Docstoc

High Deductible Health Plan _HDHP_ Examples

Document Sample
High Deductible Health Plan _HDHP_ Examples Powered By Docstoc
					ResouRces Global PRofessionals


High Deductible Health Plan (HDHP) Examples



The examples below are for illustration purposes only and assume no changes to the annual plan deductibles and
coinsurance payments during the three years covered by these examples. They also assume no changes to the IRS
maximum HSA contributions and HSA catch up contributions. The IRS maximum contribution amounts are subject to
annual cost of living adjustments and may change.



                                                         Example 1 - Sandy, age 37, has a husband and two
                                                         small children. She and her husband are both in good
                                                         health. Sandy has worked at Resources for five years.
                                                         In addition to Resources’ annual contribution of $1,800,
                                                         Sandy contributes $1,448 to her HSA (the difference
                                                         between the HDHP and the PPO annual family rates).
                                                         Here is how the High Deductible Health Plan and her
                                                         HSA could work for her.



 Year One

 Employee and Family                 Eligible Expenses   Amount Applied to       Paid by HDHP        Paid from HSA
                                                         Deductible              (in-network)

 Beginning HSA balance                                                                                       $0

 Resources’ contributions                                                                               +$1,800

 Sandy’s contributions                                                                                  +$1,448

 Annual physical (2)                      $180                    $0                 $180                    $0

 Well child exam (2)                      $180                    $0                 $180                    $0

 Primary care physician visits (4)        $360                 $360                    $0                 −$360

 Specialist visits (4)                    $720                 $720                    $0                 −$720

 Prescriptions (8)                        $480                 $480                    $0                 −$480

 Remaining HSA account balance                                                                           $1,688




                                                                                                                     1
In the second year, Sandy and her husband remain in good health. However, during the year her daughter falls off her
bike, requiring a trip to the emergency room and follow up specialist care. Sandy continues to contribute the difference
between the HDHP and the PPO annual family rates to her HSA.

    Year Two

    Employee and Family                 Eligible Expenses   Amount Applied to      Paid by HDHP         Paid from HSA
                                                            Deductible             (in-network)

    Beginning HSA balance                                                                                    $1,688

    Resources’ contributions                                                                                +$1,800

    Sandy’s contributions                                                                                   +$1,448

    Annual physical (2)                       $180                   $0                $180                      $0

    Well child exam (2)                       $180                   $0                $180                      $0

    Primary care physician visits (4)         $360                 $360                  $0                  −$360

    Emergency room visit (1)                  $500                 $500                  $0                  −$500

    Specialist visits (6)                    $1,080              $1,080                  $0                 −$1,080

    Prescriptions (8)                         $480                 $480                  $0                  −$480

    Remaining HSA account balance                                                                            $2,516



In the third year, Sandy and her husband continue to be in good health and her son is less adventurous. She continues to
contribute the difference between the HDHP and the PPO annual family rates to her HSA.

    Year Three

    Employee and Family                 Eligible Expenses   Amount Applied to      Paid by HDHP         Paid from HSA
                                                            Deductible             (in-network)

    Beginning HSA balance                                                                                    $2,516

    Resources’ contributions                                                                                +$1,800

    Sandy’s contributions                                                                                   +$1,448

    Annual physical (2)                      $180                   $0                 $180                      $0

    Well child exam (2)                      $180                   $0                 $180                      $0

    Primary care physician visits (4)        $360                 $360                   $0                  −$360

    Specialist visits (4)                    $720                 $720                   $0                  −$720

    Prescriptions (8)                        $480                 $480                   $0                  −$480

    Remaining HSA account balance                                                                            $4,204


After three years Sandy has $4,204 in her HSA (not accounting for investment earnings and expenses).




2
                                                         Example 2 - Ricardo, age 56, is unmarried. He was
                                                         diagnosed with diabetes and high cholesterol five years
                                                         ago, but both are under control. Ricardo would like to save
                                                         as much as possible for health care expenses after retirement.
                                                         He makes the maximum contribution ($2,150) to his HSA.
                                                         In addition, because Ricardo is 56 he can contribute an
                                                         additional $1,000 to his HSA each year under IRS guidelines.
                                                         Here is how the High Deductible Health Plan and his HSA
                                                         could work for him.


 Year One

 Employee-only                       Eligible Expenses    Amount Applied to     Paid by HDHP      Paid from HSA
                                                          Deductible            (in-network)

 Beginning HSA balance                                                                                 $0

 Resources’ contributions                                                                           +$900

 Ricardo’s contributions                                                                          +$3,150

 Annual physical (1)                          $90                   $0                $90              $0

 Primary care physician visits (3)           $270                 $270                 $0           −$270

 Prescriptions (24)                        $1,440               $1,230               $189         −$1,251 (includes $21
                                                                                                  coinsurance payment)

 Remaining HSA account balance                                                                     $2,529



In the second year, Ricardo’s diabetes and cholesterol remain under control. Ricardo continues to contribute the
maximum to his HSA.

