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Insurance Services Programs

Federal Employee Health Benefit Program

RI 70-1 For Federal Civilian Employees


High Deductible and Consumer-Driven Health Plans

Nationwide and Regional High Deductible Health Plans with a Health Savings Account or Health Reimbursement Arrangement and Consumer-Driven Plans

A High Deductible Health Plan (HDHP) provides comprehensive coverage for high-cost medical events and a tax-advantaged way to help you build savings for future medical expenses. The HDHP gives you greater flexibility and discretion over how you use your health care benefits.

When you enroll, your health plan establishes for you either a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA). The plan automatically deposits the monthly "premium pass through" into your HSA. The plan credits an amount into the HRA. (This is the "Premium Contribution to HSA/HRA" column in the following charts.)

Preventive care is often covered in full, usually with no or only a small deductible or copayment. Preventive care expenses may also be payable up to an annual maximum dollar amount (up to $300 for instance). As you receive other non-preventive medical care, you must meet the plan deductible before the health plan pays benefits. You can choose to pay your deductible with funds from your HSA or you can choose instead to pay for your deductible out-of-pocket, allowing your savings to continue to grow.

The HDHP features higher annual deductibles (a minimum of $1,050 for Self and $2,100 for Family coverage) and annual out-of-pocket limits (not to exceed $5,000 for Self and $10,000 for Family coverage) than other insurance plans. Depending on the HDHP you choose, you may have the choice of using in-network and out-of-network providers. There may be higher deductibles and out-of-pocket limits when you use out-of-network providers. Using in-network providers will save you money.

Health Savings Account (HSA)

Health Savings Accounts are available to members who do not have Medicare or another health plan. The amount of the "premium pass through" is based on whether you have a Self Only or Self and Family enrollment. You have the option to make tax-free contributions to your account, provided the total contributions do not exceed the limits established by law, which are typically not more than the plan deductible. If you are over 55, you can make an additional "catch up" contribution. You can use funds in your account to help pay your health plan deductible. However, if you enroll in a HDHP with a HSA, you are not eligible to participate in a Health Care Flexible Spending account.

Features of an HSA include:

  • Tax-deductible deposits you make to the HSA.
  • Tax-deferred interest earned on the account.
  • Tax-free withdrawals for qualified medical expenses.
  • Carryover of unused funds and interest from year to year.
  • Portability; the account is owned by you and is yours to keep - even when you retire or leave government service.

Health Reimbursement Arrangement (HRA)

For members who are not eligible for an HSA, have Medicare or another non-High Deductible Health Plan, the HDHP will provide and administer a Health Reimbursement Arrangement.

The plan will credit the HRA different amounts depending on whether you have a Self Only or a Self and Family enrollment. You can use funds in your account to help pay your health plan deductible.

Features of an HRA include:

  • Tax-free withdrawals for qualified medical expenses.
  • Carryover of unused credits from year to year.
  • Credits in an HRA do not earn interest.
  • Credits in the HRA are forfeited if you leave federal employment or switch health insurance plans.

 

Health Savings Account (HSA)

Health Reimbursement Arrangement (HRA)

ELIGIBILITY

You must enroll in a High Deductible Health Plan. No other general medical insurance coverage permitted. You cannot be enrolled in Medicare Part A or Part B.

You must enroll in a High Deductible Health Plan or Comsumer-Driven Health Plan.

FUNDING

The plan deposits a monthly "premium pass through" into your account. The plan will send you forms to complete to establish your account.

The plan deposits the credit amount directly into your HRA. The plan will send you forms to complete to establish your account.

CONTRIBUTIONS

The maximum allowed is a combination of the health plan "premium pass through?and the member contribution up to the amount of the plan deductible.

Only that portion of the premium specified by the health plan will be contributed. You cannot add your own money to an HRA.

DISTRIBUTIONS

May be used to pay the out-of-pocket medical expenses for yourself, your spouse, or your dependents, or to pay the plan's deductible. See IRS Publication 502 for a complete list of eligible expenses. Over-the-counter drugs, for instance, are eligible expenses but health benefit premiums are not.

May be used to pay the out-of-pocket expenses for qualified medical expenses for individuals covered under the health plan, or to pay the plan's deductible.
See IRS Publication 502 for a complete list of eligible expenses. Over-the-counter drugs, for instance, are eligible expenses but health benefit premiums are not.

PORTABLE

Yes, you can take this account with you when you terminate employment or retire.

If you retire and remain in your health plan you may continue to use and accumulate credits in your HRA.
If you terminate employment or change health plans, only eligible expenses incurred while covered under that health plan will be eligible for reimbursement, subject to timely filing requirements. Unused credits are forfeited.

ANNUAL ROLLOVER

Yes, funds accumulate without a maximum cap.

Yes, credits accumulate without a maximum cap.

IMPORTANT REMINDER: This is only a summary of the features of the HDHP/HSA or HRA. Refer to the specific Plan brochure for the complete details covering Plan design, operation, and administration as each Plan will have differences.

Consumer-Driven Plans - A Consumer-Driven plan provides you with greater freedom in spending health care dollars the way you want. The typical plan has common components: Member responsibility for certain up-front medical costs, an employer-funded account that you may use to pay these up-front costs, and catastrophic coverage with a high deductible. You and your family members receive full coverage for in-network preventive care.


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