A new approach
to Your Health Benefits
I S N ’ T I T T I M E F O R A
Health Savings Account?
HSAs are complex arrangements subject to various IRS rules and regulations, which are not all
explained in this brochure. Please read the “Important Notice” at the end of this brochure for
Introducing Health Savings Accounts
Welcome! Your employer has chosen to offer a Health Savings Account with an HSA-compatible High
Deductible Health Plan as part of your beneﬁts package. ConnectiCare offers employers and their employees
the opportunity to select First HSA, our preferred HSA administrator, to administer your HSA account.
Please note that you may choose any qualiﬁed HSA administrator for your plan. HSAs give you greater say
in how your health care dollars are spent and can also make health plan premiums more affordable.
What is an HSA and how is $2,850 for self-only coverage and $5,650 for
family coverage (subject to maximum amounts
does it work? set by the IRS). The maximum contribution
Health Savings Accounts (HSAs) are tax-exempt amounts for 2008 are $2,900 for self-only
savings plans that are combined with a High- coverage and $5,800 for family coverage.
Deductible Health Plan (HDHP) to help reduce • There are tax beneﬁts. When you deposit money
your health plan premium costs. Funds in the into the account through payroll deduction, it
account can be used to pay for qualiﬁed health is on a pre-tax basis providing you with greater
care expenses including those applied to your earning and spending power. Employer contri-
health plan deductible. HSA funds may also be butions to the account are non-taxable for you.
used to pay for other things such as copayments,
• You can pay for a variety of medical expenses.
coinsurance or other qualiﬁed medical expenses
You can use HSA funds to pay for qualiﬁed
not covered by the health plan.
medical expenses including those applied to the
Health Savings Accounts work in concert with health plan deductible as well as for over-the-
HDHPs and have a number of unique features counter drugs, eyeglasses, prescription drugs and
including the following: other medical supplies.
• You own the account. It is a personal savings • You can carryover your funds. Unused dollars
account that earns tax-free interest. can be saved and carried over year after year.
In doing so, these dollars are invested and earn
• The account is funded by you or your employer.
You may place pre-tax money into your account
to meet your deductible. Your employer may • You can take it with you. Because this is your
also choose to fund a portion of the dollars. own personal account, you can take the dollars
you’ve earned with you when you change
• Contributions to the fund may now exceed
the plan deductible. The maximum annual
amount you are allowed to contribute in 2007
Having a ConnectiCare HDHP also means you
Advantages of ConnectiCare’s can rely on the outstanding health plan service
High-Deductible and quality that ConnectiCare is known for.
Health Plans ConnectiCare earned the highest score
for customer service and claims
High-Deductible Health Plans combine member processing of any health plan in
responsibility for health care decisions with quality Connecticut, according to the 2006
beneﬁts coverage. When you combine the savings Consumer Assessment of Healthcare
account aspect of HSAs with the proven quality Providers and Systems (CAHPS).
of ConnectiCare’s beneﬁt plans you have a ConnectiCare has also maintained four-star
combination of tools to help you understand excellent accreditation status from the National
the value of your health care coverage. High- Committee for Quality Assurance (NCQA) since
Deductible Health Plans provide you with access the category was established in 1999.
to a range of beneﬁts including:
• Coverage for medical services including Save with negotiated rates
• Medical and prescription drug expenses that are If your HSA is used with a ConnectiCare HSA-
subject to the deductible, copay or coinsurance compatible High-Deductible Health Plan, you
(if applicable) can enjoy savings on most covered services due to
ConnectiCare’s negotiated participating provider
• First dollar coverage for a broad list of preventive
and prescription drug rates. This means that your
services, please review your beneﬁt summary for
HSA funds can go further with ConnectiCare.
ConnectiCare’s negotiated rates are generally
• In-network services from ConnectiCare’s better than those for PPO and fee-for-service
participating providers located throughout all plans. Participating providers must accept the
of Connecticut, most of Berkshire and all of ConnectiCare contracted rate as payment in full.
