2015 health care options

2015 Health care options

Introduction to Healthy Savings Plan Options

Agenda

• Health care plan options for 2015 – Basics – How they work

• Medical savings accounts • Introduction to ConnectYourCare • Open enrollment • Questions

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Action required for open enrollment

• For coverage you must

go to the web and enroll

• If you don’t enroll, your

medical/prescription & dental/vision will be waived

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Abbreviations

HDHP – High Deductible Health Plan

HSA – Health Savings Account

FSA – Flexible Spending Account

LPFSA – Limited Purpose Flexible Savings Account

DCFSA – Dependent Care Flexible Spending Account

CYC - ConnectYourCare

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2015 Health Care Plan Options • Traditional Plan Option • Healthy Savings Plan Option 1 (Funded) • Healthy Savings Plan Option 2 (Unfunded)

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Know your cost

Hormel Foods employees and family spend less than $1,000 out-of-pocket annually!

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2015 Health Care Plan Options • Traditional Plan Option – This plan is the previous low deductible offering.

With this plan you may enroll in the health care flexible spending account (FSA).

• Advantages include: Meet your deductible sooner Tax advantages with the FSA.

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2015 Health Care Plan Options

• Healthy Savings Plan Options 1 & 2 High-deductible health plans (HDHP) Health savings account (HSA) Limited purpose flexible spending account (LPFSA) Advantages include: Lower contributions Tax advantages More control over your health care costs Opportunity to save money Company contribution to Option 1 to help offset deductible

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Why offer a HDHP & HSA

• Why is Hormel Foods offering this – Help save for health care in retirement – Flexibility and choice on how your money is spent – HSA funds are yours to keep and move with you – Use for current or future expenses – Lower weekly contributions – HSA tax-free opportunity

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HDHP Deductible difference

• Under a HDHP, prescription drugs must be subject to the same deductible and out-of-pocket maximum as medical services.

• Some preventive drugs, such as birth control and prescribed prenatal vitamins, are not subject to the deductible.

• Family coverage – employee and dependents must meet the combined family deductible before coinsurance applies.

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Agenda



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Preventive Care HDHP and Traditional

All in-network preventive care is 100 % covered and no deductible or coinsurance is required.

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How the Traditional Plan Option works

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Deductible (Medical Only)

Co-Insurance (Medical Only)

Maximum Out of Pocket

(Medical Only)

Co-Insurance

(Prescription Only)


(Prescription Only)

How a HDHP plan works

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Deductible

(Medical & Prescription)

Co-Insurance




Healthy Savings Plan Healthy Savings Plan Traditional Plan Option 1 Option 2 Option

Deductible

Single Deductible $1,500 $2,000 $500

Family Deductible $3,000 $4,000 $1,500 MAX

Any combination of employee and dependents

Any combination of employee

and dependents

(Dependents $500 each or $1000 combined) + (Employee $500 Deductible)

Copay/Coinsurance Prescription Drug

After deductible, you pay 20%; plan 80%

After deductible, you pay 20%; plan 80% 10%/20%/35% with $5 minimum

Emergency Room



After $100 Copay and deductible, you pay 20%; plan 80%

OOP (Out of Pocket) Maximum All Plans pay 100% once OOP is reached Single Medical $4,000 $4,000 $3,000

Family Medical $8,000 $8,000 $6,500

Single Drug Included in Medical OOP Included in Medical OOP $1,500 Family Drug Included in Medical OOP Included in Medical OOP $3,000

In-Network Plan Comparison

In Network Plan Comparisons

Healthy Savings Plan Healthy Savings Plan Traditional Plan Option 1 Option 2 Option

Company Contribution Single $500 $0 NA

to HSA Family $1000 $0 NA Your optional pre-tax Single: $0 to $2,850 Single: $0 to $3,350 NA

contribution to HSA Family: $0 to $5,650 Family: $0 to $6,650

You may contribute an extra $1,000 if you are age 55 or older during

calendar year

You may contribute an extra $1,000 if you are age 55 or older during

calendar year

FSA or LPFSA $2,500 $2,500 $2,500

Dental/Vision expenses only

Dental/Vision expenses only

DCFSA $5,000 $5,000 $5,000

Pre-Tax Contribution Options

Meet Ben

• Single (Tier 1) • Light health care user. • Annual preventive

exam • Fills several

prescriptions for seasonal allergies.

