2011 Purdue Choice Fund Medical Plan With Health Savings Account
- Summary of Benefits from CIGNA
- Frequently asked questions
- Pharmacy benefit
- List of preventive prescription drugs
- List of preventive health coverage
Here's how the Purdue Choice Fund with a health savings account works.
Step 1: You Pay a Portion of the Cost for Coverage
With the Purdue Choice Fund, you pay a portion of your coverage through convenient pre-tax payroll contributions, with Purdue paying the majority of the cost. Your cost for coverage is significantly less than for the Purdue Incentive plan and the Purdue Copay plan.
Step 2: Health Savings Account Is Set Up In Your Name
A bank account – called a health savings account, or HSA – is set up in your name.
Step 3: You Contribute to Your Account
You can elect to set aside dollars on a pre-tax basis through payroll deductions. You can make contributions to your account as long as the total contributions to your account in 2011 (both Purdue contributions and your contributions) do not exceed $3,050 for single coverage and $6,150 for family coverage.
Federal rules also allow what are called “catch-up” contributions to a health savings account — which means you can contribute additional pre-tax dollars if you are age 55 or older, or you will turn 55 any time during 2011. In 2011, you can contribute an additional $1,000 to your account if you are eligible for the “catch-up” contribution.
There will not be an option to change your HSA payroll deductions during 2011. If you would like to make additional contributions to your HSA during the year, please fill out the HSA deposit slip and send to CIGNA. The total of additional contributions, payroll deductions and Purdue contributions cannot exceed $3,050 for single coverage and $6,150 for family coverage.
Step 4: Purdue Contributes to Your HSA
For 2011, Purdue will contribute the following amounts to your account:
- $650 for employee only coverage
- $1,300 for family coverage (employee plus one or more dependents)
These annual contributions will be deposited in equal installments each pay period over the course of the year. New employees receive a prorated amount.
Interest and Investment Opportunities
The funds in your health savings account are invested in an interest bearing savings account. When your account balance reaches $2,000, you have additional investment options, such as a money market fund. Any earnings on those investments are tax-free if you use them to pay for eligible health care expenses.
Step 5: You Use Your HSA Dollars to Pay for Eligible Health Care Expenses
Money you withdraw from your HSA is completely tax-free as long as the money is used to pay for eligible health care expenses as defined by the IRS (known as Section 213 expenses). You can get a list of eligible expenses from the IRS at www.irs.gov. These expenses include:
- Your medical plan annual deductible and coinsurance,
- Dental and vision expenses,
- Prescription drug expenses, and
- Over-the-counter drugs, with doctor's prescription.
Important!
An employee cannot be covered under the Purdue Choice Fund plan if the person has other health insurance coverage – unless that other coverage is also an HSA-qualified medical plan. Employees who are covered by Medicare or TRICARE are not eligible for Purdue Choice Fund coverage. Employees who are not qualified for the Purdue Choice Fund coverage because they have other health insurance outside of Purdue for themselves or family, are eligible to choose a health plan with the same coverage as the Choice Fund, but that does not feature a health savings account. Contact Staff Benefits for additional information.
Employees can use the funds in their HSA to pay for the medical expenses of dependents covered by another health plan, even if it is not an HSA-qualified plan, as long as they are eligible dependents as defined by the IRS. If you use health savings account funds for non-eligible expenses, that money is taxable as ordinary income and subject to a 10 percent tax penalty.
Step 6 You Pay 100 Percent of the Cost Up to the Annual Deductible
When you need care, you pay 100 percent for all eligible medical and non-preventive prescription drug expenses up to the plan's annual deductible.
In-Network Annual Deductible:
- $1,300 employee only
- $2,600 family
Out-of-Network Annual Deductible:
- $2,600 employee only
- $5,200 family
If you choose, you can use money from your health savings account to pay for expenses that went toward your deductible. You determine how and when to use your health savings account dollars.
Step 7: You Pay Coinsurance After Meeting the Annual Deductible
Once you have met your annual deductible, you pay only 20 percent of your medical charges when using CIGNA network providers, or 50 percent of the cost when using providers outside of CIGNA's network. Non-preventive prescription drugs are covered through CIGNA at the usual prescription drug coinsurance once the deductible has been met.
Step 8: You Are Protected Against Catastrophic Expenses
To protect you from catastrophic out-of-pocket expenses, the plan pays 100 percent of your medical and prescription drug costs once you meet the annual out-of-pocket maximum.
In-Network Annual Out-of-Pocket Maximum:
- $3,300 employee only
- $6,600 family
Out-of-Network Annual Out-of-Pocket Maximum:
- $6,600 employee only
- $13,200 family
The out-of-pocket maximum is the most you will pay for medical and prescription drugs during any year.
Step 9: Preventive Care is Covered 100 Percent
Keep in mind that preventive medical care, according to CIGNA's preventive care guidelines, is always covered at 100 percent when using network providers. Preventive care includes services such as annual physicals, cancer screenings, and adult and child immunizations.
In addition, eligible generic preventive prescription drugs are covered at 100 percent without a deductible. Brand-name preventive prescriptions through a retail pharmacy are covered without deductible at 30 percent or 50 percent coinsurance, depending on the drug's tier. Brand-name preventive prescriptions through mail order are covered without deductible at 25 percent or 45 percent coinsurance, again depending on the drug's tier.
CIGNA uses Internal Revenue Service (IRS) guidance to determine which kinds of prescription drugs are considered preventive. Generally speaking, preventive drugs are those prescribed to prevent the occurrence of disease in someone who has developed risk factors, or to prevent the reoccurrence of a disease from which a patient has recovered.
Step 10: HSA Funds Remaining At End of Year Roll Over
Any HSA funds remaining at the end of the year will stay in your account for future use. There is no limit to the amount you can roll over from year to year, and you can even take your account dollars with you if you leave Purdue.
Pharmacy benefit
The 2011 pharmacy benefit for this medical plan is administered by Cigna.
Deductible Phase: You pay 100 percent of your medical and prescription drug expenses until you meet your combined medical/prescription annual deductible of $1,300/single and $2,600/family. Preventive generic medications are available for no charge during any phase of your insurance.
Coinsurance Phase: Once you’ve met your annual deductible, you pay the coinsurance amounts listed below until you reach your combined medical/prescription out-of-pocket maximum of $3,300/single and $6,600/family.
100 Percent Coverage Phase: Once you’ve reach your combined out-of-pocket maximum, including your deductible, your health plan pays 100 percent of eligible medical and prescription drug expenses for the remainder of the benefit year.
Retail pharmacy benefit:
Generic - You pay 20% (unless the drug is preventive; then you pay nothing)
Preferred Brand Name Drugs - You pay 30%
Non-Preferred Brand Name Drugs - You pay 50%
Mail order pharmacy benefit:
Generic - You pay 15% (unless the drug is preventive; then you pay nothing)
Preferred Brand Name Drugs - You pay 30%
Non-Preferred Brand Name Drugs - You pay 50%