Franklin, Hampden and Hampshire counties in You cannot be billed for any balance.
Massachusetts, and Orange, Putnam, Rockland
and Westchester counties in New York Please see “Important Notice”, on the inside back
• More than 85 hospitals and 22,500 health care cover, for more information.
providers to choose from
• Access to nationally-recognized, award-winning Information is power
Health Management programs including Birth
Expectations, Breathe, DiabetiCare and Because your HSA gives you more control over how
HeartCare your health care dollars are spent, it’s important to
• Healthy Alternatives — a series of available be as informed as possible about your health care
programs designed to improve your health decisions. To help you make these decisions we
through a variety of resources including health offer a variety of powerful, useful tools on our Web
club membership, weight management site. With these tools you’ll be able to navigate
programs, nutritional counseling, acupuncture, through and more clearly manage the many choices
massage therapy and more you have when considering your personal health
Member self-service tools • Enter the employee-contribution amount to
gain a more accurate assessment of your total
In the Managing Your Account and the Cost of costs-share; and
Care sections of our Web site we provide a variety
• Enter the employee’s and/or the employer’s
of tools that outline each member’s personal health
annual HSA contribution, if applicable.
plan basics. These include:
• Medical and pharmacy claim history. You can
view up to 18 months of claims history including Personal Health Manager
claim totals, deductibles, coinsurance where
applicable and other relevant information. WebMD’s Personal Health Manager provides
members with online information, resources and
• Health Care Financial Summary. This is a
tools to help maintain their health. Members can
summary for subscribers of our High-Deductible
use it to:
Health Plans (HDHPs) which are compatible
with Health Savings Accounts (HSAs). It’s • Complete a Health Risk Assessment;
especially important for HSA account holders to
• Create an electronic Personal Health Record;
keep track of their health care spending because
they can use these tax-exempt accounts for • View WebMD’s Treatment Cost Estimator to
qualiﬁed medical expenses. determine costs for hundreds of common
procedures and tests;
• Find a Doctor, our online provider directory
provides frequent updates of our provider data, • Receive targeted wellness information;
a Quick Search feature, and more information • Set up reminders about appointments and
about your doctor. We have also incorporated the screenings; and more.
ability to search for doctors by county, city, ZIP
code, name, network afﬁliation and distance. You
can also create a customized, printable directory. Subimo Healthcare Advisor™
• The ability to obtain physician proﬁles. and PharmaAdvisor™
These tools are for anyone facing an important
PlanCompare & health care decision or for those needing to learn
how to manage a particular condition. This
CostCompare upgrades now combined suite of tools is available to ConnectiCare
allow you to do more members at no charge and offers a number of
references including a Decision Guide to help you
Choosing the right health beneﬁt plan is important address and act on key health-related decisions.
but it can sometimes be a daunting task. That’s
why ConnectiCare has contracted with WebMD®, Viewing beneﬁt summaries online. Members can
to provide a decision support tool that can help check their beneﬁt summaries for copayment
you sort through an array of beneﬁt and price information, deductible, coinsurance and related
comparisons. information whenever they need it.
Features allow for personalized input providing a Staying Healthy. With this tool members can stay
more accurate analysis of your total costs including in control of their health with a variety of features
the ability to: including: Managing Your Health, My Health
Resources, and Health Trackers.
• Provide your paycheck frequency to help
calculate your annual premium deductions;
Case studies in savings
The following illustrations show how an individual and a family, rolling over unused funds, might use a typical HSA
over a three-year period. Keep in mind that interest may be added to and administration fees may be deducted from
the HSA account.
All cost information below is for example purposes only and does not necessarily reﬂect actual charges, your plan or
account rules or the arrangement your employer will offer you. The illustrations are based on hypothetical health plans.
Case study 1
Mary has a $1,500 High-Deductible Health Plan and an HSA plan that she contributes $1,000 to annually. Her
employer contributes $500 to the HSA for a total annual contribution of $1,500.