Ben’s expenses for the year are shown in the table to the right. These prices reflect negotiated in-network pricing through the BCBS provider network.

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Services Cost

Preventive annual exam $500

Medical expenses • Office visit

$150

Prescription Expenses • Generic (four)

$360

Total Expenses $1,010

Meet Ben (continued) Expense Healthy Savings

Plan Option 1 (Single ded.

$1,500)

Healthy Savings Plan Option 2 (Single ded.

$2,000)

Traditional Option

(Single ded. $500)

Covered at 100% Preventive care Ben pays: $0

Plan pays: $500 Ben pays: $0

Plan pays: $500 Ben pays: $0

Plan pays: $500

Prescription drugs Four generic prescriptions

Ben pays: $360 ($90 x 4)

Plan pays: $0

Ben pays: $360 ($90 x 4)

Plan pays: $0

Ben pays: $36 10 % = ($9 x 4) Plan pays: $324

Ben’s expenses go towards his deductible

Medical expenses (non-preventive)

Ben pays: $150 Plan pays: $0



Ben Paid $510 $510 $186

Plan Paid (Company)

$500 $500 $824

Total Paid $1,010 $1,010

$1,010

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Meet Ben (continued)


$1,500)


$2,000)

Traditional Option

(Single ded. $500)

Ben’s weekly contributions

Ben pays: $1,248 ($24 x 52 weeks)

Ben pays: $572 ($11 x 52 weeks)

Ben pays: $1,612 ($31 x 52 weeks)

Ben’s Out-of-pocket

$510 $510 $186

Company HSA Contribution

($500)

Ben’s Total Cost $1,258 $1,082 $1,798

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Meet Carla

• Married to Matt • 3 children (one a recent baby) • Family coverage (Tier I) • Birth during the year. • 2 older children had minor

illnesses throughout the year and incurred office visits (two each) and prescription costs.

• Matt went to the emergency room once during the year.

Carla’s expenses for the year are shown in the table to the right. These prices reflect negotiated in-network pricing through the BCBS provider network.

Services Cost

Preventive care – vaccines $100

Medical expenses - Carla • Hospital and delivery

$7,500

Other medical expenses – • Office visits (four) • Emergency room

$600

$1,100

Prescription Expenses • Generic (four for

children and three for Carla)

$315

Total Expenses $9,615

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Meet Carla (continued)

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Expense Healthy Savings Plan Option 1

(Family Ded. - $3,000)

Healthy Savings Plan Option 2

(Family Ded. - $4,000)

Traditional Option (Family Ded. - $1,500)

Covered at 100% Preventive care - vaccines

Carla pays: $0 Plan pays: $100



Prescription drugs Seven generic prescriptions

Carla pays: $315 ($45 x 7)

Plan pays: $0

Carla pays: $315 ($45 x 7)

Plan pays: $0

Carla pays: $35 ($5 minimum x 7) Plan pays: $280

Carla meets her deductible under all plan options

Medical expenses (non-preventive)

Carla pays: $3,988 ($2,685 remaining family deductible +

$1,303 co-insurance) Plan pays: $5,212

Carla pays: $4,788 ($3,685 remaining family deductible +

$1,103 co-insurance) Plan pays: $4,412

Carla pays: $3,040 For Carla: $1,900

($500 deductible + $1,400 co-insurance)

For children/husband: $1,140

($1,000 deductibles + $140 co-insurance) Plan pays: $6,160

Carla Paid $4,303 $5,103 $3,075 Plan Paid (Company) $5,312 $4,512 $6,540 Total Paid $9,615 $9,615 $9,615

Meet Carla (continued)

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Healthy Savings Plan Option 1 (Family Ded. -

$3,000)

Healthy Savings Plan Option 2 (Family Ded. -

$4,000)

Traditional Option (Family Ded. -

$1,500)

Carla's weekly contributions

Carla pays: $3,380

($65 x 52 weeks)

Carla pays: $1,508

($29 x 52 weeks)

Carla pays: $4,212 ($81 x 52 weeks)

