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Don’t Forget! Mesa Walks United this Saturday!

Enjoy fresh air and a little exercise all while helping YOUR Mesa schools! Mesa United Way in partnership with Mesa Schools is hosting a 3 mile walk around downtown Mesa April 10, 2010. Mesa United Way's LIVE UNITED^TMWalk United registration begins at 7:00 a.m. and the walk will begin at 9:00 a.m. Log on to the Live United Walk United Web site for more information.
 

Health Care Reform Spotlight
On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law. On March 25, 2010, a second Act, the Health Care and Education Reconciliation Act (HCERA), was passed by the House and Senate.

The centerpieces of health reform - the individual mandate, subsidies, Health Insurance Exchanges, and the employer free rider penalty - are all effective in 2014. However, important changes to plan benefit design rules take effect for plan years starting on or after six months post enactment, which for MPS is going to be the next Plan year, October 1, 2010. Two of these important reforms affecting the District are as follows: 

Coverage for dependent children will be required to continue to make that coverage available until the child reaches age 26. However, the requirement only applies to children who are not eligible to enroll in another employer-sponsored plan.

The Act only permits reimbursement of over-the-counter medications through a health flexible spending account (FSA), and a health savings account (HSA) if a health care provider writes a prescription for them, effective in 2011. Beginning in 2013, the Act will also cap health FSA contributions at $2,500 per year.

The Act also increases the penalty for withdrawing HSA funds for non-qualified expenses from 10 percent to 20 percent beginning in 2011.   

Mesa Public Schools is preparing for the myriad of new requirements. Compliance with these new requirements begins with awareness and education.  As we examine The Act, our Plans and provisions, and the impact, we will keep you informed through these Health Care Reform Spotlight articles in your the Employee Benefits Journal.

I love My Diamondbacks! - MPS Night at Chase Field
"Take me out to the ball game. Take me out with the crowd. Buy me some ..." D-backs tickets are again available at special discounts for Mesa Public Schools. The D-backs are pleased to offer these special discounts through Mesa Public Schools to bring you, your family, friends and colleagues out for an exciting game of baseball, and to celebrate the end of the school year in 2010. Games and seat locations are updated on an ongoing basis when clicking on the "Buy tickets now" button on the page-link below. If you have used this link in the past, you may use the same account information. If a first time user, signing up for an account is quick and easy.

Date: Friday, May 7
Time: 6:40 PM
Opponent: Milwaukee Brewers
Infield Reserve $8, Bleachers $10, Baseline Reserve $20

Purchase tickets online, password MPS

Financial Health Fair

Are you registered for the financial health fair workshops?  This is shaping up to be an amazing event.  In one evening, employees have the opportunity to speak with experts about credit, debt, taxes, retirement, buying a home, foreclosure, bankruptcy, and wills/estates all at once (and it’s free)!

Plan to attend any of the workshops that interest you. The workshops will be repeated three times: 4 p.m., 5 p.m. and 6 p.m. This way, you may attend three workshops in one evening.

Foreclosure or Short Sale? Current Real Estate Overview
Caryn Shannon
Keller Williams Realty East Valley

Digging up Dollars (Budgeting)
Linda Pond
Nationwide Retirement Solutions

Bankruptcy Law
Matt White, Esq.
UDALL, SHUMWAY & LYONS, P.L.C.

Get Back on Track: Develop your Financial Recovery Plan
Diane Vanderburgh
General Principal, Edward Jones

Have Confidence on the Road - An auto insurance overview
Stacey L. Robinson
The Horace Mann Companies

Budgeting, Credit Counseling and Debt Management
Mike Sullivan, Director of Education
Take Charge America

Wills and Estate Planning
Kenneth C. Barney, Esq. 
Rowley, Chapman, Barney & Buntrock

Registration is available online.

Coffee and refreshments will be provided by Dutch Brothers. 

Frequently Asked Questions about High Deductible Health Plans and Health Savings Accounts

Over 60 informational meetings were held throughout the district last month. The meetings were very beneficial. Several frequently asked questions were asked and the answers to these questions are as follows:

What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is an innovative medical option that gives you more control over how, when, and where you get medical care and how much you spend on it. Paired with required enrollment in a High Deductible Health Plan (HDHP), an HSA is designed to encourage you to set money aside for your health care expenses; financially motivate you to spend your health care dollars wisely; and give you a way to pay for certain health care expenses—like acupuncture, visits to a chiropractor, fertility treatments, therapy, and eye care–your current medical plan might not cover. It provides a tax-free way to help you build savings for future medical expenses.

How does a Health Savings Account (HSA) work?

An HSA works like a tax-exempt IRA, except that the money is used to pay for your share of current and future health care costs in conjunction with your high deductible medical plan. Also, like an IRA, your HSA funds can earn interest, making your fund grow. Each month you and your employer deposit money on a tax-free basis, up to an IRS-determined annual cap.

