Employee Benefits Insurance Plans

Presented by:O’Neill Benefits

Group Brokerage

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Plan Administrator

• Medical Insurance- UNITED HEALTHCARE- Open Enrollment May 1, 2006

Dependent Enrollment

Effective May 1, 2006, employees may enroll dependent children through the age of 25 with no student status verification

• Dependent children are eligible until the end of the month of their 25th birthday

• Dependent children must be unmarried and financially dependent or living at home

•    If you had waived coverage for yourself or your dependents, you may enroll now with no medical screening.

•    You may switch your current plan selection with United Health Care – you may enroll in the HSA plan or stay in the current plan USJ.

OPEN ENROLLMENT

INITIAL NOTICE REGARDING SPECIAL ENROLLMENT IN THE GROUP HEALTH PLAN

Date: April 1, 2006 To: Employee From: Plan Administrator Re: Special Enrollment Rights

The recent Federal legislation passed as the Health Insurance Portability and Accountability Act, commonly referred to as HIPAA, requires that we notify you about a very important provision in the plan that may, in certain instances, allow you or your dependents special enrollment rights should you decline enrollment when initially eligible.

Rule #1: If you are declining enrollment for yourself or your dependents (including your spouse) because of other health insurance coverage, you may in the future be able to enroll yourself or your dependents in this plan, provided that you request enrollment within 30 days after your other coverage ends.

Rule #2: In addition, if you have a new dependent as a result of marriage, birth, adoption, or placement for adoption, you may be able to enroll yourself and your dependents, provided that you request enrollment within 30 days after the marriage, birth adoption, or placement for adoption.

CRISIS?

Principal Premium 1998

39 employees: $180,839

UHC USJ Premium 2006

31 employees: $366,001

• The employer pays for 100% of the HD-D (base plan) for single coverage and dependent coverage (spouse and/or children). The employer will also contribute $750 of the plan deductible to the employee’s Health Savings Account for the base plan.

• If the employee selects the US-J (buy-up) plan, the employee must contribute towards the cost for single and dependent coverage.

What is a dual option?You select one plan between two different medical it plan option.

Plan US-J ($1,500/$4,500 deductible) BUY-UP Plan

Employee only: $56.06 / month

Employee + spouse: $111.81 / month

Employee + child/children: $94.93 / month

Employee + family: $158.68/month

What are the costs to the employee for the Buy Up plan?

Deductible Carry-forward

• Deductibles incurred in calendar year 2006 will be credited to either plan you enroll in.

Plan HD-D (HSA) Benefit Summary

100% 80%$2,000/$4,000 $4,000/$8,000

Deductible Deductible+ $4000 / Deductible + $8000

Deductible / No charge

Deductible + 20% / Not covered

Deductible Deductible + 20%Deductible Deductible

Deductible then $10/$30/$50

Deductible + 20%

VISION BENEFIT Deductible Deductible + 20%CHIROPRACTIC BENEFIT

(24 visits/year)Deductible Deductible + 20%

NETWORK UHC PPO Any Doctor

PRESCRIPTION DRUGS

MAX OUT OF POCKET (IND/FAM)

OFFICE VISIT COPAY / PREVENTIVE

HOSPITAL ADMISSIONEMERGENCY ROOM COPAY

COINSURANCE PERCENTAGEDEDUCTIBLE (IND/FAM)

Plan US-J (Buy up )Benefit Summary

BENEFITS DESCRIPTION IN NETWORK OUT NETWORK80% 60%

$1,500/$4,500 $3,000/$9,000Deductible+ $2000 / Deductible + $2500

Deductible+ $4000 / Deductible + $5000

$25 / $25Deductible + 40% /

Not coveredDeductible + 20% Deductible + 40%

$125 $125 $100 deductible then$10/$30/$50

Not covered

VISION BENEFIT $25 Eye exam Not coveredCHIROPRACTIC BENEFIT

(24 visits/year)Deductible + 20% Deductible + 40%

NETWORK UHC PPO Any Doctor

PRESCRIPTION DRUGS

MAX OUT OF POCKET (IND/FAM)

OFFICE VISIT COPAY / PREVENTIVE

HOSPITAL ADMISSIONEMERGENCY ROOM COPAY

COINSURANCE PERCENTAGEDEDUCTIBLE (IND/FAM)

United Healthcare Websites

• http://www.uhc.com/• www.myuhc.com• www.unitedhealthwellness.com

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Confidential property of UnitedHealthcare. Do not distribute or reproduce without the express permission of UnitedHealthcare.

xx

Distinguishing Features: Balanced approach to total well-being (more than physical health) “Wellness-only” focus for distinct appeal when compared to most

health-related Web sites

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Confidential property of UnitedHealthcare. Do not distribute or reproduce without the express permission of UnitedHealthcare.