YEAR 1 $1,500 HSA contribution In year 1, Mary sees her physician in his ofﬁce
-$300 Medical expenses applied to the several times for a minor medical problem and has
deductible and paid from the HSA $300 applied to the deductible. She uses $300 from
$1,200 HSA balance to be rolled over her HSA leaving a balance of $1,200 in unused HSA
into year 2. funds that will be rolled over into year 2.
YEAR 2 $1,200 HSA rollover from year 1 In year 2, the $1,200 rollover is combined with the
+$1,500 Contribution for year 2 $1,500 total contributions for an HSA balance of
$2,700 HSA balance for year 2 $2,700. During the year Mary has an inpatient hospi-
tal stay for an elective surgical procedure, for which
-$1,500 Medical expenses applied to the $1,500 is applied to her deductible. Also, she has $225
deductible and paid from the HSA in prescription coinsurance costs for drugs she gets
-$225 Prescription coinsurance from her local pharmacy following her hospital stay.
amount paid from HSA In addition, Mary sees a physician on three occasions
-$105 PCP/Specialist ofﬁce visit during the year. She has two visits with her PCP and
copays paid from the HSA she pays a $30 copayment each time. Her physician
$870 HSA balance refers her to a specialist for further treatment and
she pays a $45 copayment. Therefore her total ofﬁce
-$700 Medical expenses not covered
visit copayments are $105. Mary also incurs $700 in
by plan but paid from the HSA medical costs for over-the counter medications and
$170 HSA balance to be rolled over contact lenses, which are not covered by her health
into year 3 plan but are considered qualiﬁed HSA expenses, and
she chooses to use her HSA funds to pay for these
items. The $1,500 applied to her deductible for her
hospital stay, $225 in prescription coinsurance costs,
$105 in ofﬁce visit copayments, and $700 in other
non-covered but HSA qualiﬁed expenses are reimbursed
from her HSA leaving a balance of $170 to be rolled
over to year 3.
YEAR 3 $170 HSA rollover from year 2 In year 3, the year 2 rollover of $170 is added to
+$1,500 Contribution for year 3 the year 3 annual contribution of $1,500 for an
HSA balance of $1,670.
$1,670 HSA balance for year 3
Case study 2
The next illustration is a family plan. Bob, his wife Jane, and their two children have a $5,000 High-Deductible
Health Plan and contribute $2,000 annually to their HSA. Bob’s employer has elected to contribute $2,000, for a
total annual contribution of $4,000.
YEAR 1 $4,000 HSA contribution In year 1, the children see their pediatricians for
-$1,000 Medical expenses applied to the annual exams and the health plan covers the
deductible and paid from the HSA expense at 100% with no deductible. In addition,
$3,000 HSA balance to be rolled over the family has $1,000 in expenses for an emergency
into year 2. room visit and other physician visits applied to the
deductible. The HSA is used to reimburse Bob and
Jane for the $1,000 in emergency room expenses,
but not the other physician visits applied to the
deductible, leaving an HSA balance of $3,000 to be
rolled over into year 2.
YEAR 2 $3,000 HSA rollover from year 1 In year 2, the $3,000 in rollover funds is combined
+$4,000 Contribution for year 2 with the $4,000 annual total contribution for an
$7,000 HSA balance for year 2 HSA balance of $7,000. Jane is hospitalized for an
elective surgical procedure and the family incurs
-$5,000 Medical expenses applied to the $5,000 in medical expenses applied to the
deductible and paid from the HSA deductible. In addition, the family has prescriptions
-$225 Prescription coinsurance that result in coinsurance costs of $225. The family
amount paid by HSA also incurs $1,000 in other medical expenses not
$1,775 HSA balance covered by the health plan but considered qualiﬁed
-$1,000 Medical expenses not covered HSA expenses including eyeglasses, over-the-counter
by plan but paid from HSA medications, and acupuncture treatment. Bob and
Jane use the HSA account for reimbursement of the
$775 HSA balance to be rolled over
$5,000 deductible, $225 in prescription coinsurance,
into year 3 and $1,000 in other medical expenses from the
HSA, leaving $775 to be rolled over into year 3.