Who is eligible to open and maintain an account?

Eligible Individuals must NOT be:

• Covered by any other medical plan that is not a high-deductible health plan
• Entitled to Medicare benefits
• Claimed as a dependent on another person’s tax return.

Can I change the amount I elect to contribute to the HSA at any time during the year?

You are allowed to change your election amount at any time during the plan year. However, keep in mind that you are not able to change your medical coverage during the year unless you have a qualifying event.

What is a High Deductible Health Plan (HDHP)?

A High Deductible Health Plan (HDHP) is a health insurance plan with lower premiums and higher deductibles than a traditional health plan. Mesa Public Schools offers two HDHPs, the HDHP1500 and the HDHP2500. The HDHP1500 has an individual $1500 deductible, $3000 family deductible. The HDHP2500 has an individual deductible of $2500 and a family deductible of $5000.

How does my High Deductible Health Plan (HDHP) Work?

Except for in-network preventive care, which is typically covered at 100%, you must meet an annual deductible before your insurance carrier covers your eligible medical expenses. You can use your HSA money to reimburse yourself for expenses that go toward meeting the deductible. Depending on the amount of money you put into your HSA—and if you use your HSA money wisely— you may not have to dip into your own after-tax funds. On the other hand, if you use up your HSA balance, your remaining deductible obligation comes out of your pocket.

What happens when I meet the deductible?

Once you meet your annual deductible, the High Deductible Health Plan pays your eligible in-network expenses. You pay your coinsurance up to the out-of-pocket maximum. Once you reach your out-of-pocket maximum your remaining eligible expenses are paid at 100%. Eligible out-of-network expenses are reimbursed at a lower level with higher deductibles and out-of-pocket expenses.

What is the difference between an annual deductible and annual out-of-pocket maximum?

You must meet the plan year deductible before the plan pays most benefits. The out-of-pocket maximum is the most you will pay for eligible expenses, including prescription drugs, during the plan year. After reaching the maximum, the plan pays 100% for eligible expenses.

Under the HSA plans, will yearly “wellness” doctor visits be covered?

Yes. Wellness visits billed as preventive, and without a pre-existing medical diagnosis are covered at 100% and are not subject to the annual deductible.

If I choose a HDHP, will I still be using UnitedHealthcare network?

Yes. The High Deductible Health Plans will use a UnitedHealthcare network of providers. You can choose which provider(s) you want to see whenever you need treatment.

When I see an in-network UnitedHealthcare doctor, will his fees continue to be discounted and, if so, do I just pay the contracted fee?

Yes. You will pay the discounted or contractual fees.

Is the doctor’s office charge taken from the HDHP a co-pay amount, or the full office charge visit?
There are no office visit co-pays under the HDHP plans. When seeing an in-network provider, you will pay a discounted amount at the time of your visit, or your provider will bill you. Note: most UnitedHealthcare network providers accept the HSA debit card, which you can use to pay for your visit. The amount you pay for the visit will count toward satisfying your annual deductible.

How are medical claims processed?

Individuals pay the full contracted rate for services and prescriptions that they receive up until they reach the annual deductible. When you go to the doctor you will not pay a co-pay. Most facilities will send the claim to the insurance first then bill you. Some do require an estimated partial payment be made up front.

How are pharmacy claims processed?

The pharmacy has the ability to run the prescription claim through immediately. You will pay the full contracted rate for the prescription at the time of receipt.

If I choose the HDHP2500 Plan, (with the $2,500 deductible-no dental), can I pay my normal dental expenses with my HSA?

Yes. However, if you purchase a dental plan outside of the District dental plan, you cannot use your HSA to pay the premiums.

Can I enroll in one of MPS’s HDHP’s if I have secondary coverage through a spouse?

No. In order to be eligible to participate in an HSA plan, you cannot be covered by another "traditional" (i.e. non-high deductible) health plan.

I understand the cost of the MPS HDHP plans are considerably less than the Traditional Plan. What does the district do with the savings?

The difference between the cost of the HDHP plans and what the school district contributes to the EPO Plan is contributed to the HSA accounts of the HSA participants.

How and when are the employee and employer contribution made?

Contributions and deductions generally begin in October. The employer contribution is made at the beginning of the Plan year, and the employee deductions are spread equally over 18 or 26 pays.

What types of expenses can I use my HSA funds for?

Withdrawals for health care expenses (including medical, dental, vision, and any other IRS-qualified health care expense not covered by your High Deductible Health Plan) are tax free. IRSPublication 502 lists all qualified health care expenses. Check it out – you might be surprised that items like over-the-counter drugs, contact lens solution, prescription sunglasses and Long Term Care insurance premiums qualify for these tax advantages.

Can we use the HSA money for elective surgery, i.e., plastic/cosmetic surgery or cosmetic dental?