Carla’s

Out-of-pocket

$4,303 $5,103 $3,075

Company HSA Contribution

($1,000) N/A N/A

Carla’s Total Cost

$6,683 $6,611 $7,287

Agenda



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2015 Plan options

Health care for 2015

Healthy Savings

LPFSA

HSA

Traditional FSA

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HSA Overview Advantages

Savings vehicle for medical expenses

• Triple tax savings • Interest / Investments • Flexible • Multiple uses • Easy Access • Yours to keep • Save for retirement • Change contribution

anytime

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HSA Eligibility

Cannot contribute to HSA if: • Any Veteran’s Administration health

benefits in the last 3 months • Claimed as a dependent on someone

else’s 2014 tax return • Health Reimbursement Arrangement

(HRA) • Non qualified HDHP • Flexible Spending Account (FSA) • Enrolled in Medicare

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Your HSA is a triple tax-free account.

• Health Savings Accounts (HSAs) can help you shoulder rising out-of-pocket medical costs.

Pre-tax deferred

Grows tax free

Withdrawal tax free

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Taxes

You will not owe taxes or penalties on any HSA distributions (money you used) for qualified medical expenses. If you used HSA funds for non-qualified medical expenses, you must pay income tax and may have to also pay an additional 20% tax on those distributions.

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IRS Limits

• IRS Maximum limits for 2015 are – $3,350 for individual coverage and – $6,650 for family coverage. – Include both employer and employee contributions.

• $1,000 catch-up contributions option for employees age 55 and older.

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Savings with a FSA & HSA • These expenses can be paid with tax-free

dollars and save you up to 30%, depending on your tax bracket.

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With FSA or HSA Without

Annual pay $35,000 $35,000

Pre-tax contribution to FSA or HSA -$1,500 -$0

Taxable income =$33,500 =$35,000

Federal income & Social Security taxes -$7,362 -$7,852

After-tax dollars spend on eligible expenses

-$0 -$1,500

Spendable Income =$26,138 =$25,648

Savings with FSA or HSA $490 $0

Savings that really add up

• Say you contribute $3,000 to your HSA each year until retirement. Assuming you use $1,500 a year for medical expenses, earn 8% a year in interest and investments, and reinvest all earnings, your savings can really add up.

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Starting Age HSA Value at age 65

25 $651,000

35 $271,000

45 $103,000

55 $ 31,000

HSA have 2 types of users Spenders

• Contribute the amount they plan to use in a given year

• Budget and save on OOP cost • Company contributions can

help meet deductible • Direct premium savings to HSA • Don’t skip preventive care – its

free

Savers • Contribute the maximum

amount they can afford but pay for qualified expenses out of pocket

• Use the HSA as an additional retirement savings vehicle

• Maintain a tax shelter • Building a health care nest egg

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Limited Purpose FSA

• What does Limited Purpose mean? Only dental and vision expenses - $2,500 per year - Able to pair with HSA to save more money - Tax advantage HDHP

LPFSA HSA

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Weekly contributions < $75,000

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Coverage Level

Traditional Plan

Option


(Funded)

Healthy Savings Plan Option 2 (Unfunded)

Single $ 31 $ 24 $ 11

EE + Children $ 46 $ 39 $ 18

EE + Spouse $ 70 $ 54 $ 24

Family $ 81 $ 65 $ 29

Wellness program deductions are in addition to the contributions listed above.

Based one employee earnings…

Weekly contributions $75,000 - $149,999

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Coverage Level

Traditional Plan

Option


(Funded)

Healthy Savings Plan

Option 2 (Unfunded)

Single $ 36 $ 30 $ 17

EE + Children $ 54 $ 49 $ 28

EE + Spouse $ 82 $ 68 $ 39

Family $ 94 $ 82 $ 47

Weekly contributions >$150,000

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Coverage Level

Traditional Plan

Option


(Funded)

Healthy Savings Plan

Option 2 (Unfunded)

Single $ 40 $ 35 $ 22

EE + Children $ 61 $ 57 $ 36

EE + Spouse $ 93 $ 79 $ 50

Family $106 $ 97 $ 61

Plan Comparison Tool

Be Prepared and Know Your Medical Spending

• Average annual total medical cost (Remember to exclude preventive)

• Average annual Rx cost • Average annual

dental/vision costs • Future planned expenses

(pregnancy, surgery, etc…)

