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Frequently Asked Questions

CONSUMER DRIVEN HEALTH PLAN (CDHP)

What is a Consumer Driven Health Plan (CDHP)?

The CDHP is a high deductible health plan that works in conjunction with a Health Savings Account or Health Reimbursement Arrangement and a wellness program. The plan has a $1,900 individual deductible (participant only tier) and a $3,800 family deductible (any tier with two or more members; family deductible includes a $2,500 individual family member deductible). To maximize benefits under the CDHP, PEBP will continue to offer the preferred provider organization (PPO) network. The combination of medical and pharmacy benefits are subject to the annual deductible and copayments do not apply. Generally, after meeting the combined medical and prescription drug annual deductible amount, the plan will pay 75% coinsurance when using contracted PPO providers.

What is the annual maximum out-of-pocket for the CDHP?

The annual out-of-pocket maximum is $3,900 for an individual with no covered dependents and $7,800 for a family (all other tiers). Once the annual maximum out-of-pocket has been met, the plan will pay 100% of covered medical and pharmacy expenses when using contracted providers.

What expenses apply to the annual maximum out-of-pocket?
Deductible and coinsurance amounts accumulate toward the annual out-of-pocket maximum.

Would the annual family maximum out-of-pocket have to be met by more than one person?
The $7,800 family maximum out-of-pocket may be met by one individual or through a combination of claims incurred by all family members.


HEALTH SAVINGS ACCOUNT (HSA)

What is a Health Savings Account (HSA)?

HSAs are tax-exempt accounts that are coupled with high deductible health plans. They are employee-owned interest bearing/investment accounts that are used to pay qualified health care expenses on a pre-tax basis. HSA funds carryover from year-to-year and belong to the employee. HSA contributions are reported by your employer to you and the IRS on form W-2 (box 12 using code W). Contributions and distributions from the HSA must be reported on annual tax returns using form 8889 (see IRS Publication 969).

IRS requires identification on behalf of HSA account owners. In some cases, employees will be required to provide additional identifying information. Failure to provide identity information within a specified timeframe will automatically convert the HSA funds to an HRA. Questions regarding requests for identity should be directed to HealthSCOPE Benefits at 1-888-763-8232.

Are there eligibility requirements to establish an HSA?

Yes, to establish an HSA, you must be an active employee covered under a high deductible health plan. You cannot have secondary coverage, unless that other coverage is also a high deductible health plan or covers a specific disease state (such as cancer insurance) or only reimburses for expenses after you have met the deductible. If any of the following apply, you may not establish or contribute to the HSA:

  • You are covered under other medical insurance coverage unless that medical insurance coverage: (1) is also a High Deductible Health Plan as defined by the IRS; (2) covers a specific disease state (such as cancer insurance); or (3) only reimburses for expenses after you have met the deductible

  • You are enrolled in Medicare, Tricare, Tribal or similar coverage

  • You cannot be claimed as a dependent on someone else’s tax return unless you are married filing jointly

  • You or your spouse has a Medical Flexible Spending Account (excludes Dependent Care or Limited Use Flexible Spending Accounts)

  • Your spouse has an HRA that can be used to pay for your medical expenses

  • You are on COBRA

  • You are retired

Can HSA monies be used to pay for qualifying expenses of a dependent?

You may use the HSA funds to pay for the qualified medical expenses of a spouse or dependent child (as defined by the IRS), regardless of whether the spouse or dependent is covered by PEBP. HSA funds may not be used for medical expenses for a person who does not meet the IRS definition of “dependent,” including many domestic partners, children of domestic partners and older children who cannot be claimed on your tax return, regardless of whether PEBP provides coverage for the child. See IRS Publication 502 for more details regarding qualified children.

What happens to the HSA funds if they are not used by the end of the year, do they revert back to PEBP? Unused HSA funds are owned by the employee and will not revert back to PEBP at any time.

What happens to the HSA when a member retires or changes to the HMO plan during Open Enrollment?

