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Healthy NY offers a high deductible health plan (HDHP) that can be used with a health savings account (HSA). As of January 1, 2012, this is only option available to new enrollees.
A high deductible health plan (HDHP) is a type of health insurance coverage that requires you to meet a deductible before most coverage begins. The HDHP has the same benefits and copayments as the standard Healthy NY plan. If the business chooses the HDHP, then this choice will apply to all covered employees.
The 2013 deductible is $1,250 for individuals and $2,500 for families. This amount is adjusted annually for inflation.
If the business chooses the prescription drug coverage, then the overall deductible of $1,250 for individual coverage or $2,500 for family coverage also applies to the drug benefit. Employees will be covered for prescription drugs once they meet the deductible. The deductible is determined on a plan year basis.
Employees are responsible for the cost of most services until they meet the annual deductible. Only expenses for services that are covered under the Healthy NY benefit package count towards the deductible. Employees can get preventive services before meeting the deductible. Preventive services include well-child visits, child immunizations, routine prenatal care, prostate cancer screening, mammograms, Pap tests, and adult checkups and immunizations.
Once employees meet the deductible, they will only pay a copayment for services.
The business may elect the HDHP or the standard Healthy NY plan when enrolling in the program or at the time of yearly recertification. The business may not switch from the standard Healthy NY plan to the HDHP at any time during the year.
If the business selects the Healthy NY HDHP, then it is suggested that employees open health savings accounts (HSAs). Employees are not required to open HSAs.
An HSA is a type of savings account used to pay for qualified medical expenses such as deductibles and copayments. Employees and employers can contribute money to an HSA. With an HSA, employees can withdraw money tax-free for qualified medical expenses, as defined by the federal government. They can also use the HSA to pay for medical expenses that are not covered under Healthy NY, such as dental and vision care and over-the-counter medication. (However, these payments will not count towards the HDHP deductible.)
Employees can open and put money into an HSA at a local or online bank. Insurance companies may also have a relationship with a bank that offers HSAs. Employees should verify any account fees with the bank before setting up the account.
If employees open HSAs, they should be sure to save receipts from their qualified medical expenses.
For 2013, employees can contribute up to $3,250 for individual coverage and $6,450 for family coverage into an HSA. The federal government sets these amounts annually.
The business can contribute to employees’ HSAs in any amount or frequency, up to the federal maximum limits. Contributions are not taxed to the business or to employees.
Employees can also roll over money from an individual retirement account (IRA), flex spending account (FSA), or health reimbursement arrangement (HRA) on a one-time basis. They may put money into the account in one lump sum or at any frequency that is convenient for them. Employees do not have to fully fund the account.
HSAs have several advantages:
For more information on HSAs, please visit the U.S. Department of the Treasury Web site.