• Available online in September 2014

• Each 2015 plan feature will be pre-loaded into the tool

• You will need to input your estimated costs

• You will be notified when the tool is available

CYC / Pivot Website

Know your medical spending Determine your typical annual medical expenses: 1) Go to the BCBS website 2) Login/register for your account 3) Search by:

A. PAST claims: • Date • Cost • EOB (explanation of benefits)

B. FUTURE costs • “Find a Doctor” tool - compare costs and quality of 300+ procedures.

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Know your prescription spending

Determine your typical prescription expenses: 1) Go to the PRIME website 2) Login/register for your account 3) Search by:

A. PAST claims: • Date – click on medicine for details

B. FUTURE costs • “Find Medicine” tool - compare costs and pharmacies.

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Agenda



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Why ConnectYourCare?

Connect

• Offers HSA, FSA, LPFSA, DCFSA • Online Claims Submission & Processing

Your

• 24x7 Customer Service • Health Care Payment card

Care • Direct Deposit Reimbursement • HSA On-Demand

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HSA On Demand allows you access to your full annual election amount. Access is available on the first day of your eligibility.

HSA On Demand

Immediate Need, Immediate Funds

Interest Free Advance

Easy to Track

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CYC – Health Care Payment Card Approved

merchants – Dr. offices, vision

centers, pharmacies

Quick Access to your funds

FSA LPFSA

HSA

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CYC Mobile –Access on the go

• View : Account balances Transaction history Claims details FAQs • Receive Important account alerts • Take a photo of your receipt and

upload it directly to the system • Submit a new claim • Available for Android, iPhone and

Windows Phones

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HSA Interest Earnings

HSA Bank provides • Competitive interest rates Credited each month based on account balance

– Daily Balance Interest Rate APY – $25,000 or more 1.49% 1.50% – $15,000.00 - $24,999.99 1.49% 1.50% – $10,000.00 - $14,999.99 1.49% 1.50% – $5,000.00 - $9,999.99 0.25% 0.25% – $2,500.00 - $4,999.99 0.15% 0.15% – Less Than $2,500 0.10% 0.10%

• Investment options TD Ameritrade Brokerage Option DEVENIR Mutual Fund Selection Option

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CYC – File cabinet • Claims can be “filed away” • Funds allowed to be used today or be saved for future

expenses • HSA owned by you and 100% vested from day one • HSA goes with you if you change jobs or health plans. • HSA use for retirement health care expenses and post

65 Medicare premiums

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CYC - FSA

• If you have a FSA, you can pay for medical, prescription, dental, or vision expenses. – Minimum of $52 – Maximum of $2,500

• CYC will be the provider as of 1/1/2015

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FSA & LPFSA- Rollover

• Balances up to $500 will rollover each year as long as the employee elects the coverage for the following year.

• In 2015 the balances that are $500 or less from 2014 will be added to the accounts on March 31, 2015.

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CYC - Dependent Care FSA

• Pre-tax money for eligible dependent day care expenses so you and /or your spouse can work, look for work, or attend school full-time.

- Child care for under age 13 at a day camp, nursery school or private sitter - Before and after school care - Care of an incapacitated adult • $52 -$5,000 per year • Funds must be in the account to be reimbursed • CYC will be the provider as of 1/1/2015

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Where do I go for more information?

• www.connectyourcare.com/hormel • Pivot > HR/Benefits>Employee Benefits

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Agenda



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Open Enrollment timeline for 2015 – Information mailed: Third week of September – Web open to make elections: October 2-15 – Confirmations mailed: Last week in October – Web reopens for any changes: November 6 – 13 – 2nd confirmations: Last week in November

Review confirmation Statements carefully! Elections are final.

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After you have made your enrollment choice – If you change your health care plan you will

receive new cards from BCBS, Prime, Delta Dental during the last week of December.

– Enrollment guide from CYC for the following plans: HSA LPFSA FSA DCFSA

Mailed out the last week in December from CYC • Instructions for signing up on line for:

– Account – Direct Deposit – Health payment card

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Action required for open enrollment

• For coverage you must go to the web and enroll.

• If you don’t enroll, your

medical/prescription & dental/vision will be waived. You will NOT have coverage in 2015!

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Questions??????

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2015 health care options

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