Cigna High-Deductible Health Plan with a Health Savings Account
The Cigna High-Deductible Health Plan (HDHP) with a Health Savings Account (HSA) offers a different approach to how you pay for your health care. There are two separate components of this plan that interact with each other; the health plan and the bank account.
The Cigna High-Deductible Health Plan
Veritas offers a qualified HDHP which utilizes the Cigna network of doctors, facilities and hospitals. This plan is designed so that there are no first dollar benefits like copayments prior to you meeting your annual deductible. All coverage (except in-network annual preventative care), including coverage for prescriptions, is subject to the annual deductible.
Copayments and coinsurance apply AFTER your deductible is met. You pay the Cigna negotiated rate for services such as office visits, lab work, tests, prescriptions, etc. until you meet your deductible. Once your deductible is met, then the applicable coinsurance or copayment will apply.
In-network annual preventative care is covered 100% by the Cigna plan.
The Health Savings Account with HealthEquity
The qualified HDHP plan allows you to open an HSA with HealthEquity. You can put money into this account on a pre-tax basis to use when paying for qualified medical, dental and vision expenses. Veritas will also contribute an upfront cash deposit into your HSA at the beginning of 2017. New hires will receive the Veritas upfront cash deposit into their HSAs shortly following enrollment.
You own the HSA account and all of the money deposited into it is yours to keep. The money is available in your account as soon as it is deposited, just like your checking account. You will receive a debit card to use on qualified medical, dental and vision expenses. Any unused funds will roll over from year-to-year. An HSA allows you to build long term savings for future medical, dental and vision expenses. Additional information about the HSA can be found on the Veritas Health Equity site.
How the Plan and Account Work Together
When you seek services, such as a doctor visit or pick up a prescription, you will present your Cigna medical ID card. The provider or pharmacy will be able to verify your coverage in the Cigna system. If you have not met your deductible, you will pay the negotiated rate for the service or prescription. If you have money in your HSA account, you can use the HSA debit card to pay for the service or prescription. For more information on how the HDHP and HSA work together, please review the videos below.
What to Do When: You're Seeking Medical Care
*All states (except Utah) use the Open Access Plus with CareLink network; Utah uses the PPO network.
Employee Cost Per Pay Period 2017
Cigna Group Number - 3338943
How the Cigna HSA works
*Note that both your contributions and those from Veritas count toward the annual IRS limit. If you're over age 55, you may contribute up to an additional $1,000 in "catch-up" contributions to your HSA.
Advantages of the HSA Plan
You may be one of those people who rarely use medical benefits. With the rollover feature, the money in your HSA always belongs to you - even if you change to a different medical plan in the future, retire or leave Veritas.
The unused funds in your HSA roll over each year and remain available to pay for qualified expenses. Even if you enroll in a non-HSA plan in future years where you are unable to keep contributing to your HSA, you will still be able to use your HSA funds to pay for qualified expenses.
Remember, HSA funds are automatically deducted from your paycheck and deposited into your HSA on a pre-tax basis, so you save on income taxes. Also, any interest or earnings on your money build tax-free, and you can withdraw the money tax-free to pay for eligible health expenses.*
*If money is used for ineligible expenses, you will pay ordinary income tax on the amount withdrawn in addition to a 20% penalty if you are under age 65.
Enroll in a Limited Purpose Flexible Spending Account (FSA)
If you elect the new Cigna HSA medical plan, you may enroll in a new Limited Purpose FSA, which allows you to set aside additional tax-free dollars to pay out-of-pocket costs for dental and vision expenses only, up to a $2,550 maximum. Medical and prescription drug expenses are not reimbursable through this account. Since an HSA is a tax-advantaged account, you are not eligible to enroll in a regular Health Care FSA due to IRS regulations.
Cigna HSA Plan Covered Services
For detailed information about services covered under the Cigna HSA Plan, including Behavioral Health benefits, refer to the Plan Comparison Chart (pdf). Below are some coverage highlights.