The member keeps the money. That is one of the many advantages of the HSA. The account belongs to the employee. Many employees choose to build HSA funds over time to use for healthcare expenses in retirement. Others choose to use their HSA for current healthcare costs. It's up to the employee to decide what works best for them.


Will employees receive a 1099 for tax filing?

Employees will receive Form 1099-SA with information on distributions and Form 1099-INT with information on interest earnings. These forms are provided to the employee in January each year.

Who can make contributions to the HSA?

Employees have the option to self-contribute to the HSA through direct payroll deduction or by sending a check to HealthSCOPE Benefits for deposit. If sending a check, the HSA Contribution Form must be completed and sent along with the check to HealthSCOPE Benefits (HSB). The form may be downloaded from the HSB website at www.healthscopebenefits.com.

*  Click HSA/HRA Account Status

*  Login to the Member Dashboard

*  Click view HSA/HRA information under Quick Links

*  Click the Forms tab and select the appropriate form

Can employees make a one-time deposit to their HSA instead of having payroll deductions?

Yes. Employees have the option of making a one-time deposit by sending a check to HealthSCOPE Benefits for deposit into the HSA.


HEALTH REIMBURSEMENT ARRANGEMENT


What is a Health Reimbursement Arrangement?

HRAs are PEBP-owned pass-through accounts established on behalf of eligible CDHP primary participants. HRA funds may be used to pay for qualified health care expenses. The balance of HRA funds carry over from year-to-year; however, the Board may establish a carry over limit in future plan years. HRA balances revert to PEBP when the participant is no longer eligible for the HRA. Contributions and distributions are not reported to the IRS.

Who is eligible for the HRA?

Employees who enrolled in the CDHP and who are not eligible for the HSA receive the HRA. Retirees enrolled in the CDHP receive the HRA.

What are qualified medical expenses?

Qualified medical expenses are amounts paid for medical care as defined by the IRS (provided reimbursements for such paid amounts are not received from any other source, including insurance.) Qualified medical expenses include payment of deductibles, coinsurance, dental, and vision costs incurred by the participant, a covered spouse or any other dependent claimed on the primary participant's annual tax return (see IRS Publication 502). Participants on the CDHP may not use HRA funds to pay premiums.



PEBP HSA/HRA CONTRIBUTIONS

How much will PEBP contribute to my HSA/HRA?

PEBP will contribute $700 into each primary participants HSA account plus an additional $200 for each covered dependent to a maximum of three dependents. Additionally, those employees who are covered under the Consumer Driven Health Plan effective July 1, 2013 will also receive a one time supplemental contribution of $697 (primary participant) and $215 for each covered dependent to a maximum of three dependents.

How much can I contribute annually to my HSA?

The amount you or any other person can contribute to your HSA depends on the type of CDHP cover you have (Individual or Family), your age, and the date you become eligible, and the date you cease to be an eligible individual. The HSA contribution limits are set by the IRS and for 2013, the maximum contribution limits are $3,250 for an Individual and $6,450 for a Family (two or more members). Eligible individuals who are age 55 or older on December 31st may contribute an additional $1,000. Note: PEBP contributions are counted toward these limits. Caution: As mentioned earlier, the maximum contribution limits are subject to an individual's eligibility based on the last month rule and testing period as discussed below. For more information, refer to IRS Publication 969, or contact HealthSCOPE Benefits at 888-763-8232.



QUALIFYING FOR AN HSA

To be an eligible individual and qualify for an HSA, you must meet the following requirements:

  • You must be an active employee covered under the CDHP

  • You have no other coverage unless the other coverage is also a high deductible health plan with a minimum deductible for self-only coverage in the amount of $1,250 or Family coverage with a minimum deductible of $2,500 (and meets the IRS definition of a high deductible health plan).

