Isn’t It Time for a
Health Savings Account?
Savings solutions. Comprehensive Coverage. Empowered Employees.
Introducing Health Savings Accounts
HSAs are complex arrangements
subject to various IRS rules
What is an HSA • Employees who withdraw
money for purposes other
and regulations, which are not
all explained in this brochure.
and how does than qualified medical
expenses must pay taxes on
Please read the “Important it work? the withdrawal, and a 10%
Notice” at the end of this IRS penalty.
brochure for important Health Savings Accounts (HSAs)
• Contributions to the fund may
information. are tax-advantaged savings
now exceed the plan deductible.
accounts that are combined with
The maximum contribution
a qualifying High-Deductible
amount in 2007 is $2,850 for
Health Plan (HDHP) to
self-only coverage and $5,650
maximize choice while helping
for family coverage (subject to
to reduce health plan premium
certain maximum amounts set
by the IRS.) The maximum
• An HSA is a personal, interest contribution amounts for
bearing account that may be 2008 are $2,900 for self-only
funded by the employer coverage and $5,800 for family
and/or the employee. coverage.
• The HSA is to be used with a As you can see, HSAs operate
qualified high-deductible differently than other health care
health plan and may be used funding arrangements you are
to pay for qualified medical used to choosing for your
expenses. employees. They allow employees
• Employees can make pre-tax to be more involved in deciding
contributions through payroll how and where their health care
deduction to the HSA dollars are spent while providing
account and withdrawals for the security of a high quality,
qualified medical expenses are High-Deductible Health Plan to
tax-free. cover medical expenses over and
• Unused HSA funds may be above the deductible amount
rolled over indefinitely and when they occur.
because the account is owned
by the employee, he/she can
take it when leaving or
These accounts provide savings
solutions while maintaining
high quality health care coverage
and empowering employees to
become better health care
How ConnectiCare’s High- Why Choose
Deductible Health Plans work an HSA?
High-Deductible Health Plans Hampshire counties in Multi-year benefits
combine member responsibility Massachusetts, and Orange, strategy:
for health care decisions with Putnam, Rockland and We’d be happy to consult with
quality benefits coverage. When Westchester counties in you in developing a custom
you combine the savings account New York. multi-year strategy to introduce
aspects of HSAs with the proven • More than 85 hospitals and HSAs to your employees, and
quality of ConnectiCare’s benefit 22,500 health care providers to help you increase their migration
plans you have a powerful choose from into your HSA plan in future
combination of tools to help years.
• Access to nationally-recognized,
employees understand the value
of their health care coverage.
Management programs including
Premium savings and
High-Deductible Health Plans
Birth Expectations, Breathe, stability:
provide members with access to With health care costs continuing
DiabetiCare and HeartCare
a range of benefits including: to increase, many employers are
• Healthy Alternatives — a series
unable to stretch their budget
• Coverage for medical services of available discount programs
any further — and some are
including prescription drugs. designed to improve members’
forced to stop offering health
Please review your benefits health through a variety of
benefits altogether. When
summary for more information. resources including health club
compared to traditional forms of
• Medical and prescription drug membership, weight manage-
coverage, HSAs can help to bring
expenses that are subject to the ment programs, nutritional
annual premium increases under
deductible, copay or coinsurance counseling, acupuncture,
control. You can even use part of
(if applicable). massage therapy and more.
your premium savings to fund
• First dollar coverage for a broad Another advantage that your employees’ HSA account if
list of preventive services. Please ConnectiCare plan designs offer you decide to do so.
review your benefits summary is that these plans support certain
for more information. preventive care services at 100%
• In-network services from coverage, or at a small copayment coverage:
ConnectiCare’s participating based on the plan design you By making the most out of
providers located throughout select. These services are not health care dollars, HSAs allow
all of Connecticut, Berkshire, subject to the deductible, (such you to continue providing the
Franklin, Hampden and as well visits to a Primary Care high-quality health benefits your
Physician.) employees have come to rely on.
Because annual premium increases
are mitigated for the employer,
the employee, in turn, might pay
lower premium contributions.
