Midland Memorial Hospital2014 Employee Health Benefits

Medical Plan ChangesSingle plan offering: a High Deductible

Health Plan (HDHP) with a Health Savings Account (HSA)

Spouses excluded if eligible for employer-sponsored coverage, Medicare, or Tricare

No office visit or pharmacy co-paysEmployee pays all costs up to deductible

◦100% coverage for MMH services after deductible, excluding O/P Pharmacy and bariatrics

Why Big Changes?Logical progression to more employee

responsibility.Projected cost increase of over $2M:

◦ ACA-related plan design and tax increase: $373k

◦ Stop-loss premium increase (large claims): $62k

◦ Increased Headcount:$564K

Relative value of our plan and risk of adverse selection (spouses)

SpousesWorking spouses who are eligible for

coverage (medical and/or dental) under their employers’ plans will no longer be covered on the corresponding MMH plan.

Spouses who are eligible for Medicare part A or B or Tricare will be ineligible for MMH medical plan.◦May be eligible for dental

Employees with spouses that are eligible to stay on the plan, will complete an affidavit stating no other coverage.

Who is eligible to participate in an HSA?

Because HSA’s have special tax advantages, the IRS defines specific rules on

participation. To be eligible to contribute pre-tax funds toward a Health Savings Account, the IRS requires that individuals:

Must be enrolled in a qualified High Deductible Health Plan Cannot have any other health coverage

Not covered by spouse’s medical or pharmacy plan

Not covered by Tricare Not covered through Medicare Part A or Part B

Cannot be claimed as a dependent on anotherperson’s tax return

Health Savings AccountHealth plan must have minimum

$1,250 annual deductible.Able to contribute up to $7,550/year

in pre-tax contributions◦$3,300 individual◦$6,550 family◦$1,000 over 55 catch-up

Employer will no longer offer FSA for medical, dental and vision expenses.◦Dependent Care FSA remains available.

HSA - Employer FundingEmployees with an hourly rate of pay of $0-$24.03

will receive $500 seed money into their HSA

Employees with an hourly rate of pay of $24.04-$48.07 will receive $250 seed money into their HSA

Employees with an hourly rate of pay over $48.07 will receive $0 seed money

Seed money will be placed into HSA account on behalf of employee at the beginning of the 2014 Plan Year

HSA Administered by ADPEmployee is the holder of the account

and a debit card will be attached to the accountWelcome Package will be mailed to the

account holder, which will include the debit card.

Investment opportunities for ADP HSA account.

HSA – Tax IssuesHSA Provider (Administered by ADP)

◦Reporting for year-end taxes will be sent to the individual employee (account holder). Form 1099-SA – Reporting all distributions from the HSA Form 5498-SA – Reporting of contributions and transfers

into the HSAAccount Holder

◦ Individual responsibility: Ensure total contributions do not exceed allowable

maximums Keep accurate records of contributions and withdrawals Maintain receipts for all use of HSA dollars: purchases and

bill payments File form 8889 as part of income tax submission to the IRS

HSA – New Hires and Terminations New Hires (coming on board mid-year)

HSA seed money from MMH will be prorated. Deductibles and out-of-pocket maximums are not prorated

for new hires Leaving the plan:

Leave employment Become covered through a spouse’s plan HSA dollars are portable – they remain the account holder’s

dollars to keep. The HSA is an individual account. The account holder may have different/additional account fees. The account holder can no longer contribute to the HSA (unless they are covered through an HSA qualified HDHP and remain eligible). The account holder can continue using HSA funds for qualified health care expenses of his/her qualified dependents. Additionally if age 65 or older funds can be used as retirement funds by paying income tax only with no penalties.

2014 Medical Plan (employee costs)

MMH In Network Out of Network

Annual Limit UnlimitedDeductible – Individual $1,250 $1,750 $3,250Deductible – Family $2,500 $3,500 $6,500Out of Pocket – Individual (Incl Ded) $6,350 No Max

Out of Pocket – Family (Incl Ded) $12,700 No Max

Office Visits n/a 25% after ded 45% after dedPreventive Office Visit n/a 0 45% after dedInpatient Hospital 0% after ded 25% after ded 45% after dedOutpatient Facility 0% after ded 25% after ded 45% after dedEmergency Room 0% after ded 25% after dedPrescription Drugs MMH RetailGeneric 10% after

ded 25% after ded n/a

Brand 10% after ded 25% after ded n/a

Non-Formulary Brand 10% after ded 25% after ded n/a

Bariatric Coverage 50% of cost (excluded

from deductable)

n/a n/a

Aggregating family deductible: If you have family coverage, one or a group of members must meet the deductible before coinsurance applies.