Distinguishing Features: Balanced approach to total well-being (more than physical health) “Wellness-only” focus for distinct appeal when compared to most

health-related Web sites

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Confidential property of UnitedHealthcare. Do not distribute or reproduce without the express permission of UnitedHealthcare.

The Uncovered “Spend”

• Savings on out of pocket expenses for services traditionally not covered by health insurance

• Web-enabled consumer information and decision-making tools

• Concierge services • No referrals or claim forms

• Dental• Vision• Long-Term Care• Alternative Care• Wellness• Infertility• Hearing

You have purchasing power for services not covered by a

insurance plan – which reduce your overall out of pocket

expenses.

The average family spends roughly $675 a year on non-covered health care services.

4. Confirm rate & print confirmation

1. Search for provider by name, location, or specialty

2. Compare provider rates

3. View provider details and make selection

HealthAllies Easy to Use

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UnitedHealth Wellness Portfolio

Total Well-Being Program –myRenewellSM

Helps individuals achieve a healthier and balanced lifestyle

Online, personalized wellness tools and educational information

Discounted wellness products and services

Available through unitedhealthwellness.com

Distinguishing Features:

Balanced approach to total well-being (more than physical health)

“Wellness-only” focus for distinct appeal when compared to most health-related Web sites

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UnitedHealth Wellness Portfolio

Total Well-Being Program –myRenewellSM

Helps individuals achieve a healthier and balanced lifestyle

Online, personalized wellness tools and educational information

Discounted wellness products and services

Available through unitedhealthwellness.com

Distinguishing Features:

Balanced approach to total well-being (more than physical health)

“Wellness-only” focus for distinct appeal when compared to most health-related Web sites

Distinguishing Features: Balanced approach to total well-being (more than physical health) “Wellness-only” focus for distinct appeal when compared to most

health-related Web sites 17

UNITEDHEALTH WELLNESS

Employees will receive a mailing near your group’s renewal effective date, which includes: UnitedHealth Wellness ID Card

Brochure with detailed information on all wellness programs and services to help your employees stay healthy and learn about total well-being

17

UNITEDHEALTH WELLNESS

Employees will receive a mailing near your group’s renewal effective date, which includes: UnitedHealth Wellness ID Card

Brochure with detailed information on all wellness programs and services to help your employees stay healthy and learn about total well-being

HSA Overview

• HSA is money put in an account owned by an individual to pay for future medical expenses

• Must be used in conjunction with “High Deductible Health Plan” (HDHP)– Insurance that does not cover first dollar

medical expenses (except for prevention)

Advantages of HSAs

• HSA accounts encourage savings for future medical expenses– When employer-sponsored coverage is lost during

periods of unemployment• COBRA continuation coverage• other coverage

– Insurance coverage or medical expenses after retirement (before Medicare eligibility)

– Long-term care expenses– Out-of-pocket expenses for Medicare– Non-covered services under future coverage

Advantages of HSAs

• Accounts are owned by the individual (not an employer)– Individual decides:

• How much to contribute• How much to use for medical expenses• Which medical expenses to pay from the account• Whether to pay for medical expenses from the

account or save the account for future use• Which company will hold the account• What type of investments to grow account

Advantages of HSAs

• Accounts are completely portable, regardless of:– Whether the individual is employed or not– Which employer the individual works for– Which state an individuals moves to– Age or marital status changes– Future medical coverage

Advantages of HSAs

• No “use it or lose it rules” like Flexible Spending Arrangements (FSAs)– Unspent balances in accounts remain in the

account and can grow through investment earnings

– Encourages account holders to spend their funds more wisely on their medical care

– Encourages account holders to shop around for the best value for the health care dollars

Advantages of HSAs

• Accounts can grow through investment earnings– Many different investment options could be

pursued– Individual chooses investment option that best

meets their needs

• HDHP premiums are cheaper than health insurance with traditional deductibles

Who Is Eligible for HSAs?

– Any individual that:– Is covered by a HDHP– Is not covered by other health

insurance• does not apply to specific injury insurance and

accident, disability, dental care, vision care, long-term care

– Is not eligible for Medicare– Can’t be claimed as a dependent on

someone else’s tax return

What Is a “High Deductible Health Plan” (HDHP)?