The design of HSAs seeks to
make employees active and
involved participants in their
health care. There are financial
incentives for employees to make
informed and prudent health
care decisions. Employees view
the HSA as spending “their”
money, and begin seeking the
most value for their dollars.
Individuals with chronic health
conditions, for example, can help
reduce treatment costs by
enrolling in one of our nationally
recognized Health Management
Programs. These programs offer
See how an HSA can lower employer
one-on-one assistance from a health care costs
specially trained nurse case
manager, who provides informa- The illustration below shows how an employer may achieve greater premium savings by switching
tion about self-care, lifestyle coverage to a ConnectiCare HSA-compatible High-Deductible Health Plan. All cost information
changes, evidence-based health is for example purposes only and may not reflect actual premium savings.
care practices, and treatment
Choice and flexibility: Employee: Male
• You choose which qualified Coverage Type: Family
high-deductible health plan(s) Plan Type: HMO OA 20-30 copay
best meet your company’s Rx coverage: $10/$20/$35
Employer monthly cost: $1,400
• You can choose the employer
contribution level for the HSA.
• You decide whether to have HSA plan savings
HSA contributions deposited
HSA Plan Type: HMO-OA HDHP $3,000 Family Deductible
annually in one lump sum,
Rx coverage: $15/$25/$40 copay after deductible is met; up to $1,500
Rx family copay maximum.
monthly or weekly.
Employer cost per month: $1,000
Tax-free benefit: Monthly employer premium savings when enrolled in a
Any contribution you make to ConnectiCare HSA-compatible HDHP plan: $400
the HSA is a tax-free benefit for Annual employer premium savings: $4,800
your employees. 100% employer contribution to HSA account*: $3,000
Annual employer net savings: $1,800
No “use it or lose it”
The employees’ unused HSA * Employers can choose to contribute any portion of the maximum contribution amount to employees’ HSA accounts, or nothing at
funds roll over year after year. all, as long as they meet comparability rules. Savings may vary by employee based on percentage of contribution, HSA plan type
selected, coverage type and Rx coverage selected. Studies have shown that employers who fund a portion of the plan deductible for
their employees’ HSA accounts enjoy greater employee enrollment in these types of plans. We’d be happy to assist you and your broker
in establishing a multi-year contribution strategy.
There are IRS rules governing employer contributions to employees’ HSA accounts, and employers are advised to consult qualified tax
or legal professionals to assure compliance with these rules. Also, there are instances where total health plan costs for members may be
higher with an HSA than with a traditional HMO plan.
Because your employees’ HSA Having a ConnectiCare HDHP ConnectiCare also offers a
accounts can be used with also means you get the outstanding number of value-added programs
ConnectiCare HSA-compatible health plan service and quality to support and promote your
High-Deductible Health Plans, that ConnectiCare is known for. employees’ health and wellness.
employees can benefit from ConnectiCare earned the highest
significant savings on most Please see “Important Notice”,
member satisfaction score for
covered services due to on inside back cover, for further
customer service and claims
ConnectiCare’s negotiated information.
processing of any health plan in
participating provider and Connecticut — and well above
prescription drug rates. This the national average, according to
means that their HSA funds can the 2006 Consumer Assessment
go further with ConnectiCare. of Healthcare Providers and
ConnectiCare’s negotiated rates Systems Survey (CAHPS).
are generally better than those for ConnectiCare has also maintained
PPO and fee-for-service plans. four-star excellent accreditation
Participating providers must accept status from the National
the negotiated ConnectiCare rate Committee for Quality Assurance
as payment in full and employees (NCQA) since the category was
cannot be billed for any balance. established in 1999.