2014 HDHP Premium (Bi-Weekly Full Time Rates)

2013 Basic Premiums (Bi-Weekly Full Time Rates)

2014 HDHP Premiums (Bi-Weekly Full Time Rates)

2013 Premium Premiums (Bi-Weekly Full Time Rates)

2014 HDHP Premiums (Bi-Weekly Part Time Rates)

MMH Financial Assistance Policy

Policy allows for offset of a portion of patient liability if the annual household income is up to 350% of federal poverty limits (FPL).

Catastrophic plan allows for assistance up to 500% FPL is out of pocket costs exceed 25% of annual income.

2014 Financial Assistance Guidelines

%FPILup to 100% 101%-150% 151%-200% 201%-250% 251%-300% 301%-350%

Discount % 100% 90% 80% 70% 60% 50%Family Size      

     1

$11,490 $17,235 $22,980 $28,725 $34,470 $40,215

2$15,510 $23,265 $31,020 $38,775 $46,530 $54,285

3$19,530 $29,295 $39,060 $48,825 $58,590 $68,355

4$23,550 $35,325 $47,100 $58,875 $70,650 $82,425

5$27,570 $41,355 $55,140 $68,925 $82,710 $96,495

6$31,590 $47,385 $63,180 $78,975 $94,770 $110,565

7$35,610 $53,415 $71,220 $89,025 $106,830 $124,635

8$39,630 $59,445 $79,260 $99,075 $118,890 $138,705

Claim Examples

MEET LAURA She’s a single PCA making $10/hour

($20,800/year)

If Laura enrolls herself in the HDHP:− Midland would contribute $500 in her HSA − She elects to contribute $300 in her HSA

Her plan design options are below:

Basic 2013

HDHP2014

Employee Only $553 $672

Basic2013

HDHP2014

Deductible $1,000/$1,500

$1,250/$1,750

Out of Pocket Maximum

$4,000/$4,500 $6,350

Office Visit Copays $30/$45 Ded and coin

Pharmacy Copays $10/30%/50% Ded and coin

Assumes 2013 full time basic plan rates including non-tobacco and wellness discountAssumes HDHP full time rates including non-tobacco and wellness discount

Laura’s comparison of a light usage year of medical expenses

Expense Basic 2013

HDHP2014

Midland funds $500 into HSA

Preventive Annual Physical (1)Routine Office Visits (2 at $100)Brand Name Prescription Drugs (2 at $160)Total Medical Expenses

$0$60

$160$220

$0$200$320

$520 HSA Account Employee Premiums+ Employee HSA Contributions+ Medical Expenses- HSA payments= Total Employee Out-of-Pocket

$553$0

$220$0

$773

$672$300$520

($520)$972

Contributions

ExpensesBalance

$800$520$280

HSA funds carryover each year

Assumes 2013 rates are full time basic plan including non-tobacco and wellness discountAssumes HDHP full time rates including non-tobacco and wellness discountAssumes deductible has not been met on either plan yearHSA Account Contributions are from MMH funds and the employee’s contributionAssumes RX are brand non formulary for 2013

Expense Basic 2013

HDHP2014

Preventive Annual Physical (1)Lab Test (1 at $180)ER Visit (1 at $800)MMH Brand Name Prescription Drugs(3 @ $160)Routine Office Visits (6 at $100)Total Medical Expenses

$0$180$200$240$180

$800

$0$180

**$800*$291$150

$1,421

Midland funds $500 into HSA

HSA Account Employee Premiums+ Employee HSA Contributions+ Medical Expenses- HSA Payments= Total Employee Out-of-Pocket

$553$0

$800$0

$1,353

$672$300

$1,421($800)

$1,593

Contributions

ExpensesBalance

$800$1,42

1$0

Laura’s comparison of a medium usage year of medical expenses

Assumes 2013 rates are full time basic plan including non-tobacco and wellness discountAssumes HDHP full time rates including non-tobacco and wellness discountAssumes deductible has not been met on 2013 plan year*Assumes RX claim hits deductible for 2014Assumes RX are brand non formulary for 2013**If Laura applies for Financial Assistance under the new MMH policy, her income level would qualify her for 90% discount on services at MMH, reducing this $980 total to $98 out of pocket.