• Health insurance plan with minimum deductible of:– $1,000 (self-only coverage)– $2,000 (family coverage)

• Annual out-of-pocket (including deductibles and co-pays) does not exceed:– $5,100 (self-only coverage)– $10,200 (family coverage)

• HDHPs can have:– no deductible for preventive care– higher out-of-pocket (copays & coinsurance) for non-network services

HSA Contribution Rules

• Contribution to HSA can be made by either the employer or the individual, or both– If made by the individual, it is an “above-the-

line” deduction– If made by the employer, it is not taxable to

the employee (excluded from income)– Can be made by others on behalf of

individual and deducted by the individual

• All contributions are aggregated

The W.W. Reynolds Companies is making a one time contribution of $750 in a lump sum either to:

Employee’s HSA Trust Account ORas ordinary income if Plan US J is selected

Employer Contribution

Employees of The W.W. Reynolds Companies can contribute up to the individual or family maximum by depositing funds directly into their Trust account.Tax forms now have a line item for HSA contributions and are deducted before tax is calculated.

Employee Contribution

HSA Contribution Rules

• Maximum amount that can be contributed to an HSA (and deducted):– Amount of High Deductible for 12 month plansHOWEVER– For 2006 the amount is pro-rated for the year– Individual: Maximum contribution is: $1,333.33– Family: Maximum contribution is: $2666.66

HSA Contribution Rules

• For individuals age 55 and older, additional “catch-up” contributions to HSA allowed– 2005 - $600– 2006 - $700– 2007 - $800– 2008 - $900– 2009 and after - $1,000

• Contributions must stop once an individual is eligible for Medicare

HSA Distributions

• HSA funds can be used to pay for eligible expenses incurred

• ON OR AFTER the date the Trust account is established.

HSA Distributions

• Distributions are tax-free if taken for “qualified medical expenses”– Now includes over-the-counter drugs

• Can ALSO pay for other health insurance:– COBRA coverage– Qualified long-term care insurance– Health plan coverage while receiving

unemployment compensation– For individuals eligible for Medicare:

• Medicare (Part A, Part B, Medicare+Choice)• employee share of premiums for employer-based

coverage• Cannot pay Medigap premiums

HSA Distributions

• Distributions are tax-free if taken for:– person covered by the high deductible– spouse of the individual– any dependent of the individual

• Spouse and dependents don’t need to be covered by the HDHP

• If not used for qualified medical expenses, then amount is included in income

• 10% additional tax if taken for non-medical expenses, except when taken after:– Individual dies or becomes disabled– Individual is eligible for Medicare

HSA Distributions

• HSA custodian (Trust account) must report all distributions – but is not required to check them for eligibility

• Should the HSA participant keep receipts?– YES! Need to prove that deductible was met– Not all medical expenses paid out of the HSA have

to be charged against the deductible (e.g. prescription sunglasses)

Preventive Covered at 100% on HAS plan No co-pay or deductible

• Preventive Definition• Periodic Health Evaluations• Well baby and/or well-child• Immunization

Funding (Deposit) Process

1. Fund HSA bank account via payroll deductions, or direct deposit.

2. Obtain health services that are subject to the deductible after using myuhc.com to determine lowest cost, best treatment options, etc.

3. Receive EOB from claim system, or view claim on-line at myuhc.com stating consumer liability.

4. Use debit card or check to pay the physician directly from the HSA bank account or use you disposable income to save today for tomorrow’s expenses

5. Receive monthly bank statement detailing deposits and withdrawals or view on-line on bank web-site.

6. End of the year consumer will receive tax forms (direct deposits outside of payroll) and will see interest, but they do not have to pay taxes on that interest

7. Enjoy savings and establish a more secure retirement.

Identification and Debit Cards

Healthcare Account Card (ID or Eligibility card)

Can be used at any Mastercard terminal Used to obtain eligibility and copay

information within 10 seconds Ability to send optional fax back with

enhanced information HIPAA compliant 270/271 transactions

Health Savings Account Debit Card Effective 1/1/05 Works like any checking account debit

card - use at ATM or any merchant (part of the Cirrus network)

Banking Services

• Banking services are through Exante Bank, a UnitedHealth Group owned affiliate

• Account is interest bearing• Access to account is via a Mastercard

debit card or checkbook• On-line bill pay• Bank arrangement:

• $5 per account for set up • $3 PEPM Banking Fees charged to employee

bank account• Other miscellaneous consumer banking fees

apply

O’Neill Benefits Group Brokerage

•Broker–Pat O’Neill

•Customer Service– (303) 443-9929

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