You and your employees can rely on the
outstanding health plan service and quality
that ConnectiCare is known for.
feature, and more information
Information about a member’s doctor.
is power We have also incorporated the
ability to search for doctors
Because an HSA gives members by county, city, ZIP code,
more control over how their name, network affiliation and
health care dollars are spent, it’s distance. Members can also
important for your employees to create a customized, printable
be as informed as possible about directory.
their health care decisions. To • The ability to obtain physician
help your employees make these profiles.
decisions we offer a variety of
powerful, useful tools on our
Web site. With these tools they’ll PlanCompare
be able to navigate through and
more clearly manage the many & CostCompare
choices they have when consid-
ering their personal health care
needs. allow your Personal Subimo
employees to Health Healthcare
Member self- Advisor™ and
do more Manager
service tools The Personal Health Manager PharmaAdvisor™
Choosing the right health benefit
In the Managing Your Accounts plan is important but it can provides members with online
and the Cost of Care sections of information, resources and tools These tools are for anyone facing
sometimes be a daunting task.
our Web site we provide a variety to help maintain their health. an important health care decision
of tools that outline each member’s That’s why ConnectiCare has
Members can use it to: or for those needing to learn
personal health plan basics. contracted with WebMD®, to
how to manage a particular
These include: provide a decision support tool
• Complete a Health Risk condition. This combined
• Medical and pharmacy claim that can help sort through an
Assessment; suite of tools is available to
history. Members can view array of benefit plans and price
• Create an electronic Personal ConnectiCare members at no
up to 18 months of claims comparisons.
Health Record; charge and offers a number of
history including claim totals,
Features allow for personalized references including a Decision
deductibles, coinsurance • View WebMD’s Treatment
input providing a more accurate Guide to help your employees
where applicable and other Cost Estimator to determine
analysis of the total costs includ- and their families address and
relevant information. estimated costs for hundreds of
ing the ability to: act on key health-related
common procedures and tests;
• Health Care Financial decisions.
Summary. This is a summary • compare the benefits and costs • Receive targeted wellness
for subscribers of our of the various plan options information; Viewing benefit summaries
High-Deductible Health Plans offered; • Set up reminders about online. Members can check
(HDHPs) which are appointments and screenings; their benefit summaries for
• provide employee paycheck
compatible with Health and more. copayment information,
frequency to help calculate
Savings Accounts (HSAs). deductible, coinsurance and
their annual premium
It’s especially important for related information whenever
HSA account holders to keep they need it.
• enter the employee-contribution
track of their health care Staying Healthy. With this tool
amount to gain a more
spending because they can use members can stay in control of
accurate assessment of the
these tax-exempt accounts for their health with a variety of
total cost-share; and
qualified medical expenses. features including: Managing
• enter the employee’s and/or Your Health, My Health Resources,
• Find a Doctor, our online
the employer’s annual HSA and Health Trackers.
provider directory provides
contribution, if applicable.
frequent updates of our
provider data, a Quick Search
Health Worksite Healthy
Management Wellness Alternatives
Programs ConnectiCare has developed a ConnectiCare’s Healthy
full range of wellness programs Alternatives offers a number of
ConnectiCare is one of only a for you and your employees. discounts on health-related items
handful of health plans in the ConnectiCare can customize and services such as weight
nation to receive a full, three-year programs to fit specific worksite reduction programs, acupuncture,
accreditation from the NCQA needs. Programs include: massage therapy, and nutritional
for all of our health management supplements. The program is
programs. These programs provide • Stress management designed to assist members in
education and support to • Medical self care improving and maintaining their
members to help them control • Nutrition and weight health. ConnectiCare members
their conditions, improve their management enjoy discounts just by showing
quality of life, and maintain their • Smoking cessation their ID cards.
best health status. • Healthy fitness
• Birth Expectations — for • Health risk profiling
high-risk pregnancies • Prenatal education
• BREATHE — for asthma and
Worksite Wellness programs
can help to reduce absenteeism,
• DiabetiCare — for diabetes increase productivity and increase
• HeartCare — for coronary employee satisfaction and
artery disease and congestive goodwill. Note: There is a fee
heart failure for these programs.
In addition, ConnectiCare covers
immunizations and screenings
designed to encourage preventive
measures that help protect
against and detect serious illness.
And, ConnectiCare’s Pharmacy
Quality Initiatives have shown
significant impact in addressing
cholesterol, diabetes, heart
disease, asthma, and drug safety
in the elderly.