Expense Basic 2013

HDHP2014

Preventive Annual Physical (1)Routine Office Visits (4 at $100)Specialist Visits (4 at $200)Physical Therapy ($800)Lab Test (1 at $180)Hospital & Surgery ($10,000)MMH Brand Name Prescription Drugs (5 @ $160)Total Medical Expense

$0$120$180$800$180*$20$400

$1,700

$0^$400^$800^*$50

$0$0

$80$1,330

Midland funds $500 into HSA

HSA Account Employee Premiums+ Employee HSA Contributions+ Medical Expenses- HSA Payments= Total Employee Out-of-Pocket

$553$0

$1,700$0

$2,253

$672$300

$1,330($800)

$1,502

Contributions

ExpensesBalance

$800$1,33

0$0

Laura’s comparison of a high usage year of medical expenses

Assumes 2013 rates are full time basic plan including non-tobacco and wellness discountAssumes HDHP full time rates including non-tobacco and wellness discountAssumes RX are brand non formulary for 2013*Met 2013 deductable with Hospital & Surgery*Met 2014 deductable with PT^ Balance of annual deductable. Financial assistance would reduce this to $85 out of pocket, and annual deductible would still be satisfied.

MEET THE MICHAEL SMITH FAMILY He’s a nurse with a wife and 2 kids. He makes

$30/hour ($62,400/year). His wife is self-employed and makes $15,000/year

If Michael enrolls his family in the HDHP:− Midland would contribute $250 in his HSA − He elects to contribute $600 in his HSA

His plan design options are below:

Premium 2013 HDHP

Family $4,527 $2,315

Premium 2013 HDHP

Family Deductible $1,000/$1,500

$2,500/$3,500

Out of Pocket Maximum

$4,000/$4,500 $12,700

Office Visit Copays $20/$35 Ded and coin

Pharmacy Copays $8/20%/40% Ded and coin

ExpensePremiu

m2013

HDHP2014

Preventive Annual Physicals (2)Routine Office Visits (2 at $100)Brand Name Prescription Drugs (2 @ $160)Total Medical Expenses

$0$40

$128$168

$0$200$320

$520

Midland funds $250 into HSA

HSA Account Employee Premiums+ Employee HSA Contributions+ Medical Expenses- HSA Payments= Total Employee Out-of-Pocket

$4,527$0

$168$0

$4,695

$2,315$600$520

($520)$2,915

Contributions

ExpensesBalance

$850$520$330

Michael’s comparison of a light usage year of medical expenses

HSA funds carryover each year

Assumes 2013 rates are full time premium plan including non-tobacco and wellness discountAssumes HDHP full time rates including non-tobacco and wellness discountAssumes deductible has not been met on either plan year

ExpensePremiu

m2013

HDHP2014

Preventive Annual Physicals (2)Lab Test (1 at $180)ER Visit (1 at $800)Routine Office Visits (6 at $100)Brand Name Prescription Drugs (3 @ $160)Total Medical Expenses

$0$180$150$120$192

$642

$0**$180**$800

$600$480

$2,060

Midland funds $250 into HSAHSA Account

Employee Premiums+ Employee HSA Contributions+ Medical Expenses- HSA Payments= Total Employee Out-of-Pocket

$4,527$0

$642$0

$5,169

$2,315$600

$2,060($850)$4,12

5

Contributions

ExpensesBalance

$850$2,06

0$0

Michael’s comparison of medium usage year of medical expenses

Assumes 2013 rates are full time premium plan including non-tobacco and wellness discountAssumes HDHP rates including non-tobacco and wellness discountAssumes deductible has not been met on either plan year**If Michael applies for the Financial Assistance under the new MMH policy, his family income level would qualify him for 60% discount on services at MMH, reducing this $980 total to $392 out of pocket

ExpensePremiu

m2013

HDHP2014

Preventive Annual Physicals (2)Routine Office Visits (4 at $100)Specialist Visits (4 at $200)Physical Therapy ($800)Lab Test (1 at $180)Hospital & Surgery ($10,000)MMH Brand Name Prescription Drugs (5@$160)Total Medical Expense

$0$80

$140*$545

*$27*$0

$320$1,112

$0$400$800

**$800**$180

**^$320^$80

$2,580

Midland funds $250 into HSA

HSA Account Employee Premiums+ Employee HSA Contributions+ Medical Expenses- HSA Payments= Total Employee Out-of-Pocket

$4,527$0

$1,112$0

$5,639

$2,315$600

$2,580($850)4,645

Contributions

ExpensesBalance

$850$2,58

0$0

Michael’s comparison of a high usage year of medical expenses

*met 2013 deductible after PT^Assumes $2500 MMH deductible is met** If Michael applied for financial assistance, his financial responsibility would only be 40% of the $1,300. He would only pay $520.

Assumes 2013 rates are full time premium plan including non-tobacco and wellness discountAssumes HDHP rates including non-tobacco and wellness discountAssumes deductible has not been met on either plan year

HANDOUTS List of Preventive RX Covered at 100% Q and A