CAMPBELL COUNTY EMPLOYEES BENEFIT PLAN HDHP HSA Review

CAMPBELL COUNTY EMPLOYEES BENEFIT PLAN HDHP & HSA Review High Deductible Health Plan & Heath Savings Account Review January 2015

Plan Changes Coming. . . • The Campbell County Employees High Deductible Medical Plan including Rx Benefit (HDHP) • The same benefit coverage – change to deductible & co-insurance • • • amounts No change to out of pocket maximum No change to premium cost sharing A qualified plan – enrollees are qualified to have an HS A Not a grandfathered plan Wellness benefit will be enhanced to meet requirements of ACA

Plan Changes Coming. . . • The Campbell County Employees High Deductible Medical Plan including Rx Benefit (HDHP) • Deductible is one or the other – no embedded deductible • Single coverage deductible is $1, 300 – no benefits are paid until that amount is met • Family coverage deductible is $2, 600 – no benefits are paid until that amount is met

Plan Changes Coming. . . • Two Plans LDHP vs. HDHP Campbell County Employees Health Plans Compared Low Deductible Health Plan LDHP High Deductible Health Plan HDHP Coverage Benefit coverage is the same for both plans. Single $500 Single $1, 300 Deductible Emp + 1 & Family $1, 000 Emp + 1 & Family $2, 600 $2, 000 Single $1, 200 Co-insurance (both Single 80/20) Emp + 1 & Family $4, 000 Emp + 1 & Family $2, 400 $2, 500 Single $2, 500 Total Out of Pocket Single Maximum Emp + 1 & Family $5, 000 Eligible, however, if Health FSA is Eligible elected, HSA in not available Health FSA Eligible Dependent Care FSA Eligible Health Saving Account (HSA) Employer Contribution Rx applied to Deductible/Co. Insurance 2015 Maximum Contribution Not eligible. HSA eligibility requires HSA eligible if only enrolled in a HDHP enrollment in a High Deductible (cannot be on spouse's plan that is not a HDHP). Health Plan (IRS Regulation) FSA $100 Match OR Single: $300/yr OR FSA - $100 Match HSA Emp + 1 & Family: $600/yr No Health FSA Dep Care FSA $2, 500 $5, 000 Yes - full, discounted price is paid until deductible is met; allowable charge is applied to deductible Single - HSA $3, 350 Family - HSA $6, 650

Health Saving Account Facts • 3 rd Party Trustee • Trustee will be selected on October 21 st by the Commissioners; Compensation Committee review the RFP responses and make a recommendation • HSA belongs to the account holder • Account is “portable”; it stays with you regardless of your employment • Money stays in account from year to year • The annual maximum contributions may change from year to year • Governed by the IRS • In 2015 there is a “catch-up” contribution of $1, 000 allowed for individuals 55 or older

Health Saving Account Facts • Triple Tax advantage • Contributions, made by you or your employer, are not taxable income • Interest or other earnings are not considered taxable income • Distributions may be tax free if you pay for qualified medical expenses • The money is always belongs to the account holder • The money remains in your account until you use it • You cannot have a joint HSA • The only question is: if a distribution qualifies favorable tax treatment – qualified medical expenses are not subject to income tax • A distribution that is made for a non-qualified expense is subject to income tax and if it made before reaching that age of 65, a 20% penalty

Health Saving Account Facts • Account holders responsibility to manage the account • Account holders responsibility to do mandatory tax reporting • Account holders responsibility to do the necessary record keeping • Our advise is just that advise – we are not tax accountants or tax lawyers • Campbell County determines how and for whom they will: • 1) make deductions and • 2) make contributions • Employee contributions are part of total compensation package and may vary from year to year • What is right for you depends on your total financial plan

Health Saving Account Facts • Requirements for an individual to be eligible for an HSA • You must be covered under a high deductible qualified health plan (HDHP) • You must have no other health cover except what is permitted such as: • Insurance that provides benefits for Workers’ Compensation, tort liabilities, or liabilities related to ownership or use of property • Insurance that provides benefits for a specific disease or illness • Insurance that provides a fixed amount per day (or other period) of hospitalization • You can also have coverage for the following items: • • • Accidents Disability Dental Care Vision Care Long-term Care

Health Saving Account Facts • Distributions from an HSA eligible for favorable tax treatment • The IRS defines qualified medical expenses as amounts paid for the “diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. ” Qualified medical expenses are eligible for reimbursement through your HSA as long as they are not reimbursed through insurance or other sources. • Insurance premiums are generally not considered qualified medical expenses. However, the following types of insurance premiums typically do qualify: • Continuation coverage under federal law (i. e. , COBRA) • Qualified long-term care insurance contract • Any health plan maintained while an individual is receiving unemployment compensation under federal or state law • For accountholders age 65 and over (i. e. , those eligible for Medicare), premiums for any health insurance (including Medicare and Medicare Part D premiums) other than a Medicare supplemental policy

Health Saving Account Facts Qualified medical expenses are those incurred by the following persons. 1. 2. 3. You and your spouse. All dependents you claim on your tax return. Any person you could have claimed as a dependent on your return except that: • The person filed a joint return, • The person had gross income of $3, 900 or more, or • You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption.