‘ HSAs
       Of those employers, 78% contributed at least 20%
        of the deductible in the 1st year
       Of those employers, 71% contributed at least 20%
        of the deductible beyond the 1st year
     Nearly 72% of employers pay the set-up fees
     Nearly 25% of employers pay the monthly fees

12
  Employee
Communication
 Benefits of Communication & Education

      HSA plan selection--Based on an HSA Bank survey,
       when an employer spent at least 90 minutes explaining the
       HSA concept, the number of employees that selected an
       HSA plan grew by more than 21%
         Financial gain
             Immediate: communication/education leads to employee HDHP
              acceptance, which will decrease premium costs (supply and demand)
             Long-term: Employees are in control of healthcare spending and thus
              utilization decreases
                  Consumers paid an average of $348 less in 2005 for HSA-eligible health
                    insurance plans compared to 2004 (ehealthinsurance – July 27,2005)
      Overcoming the stigma of an HDHP
         Pre-enrollment and ongoing communication/education enables
          employees to see beyond a higher deductible to the benefits an HSA
          plan has to offer




14
 Employee Communication Tips
  Begin education early
  Combine multiple forms of communication: printed, web, multi-
   media, in-person
  Emphasize the benefits of choice and empowerment
      HSAs require employees to approach their healthcare in a new way, which
       puts them in control of their healthcare dollars
      Employees need to:
          Ask about price
          Ask if procedures are necessary
          Discuss with their physician if alternatives exist

  Compare current plan design with HSA-compatible plan design
  Illustrate the tax benefits and long-term savings potential
  Involve spouses in the communication process


15
 Employer Communication Kit

     HSA Bank offers a comprehensive communication kit, which guides
     employers through the stages of their HSA program and provides important
     educational materials:


          1. Implementation                         3. Enrollment
         Employer Welcome Kit                     Enrollment Instructions
                                          Outline of what employees will receive
                                                      Sample Emails
                                             Sample Employee Welcome Kit
          2. Pre-enrollment
               Fact Sheet
                Brochure
                                                      4. Ongoing
     Web Tools Including Calculators
                                           Monthly Employee Communications
      PowerPoint and Macromedia®
          flash presentations




16
     Are HSAs changing spending behavior?

Increased Consumerism in Healthcare
(Research results from McKinsey & Co., June 2005)
     Consumer-directed health plan holders were
     more value conscious and attentive to wellness &
     prevention and therefore:
        50% more likely to ask about costs
        30% more likely to get an annual exam
        25% more likely to engage in healthy behaviors
        20% more likely to comply with treatment regimens
        300% more likely to choose less expensive options



17
 Account Trends

Based on HSA Bank’s customer base of over 186,000
accounts as of December 31, 2007
  96.5% of all open accounts rolled over funds from 2007 to 2008
  On average, accounts rolled $2163 into 2008
  Average contribution per month = $214
  Average distribution per month = $173
  Average monthly savings = $41
  Nearly 18% of accountholders saved all contributed funds and
   rolled over an average balance of $4013 into 2008.
  More than a third of accountholders saved at least 50% of their
   2007 contributions.


18
Tax Benefits
Tax Treatment and Advantages
for an Employer

 Treated as employer-provided coverage for
  medical expenses under an accident or health plan
 Excludable from gross income
 Not subject to withholding for income tax
 Not subject to other employment taxes
      (i.e., Social Security and Medicare taxes (FICA), federal
       unemployment tax (FUTA), or the Railroad Retirement
       Tax Act)



20
 Tax Treatment and Advantages for
 Employees/Accountholders

 Contributions are either pre-tax through a cafeteria plan
  or tax-deductible
 Earnings
      HSAs grow in the same tax-deferred manner as IRAs
      Interest and investment income are also tax-free or tax
       deferred
 Distributions
      Withdrawals for qualified medical expenses are always tax-
       free. After age 65, funds may be withdrawn for any reason
       without penalty, subject to regular income tax.