YEAR 3 $775 HSA rollover from year 2 In year 3, the year 2 rollover of $775 is added to
+$4,000 Contribution for year 3 the annual contribution of $4,000 for a total
beginning HSA balance of $4,775.
$4,775 HSA balance for year 3
Administration of your HSA • Access to updated account information via the
First HSA Web site, www.1hsa.com
ConnectiCare offers employers and their employees
• Toll-free customer service telephone support at
the opportunity to select First HSA — our preferred
HSA administrator — to manage, administer and
service your HSA accounts. First HSA is one of • An integrated investment option
the nation’s leading authorities on Health Savings • Competitive interest rates
Account administration. First HSA has actively • Consumer tools such as the Medical Cost Tool
worked with members of Congress on federal and the Prescription Pricing Tool
legislation and was instrumental in the development
of today’s HSA account rules. First HSA provides
technical and customer service and support
If you need assistance
If you need assistance with administration or reim-
• Assistance in opening your account bursement of your HSA funds, or have a question
• Setting up fund deposits about your HSA account, please contact First HSA
• Regular account status reports at (610) 678-6000 or toll-free at 1-888-769-8696.
For questions about your health plan beneﬁts,
• Monthly administrative fees currently waived
please contact ConnectiCare Member Services at
(subject to future change)
HSA Questions and
1.What is an HSA?
A Health Savings Account (HSA) is a tax-
favored savings account established to pay
for qualiﬁed medical expenses. HSA account
holders enroll in a qualifying High-Deductible
Health Plan (HDHP) and contribute pre-tax
funds to the HSA that can be used to cover
qualiﬁed medical expenses including those
subject to the health plan deductible. Unused
dollars earn tax-deferred interest and can be
rolled over from year to year.
2.Who is eligible to open an HSA?
Individuals covered by a qualiﬁed HDHP
can open an HSA, subject to IRS rules and 6. What can HSA funds be used for?
restrictions. HSAs were established to provide funding for
qualiﬁed medical expenses. However, funds
3. Who is ineligible to open an can be withdrawn for any purpose but
HSA account? distributions for non-eligible expenses are
Individuals covered by another health plan, taxable and subject to a 10% penalty by the
such as someone covered by a spouse’s plan IRS.
for primary coverage, and those individuals
covered by Medicare and Medicaid. Other 7. Typically what services are covered
IRS rules and restrictions may apply. by the health plan?
Your beneﬁt summary offers a comprehensive
4. Who contributes money to an list of covered services.
Typically, the employee contributes funds to
the HSA. The employer may also make For questions about your health
contributions. plan beneﬁts, please contact
5. How much can be contributed ConnectiCare Member Services at
to the account?
The annual maximum contribution amount 1-800-251-7722.
is subject to limits set by the IRS. The 2007
contribution levels are set at a maximum of For HSA plan administration
$2,850 for an individual and $5,650 under
qualifying circumstances for a family covered questions, please contact First HSA
by a HDHP. The maximum contribution at 1-888-769-8696.
amounts for 2008 are $2,900 for self-only
coverage and $5,800 for family coverage.
Impor tant Notice:
There are instances where your total out-of-pocket health plan costs may be higher with an HSA than with a
traditional HMO plan.
When you meet the deductible under your health plan, the health plan will pay for all remaining covered medical
expenses, except that you are still responsible for any applicable coinsurance for prescription drug expenses.
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/her high-deductible health plan.
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 determination 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 Plans.
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 professional with any tax or legal questions you may have.
This is a brief summary of benefits and is not a guarantee of coverage. Refer to the appropriate ConnectiCare
Membership Agreement/Certificate of Coverage for more detailed information, exclusions and limitations. The
Membership Agreement/Certificate of Coverage will prevail for all benefits, conditions, limitations and exclusions.
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. Voluntary products are distributed by Producer Partners, Inc., and coverage is underwritten
by Boston Mutual Insurance Company.