Adventures in Management - Iowa City_County Management

							    Adventures in
    Management
Adventures in Wellness
           Presentation Overview
• Health Savings Accounts
• Iowa Falls’s Experience
• Questions
Health Savings Accounts
                            Overview
• Commonly referred to as an HSA
• A savings account used with an HSA-qualified health insurance plan to
  make healthcare more affordable and to save for retirement



                                                           Insurance
Qualified Health
                            Health Savings                Premium &
 Insurance Plan
                            Account (HSA)                 Income Tax
     (QHP)
                                                            Savings
               Qualified Health Plan
•   Must have a deductible, which is a fixed dollar amount that is paid by the
    individual or family before medical expenses are payable by the insurance
    company
•   Exception is preventive care
•   Plan must meet criteria set by the Federal Government
      – Does not have co-payments for office visits, prescriptions
      – Once deductible is met, a QHP will pay 100% of covered medical expenses or
         have coinsurance/co-payments (once “out of pocket” maximum is reached,
         QHP pays at 100%)
      – Minimum Deductible              $1,200 Single / $2,400 Family
      – Max. Out of Pocket              $5,950 Single / $11,900 Family
               Health Savings Account
•   A savings account in which money can be deposited to help pay for current and
    future medical expenses, tax free, including expenses you must pay to meet the
    deductible on your qualified health insurance plan
•   If you do not spend the money, it stays in your account, can earn interest, and rolls
    over to the next year, when more money can be deposited. There is no maximum
    on the accumulation of money in the account and there is no “use it or loose it”
    rule.
•   If you leave employment, or retire, the money is still yours; you own the account
•   Maximum contribution
      – Single      $3,050
      – Family      $6,150
      Premium / Income Tax Savings
•   Premium Savings
     – Historically, HSA plans increase at about 50% of traditional plans
     – Slower increase in costs to City

•   Income Tax Savings (Employee)
     – Employee contributions to their account are pre-tax
Iowa Falls
Experience
                                   History
•   Prior to 2004 Renewal (February 2004), city was fully insured
•   2004 Renewal switched to partially funded plan
•   2010 Renewal switched to HSA plan
              Partially Self Funded Plan
                  First   Next    Next
                                           Thereafter
                 $2,500   $500   $15,000
$afe T Fund       90%     100%    20%
(City)             or      or      or          0
                 $2,250   $500   $3,000
Employee          10%
                   or      0       0           0
                  $250
Blue Cross                         80%
Blue Shield        0       0        or       100%
                                 $12,000
          Partially Self Funded Plan
• Out of Pocket Maximum for Single        $250
• Out of Pocket Maximum for Family        $500

• Prescription Drug - After a separate $100/$200 deductible (waived for
  generics), the insured paid $10/$25/$40 co-pay. Once the deductible was
  met, the co-pays were reimbursed at 100% to employee (city paid)
• Office Visit - There was a separate $20 co-pay for each office visist,
  balance is paid 100% by plan. Did not apply to out of pocket maximum.
  However, once out of pocket maximum was met, the co-pays were
  reimbursed at 100% to the employee (city paid)
        Health Savings Account Plan
•   Deductible           $2,500 Single / $5,000 Family
•   Coinsurance          0%
•   Out of Pocket Max.   $2,500 Single / $5,000 Family
•   Preventive Care      Deductible Waived (Paid by Plan 100%)
•   Ambulance            Deductible Applies
•   Chiropractic Care    Deductible Applies
•   Emergency Room       Deductible Applies
•   Office Services      Deductible Applies
•   Physician Services   Deductible Applies
•   Prescriptions        Covered by Plan, Deductible Applies
•   Once Out of Pocket Max is met, all covered services paid by Plan at 100%
                    Financial Review
• Partially Self Funded Plan
   – Plan Year 2004 through Plan Year 2008
        • City Saved $316,839 compared to staying to fully insured plan
   – Increasing costs to fund the $afe T Fund
        • Actual Expenses
             – 38% increase in expenses
             – Roller Coaster effect
        • Maximum Liability to City
             – $414,000 – Medical
             – Office Co-Pays, Prescription Co-Pays
                   Financial Review
• Health Savings Account
   – Due to Union Contracts
       • Out of Pocket Maximums could not be changed without
          negotiations
   – City Contributes to each employee’s HSA to keep Out of Pocket
     Maximums the same
       • $2,250          Single
       • $4,500          Family
   – Contributions set amount per year, no fluctuation
       • $162,000 for the change over year
                    Financial Review
• Increase in Single Premiums paid, however few single policies
• Premium Savings - $74,200
• Renewal Increases
   – PY 2008 16.57%
   – PY 2009 17.99%
   – PY 2010 -5.22%
   – PY 2011 7.13% (First HSA Renewal)
                  Employee Feedback
•   General Satisfaction from Employees
•   Prescription Shock
•   Increased personal participation in medical decisions
•   Employee’s planning for retirement
•   Educational hurdle for Employees
Questions