21
How to Get Started
Enrollment Options

 Group Online Enrollment                             (generally most efficient method regardless of size)
       Employer initiates enrollment via our group set-up site
             Choose type of approval
             Choose how fees will be paid
       Employee
             Completes information on customized enrollment site
 Electronic Enrollment Originated From Paper
     (typically used by larger groups when group online enrollment is not chosen)
       Employee completes paper application
       Employer creates electronic data files and images of the paper
        applications
 Individual Online Enrollment (used when the employee pays the fees)
       Employee completes information on individual online enrollment site
 Paper Applications
       Employee fills out paper application and sends to HSA Bank

23
     How are Fees collected

     If Employers are paying:
      The employer can pay fees up front for the remainder of
       calendar or plan year
      Employer can be invoiced
      Per employee pricing available on a monthly or quarterly
       basis

     If Employees/Accountholders are paying:
      Set-up fees are paid with the submission of the
       application
      Monthly fees will be deducted from the account




24
 Coordinating HSA Contributions
 Since both employees and employers can make contributions, it is important to
 coordinate in order to avoid excess contributions and tax penalties. The maximum
 can be contributed through a combination of sources or a single source as long as
 the annual limit is not exceeded.



             EMPLOYER                                              HSA
           CONTRIBUTIONS                                        Contribution
                                                                  Limits

                                                 ≤
           INDIVIDUAL /
            EMPLOYEE                                          Up to the IRS determined
          CONTRIBUTIONS                                              maximums
                                                                         2008:
                                                                     $2,900 single
                                                                     $5,800 family
             IRA Transfers                                               2008:
                                                                     $3,000 single
                                                                     $5,950 family
               *If an individual has HSA accounts with different administrators, all
                  contributions count toward the annual contribution maximum.

25
Employer Contributions
    Online (ACH Pull)
          Convenient in-house system in Employer Login area
          Provided list of all employees tied to Federal ID #
          Columns after each name for ER, EE, EX allows for simple designation of
           employer, employee and employee pre-tax contribution amounts
    ACH Direct
          Employer sends ACH direct to employee‘s accounts
          Utilize discretionary data field in ACH file to code contribution sources
    Company ACH or Wire Transfer + File
          Company sends one ACH or Wire Transfer + File
          The transaction file dictates how the money is distributed to each account
    Submit a Check
          With Contribution Form




26
Employer’s Comparable
Contributions
 Comparability testing period based on a calendar year
  and determined on a monthly basis. Testing based on
  contributions to employees covered under the employer‘s
  HDHP. There is a 35% penalty for failing to meet
  comparable contribution requirements.
      Note: The employer must make comparable contributions for all
       employees with HDHPs who open HSAs under the employer‘s
       plan. Contact the IRS to determine the requirements for
       employees who have an HSA-Compatible health plan but have
       not opened an HSA by December 31st.




27
 Exceptions to the
 Comparability Rule

 Exceptions
      Due to new legislation, employers may contribute more for
       employees who are non-highly-compensated employees
       (non-HCEs) as long as contributions compare within
       employment categories. Non-HCEs are defined under
       Internal Revenue Code §414 (q)
      Comparability rules do not apply to employer contributions
       made through a Section 125 Cafeteria Plan.
      Employers may make matching contributions through a
       Section 125 Cafeteria Plan (Non-Discrimination rules apply)




28
 Comparable Contributions Example

                                                               Fam ily
                        Single /         Self + One /      Self + Two /       Self + Three /
                       Full-Tim e         Full-Tim e        Full-Tim e          Full-Tim e
                             Non-                 Non-              Non-               Non-
                   HCE       HCE         HCE      HCE      HCE      HCE      HCE       HCE
     Deductible    $1200     $1200      $2500     $2500   $2500    $2500     $2500     $2500
     Same
     Dollar        $100       $200       $150     $250     $175     $275     $200      $300
     % of          50%        75%        25%      30%      50%      60%       75%       80%
     Deductible    $600       $900       $625     $750    $1250    $1500     $1875     $2000


     *Employer may contribute up to the maximum amount as determined by the IRS.
     For 2008: $2900 for individual coverage and $5800 for family coverage For 2009: $3000 for
     individual and $5950 for family.
     **Apply the same concept for part-time employees within each category


29
     Employee Contributions

      Online Contributions (through Internet Banking)
        Recurring or one-time, as needed
      Check
        With Contribution Form tear-off (on each statement or
         downloaded from website)
        With Deposit Ticket




30
     Savings Account Option


 Interest bearing ―bank‖ account
      Accounts are opened as an FDIC-insured bank
       account through Webster Bank, N.A.
         Current interest rate and annual percentage yield
          information is available on our website,
          www.hsabank.com or by calling 800-357-6246.
             Interest rates are subject to change. Fees may
              reduce earnings.