No. Distribution from an HSA account must be for qualified medical expenses, as defined by the IRS. Cosmetic surgery is not considered a "qualified" medical expense.

What are the benefits of the Health Savings Account plan?

The key to making a High Deductible Health Plan work for you is your commitment to systematically contribute to your HSA. If you fund your HSA consistently and then use the dollars in your account wisely, you build a tax-free reserve to pay for your health care expenses, possibly pay less out of your pocket for the care you receive, and maintain more control over your health care decisions.

What if I do not use the money by the end of the calendar year?

If you do not use all of the money in your HSA by the end of a calendar year, the balance rolls over to the next year. There is no limit to the amount you can roll over from year to year. Unused monies roll over indefinitely. You have total control over your HSA dollars. You decide if you want to reimburse your health care expenses through your HSA or keep the money invested in your HSA to cover your Medicare or other retiree health premiums tax-free (except Medigap) after you turn 65. You own your HSA account. If you retire or resign from MPS, your money is not forfeited.

Do I pay taxes on the employer contribution?

No. Your HSA contributions are tax-deductible (and any District contributions are excluded from your taxable income), so are the investment gains on your account balance.

Do I earn interest on my HSA funds? What choices of investments do I have for my funds?

The plan offers you a number of investment options when you elect to participate. Contact OptumHealth Bank for further information.

What is the maximum balance I can have in the HSA account?

There is no maximum HSA account balance; you can accumulate funds in the account over time. With that said, the IRS DOES limit the amount that can be contributed each year.

What is the maximum amount I can contribute?

In 2010, annual contributions are allowed, tax-deductible, up to $3,050 for individual coverage and $6,150 for family coverage. These limits are established by the IRS and indexed for inflation. If the full amount has not been funded in the calendar year, additional contributions can be deposited through the April 15 tax deadline. Please keep in mind that these are the total amounts that can be contributed to your account, including the Mesa Public Schools contribution.

Can I roll over funds from my HSA to an IRA?

No. You can roll over funds from one Health Savings Account to another, but not to an IRA.

What if I incur a significant medical expense early in the year and do not have enough money in my HSA to cover the cost?

Once the funds are in your account you can reimburse yourself. There are many different options for reimbursement; withdraw the money from an ATM, log on to www.myuhc.com and request a check be sent to you, make a non-qualifying purchase in the amount that is owed to you (make sure to save receipts). Hospitals and physicians’ offices will often give you a discount if you are paying “in cash” Most facilities offer payment plans as well.

I plan to retire in 3-4 years. How will the HSA work to my advantage?

Even though you will not have time to accumulate significant funds in your HSA, the plan's "catch-up" provisions will assist in building your account balance prior to your retirement. If you are age 55 or over, the IRSallows you to contribute an additional $1000 to your account (for 2009). Once you retire, you can use your HSA account for un-reimbursed medical expenses during your retirement.

Can I contribute to a medical flex spending account in addition to an HSA?

Yes. The medical flex account can be used on a “limited purpose” basis to pay your eligible dental and vision care expenses only.

I participate in the Health Care Expense Reimbursement flexible spending account. Does money in that account roll over from year to year?

No. The IRS does not allow FSA contributions to roll over from year to year. You must use those funds during the plan year - unused funds are forfeited.

Can I use my HSA to pay for dental and vision expenses?

The HSA can be used for qualified dental and vision expenses. However, it is important to remember that the contribution provided by Mesa Public Schools is to help you pay for your out of pocket medical costs associated with the medical plan. If you choose to use your HSA for dental and vision expenses and exhaust your HSA account, should you need the money to pay for a medical expense at a later time as part of you deductible, you may not have enough funds in your account to pay for those services.

Can funds be used for non-medical expenses for those under age 65?

Ineligible non-medical distributions must be included in gross income and are subject to a 10% penalty tax. An exception to the 10% penalty applies to distributions for ineligible expenses for those individuals who are disabled.

Can funds be used for non-medical expenses for those over age 65?

Yes. Non-medical distributions must be included in gross income, but are not subject to the additional 10% tax penalty.

What happens to my HSA if I die?

When you die, what happens to your HSA funds depends on who you name as the beneficiary of your HSA.  If your spouse is your beneficiary, he or she becomes the HSA holder, and the transfer is not taxable. If your named beneficiary is not your spouse, the HSA ceases to be an HSA, and the funds in the HSA are distributed to the beneficiary in a taxable distribution. The non-spouse beneficiary can reduce the taxable amount of the distribution by the amount of any of your qualified medical expenses that you incur before you die, as long as those expenses are paid from the HSA within a year after you die.

The Employee Benefits Journal is published for employees of Mesa Public Schools, an equal opportunity organization: The district does not discriminate on the basis of age, race, color, religion, sex, marital status, handicap/disability, or national origin.  The Journal is produced by the Employee Benefits Department.  Questions and comments are welcome.