  • You are not enrolled in Medicare, Tricare or similar coverage


  • You are not claimed as a dependent on another person's tax return


  • You are not covered under a Medical FSA, HRA or your spouse has a Medical Flexible Spending Account that may be used to pay for your health care expenses

Eligible Individual

To be eligible contribution to your HSA you must be covered under the CDHP and have no other health coverage except coverage permitted by the IRS. You cannot be enrolled in Medicare or be claimed as a dependent on another person's tax return. You must be, or be considered, an eligible individual on the first day of a month to make a contribution for that month.

What is the HSA last-month rule?

If you are an eligible individual on the first day of the last month of your tax year (December 1), you are considered to be an eligible individual for the entire year.

What is the HSA testing period?

If an employee is eligible to contribute to the HSA on the first day of the last month of the tax year (generally December 1), the employee may contribute up to the annual maximum if the employee is eligible to contribute to the HSA through the end of the following year (the testing period). If the employee is not eligible during the entirety of the testing period, any amount contributed to the HSA in excess of the prorated annual maximum will be treated as taxable income in the following tax year and will be subject to a penalty (see IRS Publication 969). The testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month (for example, December 1, 2012 - December 31, 2013). If you fail to remain an eligible individual during this period, other than because of death or becoming disabled, you will have to include in income the total contributions made that would not have been made except for the last month rule. You include this amount in income in the year in which you fail to be an eligible individual. This amount is also subject to a 10% additional tax.

How do I change my HSA contribution?

Change your HSA election by using one of the following options:

  1. Log on to the HSA section of the HealthSCOPE Benefits website and select "Change an Election."

  2. Call HealthSCOPE Benefits at 888-763-8232 to request a form to change the election.

  3. Contact HealthSCOPE Benefits via email at pebphsahra@healthscopebenefits.comand request a form to change the election.

Do HMO participants qualify for the HSA or HRA?

HSAs and HRAs are only offered to PEBP CDHP participants.
Will the IRS allow employees to enroll in a Health Care Flexible Spending Account (FSA) if they also have a HSA?
IRS provisions do not allow an employee to enroll in the regular health care FSA. However, IRS provisions will allow employees with an HSA to enroll in a Limited Purpose FSA for dental and vision care expenses only.



HSA DISTRIBUTIONS

Can the HSA be used for medical expenses incurred before establishing the HSA? For example, expenses incurred for an employee while he or she is covered under the HMO plan, then later changes to the CDHP.

The HSA can only be used for expenses incurred on or after the date the HSA was established.




HSA DEBIT CARD

What can the debit card be used for?


The IRS regulates what is considered an eligible expense. According to IRS Publication 502, medical expenses are the cost of diagnosis, cure, mitigation, treatment, prevention of disease, and the costs for treatments affecting any part or function of the body. Medical expenses incurred primarily to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health, such as vitamins or vacation. Examples of eligible medical expenses include:

  • Payments for legal medical services rendered by physicians, surgeons, dentists and other medical practitioners


  • Cost of medically necessary equipment an supplies


  • Diagnostic devices

  • Specific information can be found at HealthSCOPE Benefits. Information can also be found in IRS Publications 969 and 502.

HEALTH REIMBURSEMENT ARRANGEMENT FOR ELIGIBLE MEDICARE EXCHANGE ENROLLEES

Who is eligible for the Medicare Exchange HRA?

Eligible retirees covered through the Medicare Exchange receive a Medicare Exchange HRA. For more information, view the Summary Plan Description for HRA for Medicare Exchange Retirees.

What qualifying health care expenses are eligible for reimbursement through the Medicare Exchange HRA?

Qualified medical expenses are amounts paid for medical care as defined by the IRS (provided reimbursements for such paid amounts are not received from any other source, including insurance.) Qualified medical expenses include payment of deductibles, coinsurance, dental, and vision costs incurred by the participant, their covered spouse and/or dependent children. The Medicare Exchange HRA may also be used for reimbursement of medical, dental and pharmacy premiums (see IRS Publication 502).