31
 Self-Directed Investment Option

TD Ameritrade Corporate Services
     Access to stocks, bonds and over 11,000
      mutual funds
     Trades are made online or over the phone
     Transfer funds from your HSA to your
      investment account:
       Online through Internet Banking
       By calling the Client Assistance Center
     HSA Bank does not charge a fee; however,
      trading fees may apply
32
Mutual Fund Selection

Devenir Investment Advisors
     Selection Options
       Employer can choose to offer our standard selection
        of historically top-performing mutual funds
       For an additional fee, employers can choose to
        select mutual funds similar to their 401(k) offering
     Trades are completed online through HSA
      Bank‘s Internet Banking system
     HSA Bank does not charge a fee. An annual fee
      of $24 is charged by the Mutual Fund Selection
      vendor; however, no trading fees apply
33
     Methods of Distribution

      Debit Card from Visa
         POS with signature
           (no transaction fee)
         ATM with PIN ($2 fee)
         POS with PIN ($2 fee)
      Checks, $7.95 for 50 + 10
       deposit tickets
       (no transaction fee)
      Withdrawal Forms
       ($10 fee)




34
 Communication & Reporting

Accountholder
      Account statements
      IRS reporting
      Email confirmation of account opening and
       ongoing activity
Employer
      Email confirmation of deposits
      Employer newsletter
      Email updates on consumer-driven health care and
       HSA account features
      Aggregate reporting available upon request




35
 Calculation Tools


 Is an HSA Right for Me
      Compares a traditional health plan with an HSA-compatible plan to
       determine potential savings
       http://www.hsabank.com/calculators/decision_tool.aspx


 Future Value Calculator
      Calculates tax savings on contributions and tax-deferred growth as
       well as the future value of your Health Savings Account
       http://www.hsabank.com/calculators/future_value.aspx




36
             www.hsabank.com
      HSA Bank has created a website to serve the specific needs of
       and provide relevant information to:
         Prospective accountholders
             Calculation Tools
             HSA Information
             Enrollment
         Accountholders
             Internet Banking
             Self Service (forms, check/debit card
            orders, secure contact form)
         Employers
               Employer Administration Area
               Group Online Enrollment
               Group Online Contributions
               Communication Kit




37
Employer Login Area

 Online access for employers to:
     View and manage their list of employees with HSAs
     Upload contribution data and census files
     Sign-up for updates
     Sign-up for Group Online Enrollment
     Make online contributions to employee HSAs
      (separate sign-up required)

     Download the communication kit



38
     Customization Options


      Application materials
      Brochure Inserts
      Welcome letter
      Custom toll-free
       number




39
 Expertise & Commitment

 Industry leadership
     Have over $500 million in FDIC insured
      deposits and over $65 million additional dollars
      in non-FDIC insured investment accounts
     Administer more than 210,000 accounts in all
      50 states




40
     Experience

     Ten years in the HSA-industry
       Began with Medical Savings Accounts in 1997
       Continued with HSAs in 2004

     Maintain relationships with over 300
      health plans/TPAs
     Work with more than 15,000 employer
      groups


41
Service & Support
 Business Relations Department:
     Exclusively assists our employer, agent, broker, broker/dealer, health plan &
     TPA clients. (866) 357-5232 Monday-Friday 7 a.m. – 7 p.m. CST
 Regional Vice President & Assistant Vice President:
     Provide local assistance for our employer, agent, broker, broker/dealer,
     health plan & TPA clients.
 Client Assistance Center:
     Provides dedicated customer service to individual and prospective
     accountholders.
 Spanish Language Support:
     Our Client Assistance Center and Business Relations teams provide Spanish
     language support for employer relationships, accountholders and prospective
     accountholders.
 Experience:
     Our Business Relations Coordinators and Client Assistance Center receive the
     most comprehensive and up-to-date HSA training in the industry. Our
     representatives have a strong customer service background and many have
     worked in finance, insurance, and benefits administration.



42
Thank you for considering…
        zi xbypass




  *Investment products are not FDIC insured, are not a deposit or other obligation of or guaranteed by
 the bank, and are subject to investment risks including possible loss of the principal amount invested.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:15
posted:11/15/2011
language:English
pages:43