 Year Two

 Employee-only                       Eligible Expenses    Amount Applied to     Paid by HDHP      Paid from HSA
                                                          Deductible            (in-network)

 Beginning HSA balance                                                                             $2,529

 Resources’ contributions                                                                           +$900

 Ricardo’s contributions                                                                          +$3,150

 Annual physical (1)                         $90                    $0                $90              $0

 Primary care physician visits (3)          $270                  $270                 $0           −$270

 Prescriptions (24)                       $1,440                $1,230               $189         −$1,251 (includes $21
                                                                                                  coinsurance payment)

 Remaining HSA account balance                                                                     $5,058




                                                                                                                          3
In the third year, while his diabetes and cholesterol are under control, Ricardo is hospitalized with appendicitis late in the
year. He continues to contribute the maximum to his HSA.

 Year Three

 Employee-only                         Eligible Expenses    Amount Applied to      Paid by HDHP      Paid from HSA
                                                            Deductible             (in-network)

 Beginning HSA balance                                                                                $5,058

 Resources’ contributions                                                                             +$900

 Ricardo’s contributions                                                                             +$3,150

 Annual physical (1)                            $90                    $0                  $90            $0

 Primary care physician visits (3)             $270                 $270                     $0        −$270

 Prescriptions (24)                          $1,440                $1,230                $189        −$1,251 (includes $21
                                                                                                     coinsurance payment)

 Hospitalization                            $20,000                    $0              $18,000       −$2,000

 Specialist visits (2)                         $360                    $0                $324           −$36

 Remaining HSA account balance                                                                        $5,551


After three years, despite the hospitalization, Ricardo has accumulated $5,551 in his HSA (not accounting for investment
earnings and expenses) for post-retirement health care expenses.




                                                           Example 3 - Sarah, age 29, is single and leads an
                                                           active and healthy lifestyle. She is thinking about laser
                                                           eye surgery. She chooses to contribute $484 (the difference
                                                           between the HDHP and the PPO annual individual rates) to
                                                           her HSA. Here is how the High Deductible Health Plan and
                                                           her HSA could work for Sarah.




 Year One

 Employee-only                         Eligible Expenses    Amount Applied to      Paid by HDHP          Paid from HSA
                                                            Deductible             (in-network)

 Beginning HSA balance                                                                                            $0

 Resources’ contributions                                                                                      +$900

 Sarah’s contributions                                                                                         +$484

 Annual physical (1)                         $90                     $0                $90                        $0

 Primary care physician visits (1)           $90                    $90                 $0                      −$90

 Prescriptions (1)                           $60                    $60                 $0                      −$60

 Remaining HSA account balance                                                                                 $1,234

4
In the second year, Sarah still leads an active and healthy lifestyle. She continues to contribute the difference between the
HDHP and the PPO annual individual rates to her HSA.

 Year Two

 Employee-only                           Eligible Expenses       Amount Applied to        Paid by HDHP         Paid from HSA
                                                                 Deductible               (in-network)

 Beginning HSA balance                                                                                            $1,234

 Resources’ contributions                                                                                          +$900

 Sarah’s contributions                                                                                             +$484

 Annual physical (1)                             $90                       $0                   $90                   $0

 Primary care physician visits (1)               $90                      $90                    $0                 −$90

 Prescriptions (1)                               $60                      $60                    $0                 −$60

 Remaining HSA account balance                                                                                    $2,468



In the third year, Sarah decides to have laser eye surgery. It’s not covered under the HDHP, so she’ll use her HSA to pay
for this expense. She continues to contribute the difference between the HDHP and the PPO annual individual rates to
her HSA.

 Year Three

 Employee-only                           Eligible Expenses       Amount Applied to        Paid by HDHP         Paid from HSA
                                                                 Deductible               (in-network)

 Beginning HSA balance                                                                                            $2,468

 Resources’ contributions                                                                                          +$900

 Sarah’s contributions                                                                                             +$484

 Annual physical (1)                               $90                     $0                   $90                   $0

 Primary care physician visits (1)                 $90                    $90                    $0                 −$90

 Prescriptions (1)                                 $60                    $60                    $0                 −$60

 Laser eye surgery                              $3,000                     $0              Not covered           −$3,000

 Remaining HSA account balance                                                                                      $702


After her laser eye surgery Sarah has $702 in her HSA that will rollover to the next year.




                            Resources reserves the right to amend, suspend or terminate the Plan at anytime.



                                                                                                                                5