Medicare Exchange HRA Years of Service Contribution

For Plan Year 2013, retiree enrolled in a medical plan through the Extend Health receive a monthly contribution of $10 for each year of service beginning with five years (excluding purchased service) to a maximum of $200 per month. However, those who retired on or before December 31, 1993 receive a flat $150 per month contribution. Retirees who were hired by their last public employer on or after January 1, 2010 with fewer than15 years of service are not eligible for the Exchange-HRA. Dependents and survivors are not eligible for the Exchange-HRA.



CONSUMER DRIVEN HEALTH PLAN (CDHP) - WELLNESS BENEFIT

Will the CDHP cover wellness/preventive care?

The CDHP covers eligible wellness/preventive care services at the 100% benefit level when using in-network providers.

Are my covered dependents also eligible for wellness/preventive care benefits?

Covered dependents CDHP are eligible for wellness/preventive care benefits as recommended by the Centers for Disease Control and Prevention (CDC). For HMO participants, contact the HMO plan for information on their associated wellness guidelines and programs.

Whose responsibility is it to ensure the provider bills the wellness benefit correctly?

The physician makes the determination regarding the purpose of the visit (e.g., was the visit for screening purposes only or was the visit a follow up for a known medical condition?). However, it is the patient’s responsibility to inform their physician and the physician’s billing staff about the wellness benefits.

How are wellness benefits covered when there are no in-network providers within 50 miles of my residence?

There is a 50 mile rule that would apply for wellness services which allows a participant to receive eligible wellness services at the 100% benefit level, subject to the Plan's usual and customary allowance. for information regarding the 50 mile rule and the usual and customary allowance contact HealthSCOPE Benefits at 888-763-8232.


Are healthcare services related to a previous health condition covered under the wellness benefit?

Office visits and other medical services such as laboratory and radiology completed in conjunction with a known medical condition are subject to the annual deductible, coinsurance and other plan requirements as described in the Plan Year 2014 Master Plan Document.For the majority of individuals with chronic conditions such as diabetes, hypertension, high cholesterol, etc. the physician's office visit and related ancillary services will not be covered under the CDHP wellness benefit and will be subject to deductible and coinsurance. Generally, once you receive a diagnose with a chronic medical condition, your medical treatment plan continues during your lifetime and is no longer considered preventive or wellness. For HMO participants, contact your plan for their associated wellness guidelines.

Are colonoscopies covered under the wellness benefit?

Colonoscopies performed for screening purposes in accordance with CDC guidelines are covered under the CDHP wellness benefit. However, virtual colonoscopies are not covered unless deemed medically necessary by HealthSCOPE Benefits. HMO participants will need to contact their HMO carrier for their wellness benefit provisions.

Will the CDHP cover vaccinations for overseas travel?

Generally, vaccinations required for overseas travel are covered under the CDHP wellness benefit. However, most of the vaccines required for overseas travel are not available through a primary care physician. Contact your local health department for information about the various vaccines they offer. Local health departments will not submit billing claims to HealthSCOPE Benefits; thus, the member has the responsibility of submitting a paper claim (accompanied by an itemized receipt indicating the name and location of the entity who administered the vaccines, the vaccine type, dose and cost for each immunization and proof of your payment) for reimbursement.

Are routine laboratory tests covered under the CDHP?

Routine lab tests associated with wellness services as defined by the CDC are covered under the wellness benefit if performed at a free-standing laboratory facility. Lab tests not associated with wellness services are subject to deductible and coinsurance. Please note lab tests provided in a hospital setting are not covered--except when lab tests are performed for pre-admission testing, inpatient admission, and urgent or emergency care. Exceptions to this provision applies for participants residing in rural areas where there are no free-standing laboratories within 50 miles; thus, requiring lab services to be performed in a hospital setting.

Is there a cost differential between using an outpatient hospital lab verses a free-standing lab such as Lab Corp or Quest?

Generally, hospitals charge substantially more for these services than stand-alone laboratories. Some physicians may refer a patient to the hospital for lab testing; however, to reduce out-of-pocket costs, the member should request a referral to a stand-alone laboratory.



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