First HSA — nationally
recognized leader in
ConnectiCare has selected one of the nation’s leading authorities on
Health Savings Account administration as a preferred administrator
that can manage, administer and service your employees’ HSA
accounts. First HSA is a nationally recognized leader in HSA account
administration and has worked with members of Congress in the
development of today’s HSA account rules. For more information on
First HSA call (610) 678-6000 or toll-free at 1-888-769-8696.
First HSA provides a full range of administrative and technical services:
• Account set-up and administration
• Flexible and convenient contribution options
• A checkbook for convenient payment of covered medical services
• A VISA® debit card
• Automated telephone banking 24-hours-day, 7-days-a-week
• Monthly account statements detailing contributions, withdrawals,
interest earned and ending balance
• Year-end tax statements
• Internet access to account information via the First HSA Web site,
• Integrated investment options
• Competitive interest rates
• Free monthly administrative fees as long as your employees are
enrolled in a ConnectiCare High-Deductible Health Plan
First HSA is a nationally
recognized leader in HSA
Getting started and setting up HSA accounts
Here are some simple steps to follow to start your HSA enrollment process:
STEP 1: Enroll in one of ConnectiCare’s High-Deductible Health Plans.
STEP 2: Distribute First HSA information to your employees.
STEP 3: Determine your method of contribution. Contact First HSA for
STEP 4: Collect First HSA applications.
STEP 5: Submit First HSA applications to First HSA.
STEP 6: The applications will be processed and a “Welcome Packet” will
be mailed to your employees.
For more information on consumer-driven health plan options, please
contact your agent or broker, or call your ConnectiCare Sales Executive
or Account Manager.
There are instances where total health plan costs for members may be
higher with an HSA than with a traditional HMO plan.
There may be some rare circumstances in which the fee that is contracted
between ConnectiCare and its providers can be higher than the billed
rate. In these instances (less than 1% of all cases) a member will be
required to pay the higher amount for these covered services even
though the billed rate may be lower. This payment arrangement must
be met to allow for the tax-qualiﬁed status of his or her high-
ConnectiCare’s HSA-compatible high deductible health plans (Plans)
are intended to be appropriate for use with HSA accounts. The Plans
have been designed to conform with Federal Internal Revenue Service
(IRS) guidelines on such plans. However, the IRS has made no determi-
nation that the Plans are qualiﬁed. Whether or not an HSA used with
these Plans will provide a ConnectiCare member with a tax advantage
depends on a number of circumstances, including the member’s personal
coverage situation, contributions to and withdrawals from the HSA
account, other coverage a member or spouse may have, and changes to
or interpretations of IRS rules. Members should consult with a qualiﬁed
tax advisor in determining whether and how this option may provide
them with a tax beneﬁt. ConnectiCare cannot guarantee that tax beneﬁts
will accrue to anyone covered under the Plan.
ConnectiCare provides only health plan coverage and administration.
First HSA provides HSA accounts and administration. The accounts are
separate from ConnectiCare health plans. ConnectiCare is not responsible
for the administration of any HSA accounts or other ﬁnancial accounts
used in connection with its health coverage products. First HSA may
charge you a fee for the set-up or administration of your HSA account.
This brochure is only a general overview of some HSA and consumer
driven health plan information. It is not intended to provide tax or
legal advice of any kind, and neither the accuracy nor completeness of
any information is guaranteed. Consult a qualiﬁed tax or legal profes-
sional with any tax or legal questions you may have.
175 Scott Swamp Road, Farmington, CT 06032
Coverage is provided by and services are administered as follows: In Connecticut: Group HMO and POS coverage, and Individual HMO is underwritten by
ConnectiCare, Inc.; Individual POS is underwritten by ConnectiCare Insurance Company, Inc. In Massachusetts: Group HMO and POS coverage is underwritten
by ConnectiCare of Massachusetts, Inc. In New York: HMO and POS is underwritten by ConnectiCare of New York, Inc. FlexPOS, PPO coverage, ASO/Self-funded
services, and Dental products are administered or underwritten by ConnectiCare Insurance Company, Inc.