Online Resources - mycigna.com
You can visit mycigna.com at any time to find out more information about Cigna plans and take advantage of tools and programs to help you make important lifestyle and health care decisions. Once you're at the site, register to enroll.
Health Savings Accounts - Frequently Asked Questions
Q: What happens to my existing Cigna Health Reimbursement Account (HRA) balance if I enroll in the Cigna Health Savings Account (HSA) Plan for 2017?
A: If you enroll in the Cigna HSA Plan, you cannot carry over your Cigna HRA balance. The funds will remain with Veritas and you will forfeit them. You can check your current HRA balance on mycigna.com, selecting “Review My Coverage” then choosing “Health Reimbursement Account (HRA)”.
Q: Am I being penalized if I switch over from the Cigna HRA Plan to the Cigna HSA Plan?
A: It is not the intention of our long-term benefits strategy to penalize employees. We want to encourage employees to lead a healthy lifestyle. The wellness credits that you are able to earn outside of any plan contributions show this commitment.
Just as you’ve built up a balance in your HRA, the same can happen with the HSA plan as well. The main distinction is that the HSA will have actual cash in it that will not only accumulate tax free, but earn interest tax free too. This will provide for even more savings long term, as the unused funds in your HSA roll over each year and remain available to pay for qualified medical, dental and vision expenses, even if you switch to a different medical plan, leave Veritas or retire. You can also grow your HSA through investing once your balance reaches $2,000.
Also note, the Veritas contribution to the HSA in 2017 will exceed the Veritas contribution to the HRA in 2017. With your HSA, you get to decide how to use the funds in your account. Currently the funds in your HRA can only be accessed at the point in which you have a medical claim. We recognize that employees, such as yourself, may have a balance in their HRA currently which is why the plan will be available through Dec 31, 2018.
Cigna, nor Veritas benefits from any funds that are forfeited in an employee’s HRA. The HRA funds that are pledged for future claims will go back to the plan and will help the overall sustainability of plan (keeping deductibles low, coinsurance high, payroll deductions low, etc.).
Q: Can I have an HSA account and not enroll in the Cigna HSA Plan?
A: No. There are two components that make up the offering. There is the health plan and the bank account. In order to open an HSA, you must be enrolled in a qualified high-deductible health plan. This plan cannot have any first dollar benefits like co-payments prior to meeting the annual deductible. All coverage (except in-network annual preventative care), including coverage for prescriptions MUST be subject to the annual deductible.
Q: Can I use money in my HSA for my dependents’ qualified medical expenses even if they're not enrolled in the Veritas Cigna HSA Plan?
A: You are able to use funds in your HSA for your tax-qualified dependents regardless whether they are enrolled in the Veritas Cigna HSA plan. While the funds in your HSA can be used for eligible medical expenses, it is up to you to ensure the funds are used for your IRS-defined tax dependents. Please consult a tax advisor for further clarification.
Q: How are my prescriptions covered under the Cigna HSA plan?
A: You must first meet your annual deductible before the applicable copayment or coinsurance applies. You will pay the Cigna negotiated price for the prescription which will go towards your annual deductible. For example, the retail cost for 30 tablets of Synthroid 100mcg in Sanford, FL at Walgreen’s is $51.99, while the Cigna negotiated rate at that same pharmacy is $33.23. You would pay the $33.23, which would go towards your annual deductible.
Q: Can I be enrolled in the Cigna HSA plan and enrolled under my spouse’s plan as secondary coverage?
A: In most instances, no. This restriction applies to the HSA bank account, which is governed by the IRS and is automatically opened on your behalf once you enroll in the Cigna HSA Plan. Therefore, whether you are contributing to the HSA or just receiving the Veritas contribution, you cannot have other coverage. An exception to this rule applies when that other coverage is a qualified high-deductible health plan. So, if your spouse is enrolled in an HSA-qualified plan, then the answer is yes.
Q: How much will Veritas contribute to my HSA?
