Health Savings Accounts HSA

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Health Savings Accounts(HSA)

• Joan Loew

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An HSA is an individual savings account
established to pay for qualified medical expenses
incurred with a High Deductible Health
Plan.Premium savings can help fund the HSA
accounts. Employee can use HSA dollars for
current expensesor save the dollars for future
medical costs
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HSA Advantages

• Create a Win-Win Health Care Solution for
  Employees
• Share the savings from switching to a HDHP with
  the employee
• Health Savings Account fees paid by Insurance
  Trust
• Educate employees

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HSA Advantages

• Contributions are not included in the employees
  wages and therefore are not subject to social
  security, medicare, federal and state income tax.
  (District savings of 7.65 for FICA)
• Unused balance can be rolled from year to year
  (no use it or lose it rule)

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No one ever washes a rental car. Theres a lot
of wisdom in that statement. See when you own
something you care about it.President Bush, Oct
20, 2004 North Iowa Fairgrounds, Mason City, Iowa
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Goals

• Containing the cost of insurance
• Producing better consumers of health care
• Changing behaviors
• Changing claim experience
• Financially rewarding employees for making
  conservative spending decisions

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Current Plan Plan A Medical Insurance

• 100 deductible, 200 family deductible
• 500 out of pocket, 600 family max
• No incentive not to obtain medical care
• Entitlement

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How Did We Get Here?

• In the past, Certified and Support staff entitled
  to Plan A single coverage insurance per master
  contract negotiations
• January 1, 2005 Twelve employees on family
  coverage voluntarily change to HDHP, funding
  their HSA with premium savings
• July 1, 2005 Certified and Support Unions agree
  to optional, HDHP with funded HSA

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How Did We Get Here?

• 2003, Administrators applied their package
  increase to insurance coverage in order to obtain
  full family coverage under Plan A.
• 2005, New HSA plans made a High Deductible Health
  Plan (HDHP) more attractive to both employers and
  employees.

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Available Options

• Leave Adminstrators on Plan A
• Move to Plan I and fully fund a HSA with the
  savings from premiums
• Certified and Support staff have already approved
  the option of moving to Plan I with a funded
  HSA account

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Health Savings Account ExampleFamily Coverage

• Current Plan
• 600 Max out of pocket
• 1419.00 Premium

• HDHP HSA
• 4600 Max out of pocket
• 760.00 Premium

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Family Premium savings1419 - 760
659/month659 X 12 months 7908HSA maximum
4600Savings to District 3308
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Single Coverage Premium savings553 - 311
242/month242 X 12 months 2904HSA maximum
2300Savings to District 604
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Recommendation

• Move Adminstrators to Plan I HDHP with 4600
  deductible
• The District will save 3308 per administrator by
  moving to Plan I and fully funding the Health
  Savings Account
• Questions?

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Recommendation

• Approve the recommendation as presented