A: $750 for employee only coverage, $1,500 for employee + spouse/domestic partner coverage, $1,500 for employee + child(ren) coverage and $2,250 for employee + family coverage. The Veritas contribution will be deposited into your HSA account by January 1, 2017 for existing employees who enroll during the 2017 Open Enrollment.
Q: What happens to money in my Health Care FSA that I want to carry over if I enroll in the Cigna HSA Plan?
A: If you enroll in the Cigna HSA Plan, you will only be able to enroll in the Limited Purpose FSA. If you have money in your 2016 Health Care FSA and you enroll in the Limited Purpose FSA for 2017, you can carry over up to $500 into your Limited Purpose FSA. The money you carry over into the Limited Purpose FSA can only be used for dental and vision expenses. You will not be able to use your carry over funds for medical expenses.
Q: If I am enrolled in the Cigna HSA Plan and cover my spouse/domestic partner, can my spouse/domestic partner have a flexible spending account (FSA) to cover their co-payments and deductibles?
A: Yes, your spouse can have a limited purpose FSA with their employer to cover their dental and vision care co-payments and deductibles. However, medical expenses cannot be reimbursed from their limited purpose FSA.
Q: If I have a domestic partner, can I enroll in the Cigna HSA Plan and use the HSA funds for their medical expenses?
A: While you can enroll in the Cigna HSA Plan and open an HSA, you can only use money in your HSA for a tax-qualified dependent. If your domestic partner meets the IRS definition of a tax dependent, then you can use money in your HSA for their medical expenses. If they are not considered an IRS tax dependent, then you may still use money in your HSA for their expenses but you will have to pay tax on the expenses in addition to a 10% tax penalty. You will receive the employee + spouse/domestic partner Veritas contribution and be able to contribute up to the family limit into your HSA. Remember, it is your responsibility to ensure you are using money in your HSA for an IRS tax dependent to avoid additional tax and penalties.
Q: If the doctor’s office bills you an incorrect amount which results in you paying more out of your Health Savings Account (HSA) what happens?
A: We’d recommend not paying the doctor’s office until they bill the claim with Cigna. Some doctor’s offices will do this, while others will ask for some payment up front. If you need to pay, pay a “copay equivalent” of say $50 or $60. This amount can then be used to offset the amount you will owe. Some doctor’s will even do a calculation to give an estimate of what will be owed but it all depends on the provider. In the event you do pay more for services out of your HSA than you should have, then the doctor’s office can refund the money back to your HSA card. If it’s a refund check then that money should be deposited back into your HSA.
Q: Is there a document given at the end of the year showing HSA utilization and what it was used for e.g. eligible expenses?
A: You’ll be sent a form 1099-SA from HealthEquity around the same time you receive your W-2 which will show the total distributions from the HSA during the year. It will not separate those into eligible and ineligible expenses, you should keep track of that separately. Veritas will also have Cigna claim feed into HealthEquity so all of your medical and Rx claims will be securely housed on their site for tax purposes. If you use the funds outside the Cigna plan for dental or vision expenses, you will need to keep the receipts to show as substantiation. If you use the funds for non-qualified expenses, he will have to report it to the IRS. Most tax preparation software is intuitive and will ask if you had an HSA in that tax year. If the answer is yes, it will walk you through questions that help prepare the worksheet that gets filed along with your taxes. One of the questions is if the disbursements (which will show on the 1099) were for qualified expenses.
Q: How does Health Equity deal with situation where the debit card is compromised?
A: Like other similar entities, HealthEquity has identified an increase in phishing and fraud attempts with their health savings accounts (HSAs). HealthEquity is confident that their systems have not been breached. Through forensic investigation and research, HealthEquity has determined that fraudsters are illegally obtaining personal information from outside sources to compromise accounts. HealthEquity continuously monitors all accounts for fraudulent activity and will take necessary steps to protect funds and personal information, such as freezing an account and verifying large dollar transactions. They can be reached 24/7 and can quickly react to any fraud notifications.