• What is BlueEdge?
• What is a high-deductible health plan?
• What is a Health Savings Account (HSA)?
• What are the advantages of an HSA?
• Does the member have to set up an HSA before he/she starts paying for medical expenses?
• How does the member set up an HSA?
• How does the member contribute to the HSA?
• How much can the member contribute to the HSA?
• How does the member use the funds in the HSA?
• What are qualified medical expenses?
• Can the member use the HSA to pay for non-health-related expenses?
• What is the BlueEdge deductible?
• How does the BlueEdge HSA family deductible work?
• Does the member have to pay for preventive medical services funds from the HSA?
• What covered services will the member have to pay for out of his/her own pocket?
• Can the unused funds in the HSA be rolled over each year?
• For how long can the member keep the HSA?
• Can an HSA be used by individuals over age 65?
• How does the prescription drug plan work?
• What if I have questions about individual plans?
BlueEdge is a consumer-driven health plan that can be combined with a Health Savings Account (HSA) that the member funds for health care expenses. BlueEdge gives the member control over how he/she spends health care dollars and includes four major components:
- HSA funds from the member are used to pay for covered health care expenses. Money spent from this account, for covered services, counts toward the deductible.
- PPO benefits begin after the deductible is met. The member has the freedom to see any doctor without a referral.
- Preventive care and wellness visits are paid in full for in-network services – nothing is deducted from the HSA and the member doesn't need to meet the deductible to enjoy these benefits.
- Online decision resources help increase awareness and knowledge of health issues and help keep track of health care expenses.
What is a high-deductible health plan?
A high-deductible health plan features an annual deductible for individuals and families. Because the deductible is high, monthly premiums are typically lower than they are for other health plans. High-deductible health plans, like BlueEdge Individual HSA from Blue Cross and Blue Shield of New Mexico (BCBSNM), qualify to be used with a tax-advantaged health savings account (HSA).
What is a Health Savings Account (HSA)?*
An HSA is a tax-favored savings account that the member sets up with an HSA administrator/bank to use with a high-deductible health insurance plan such as BlueEdge. The money in an HSA helps pay the deductible, as well as any other eligible medical expenses (including coinsurance), that may not be covered by the health plan after the deductible is met.
An HSA is similar to an individual retirement account (IRA) because it can be invested in a variety of investment vehicles while accumulating tax-free interest. However, the HSA funds are not taxed when withdrawn to pay for qualified medical expenses. The member can make withdrawals from the HSA for nonmedical expenses, but it will be taxed as normal income and subject to a 10% penalty (if withdrawn before age 65).
At the end of each year, any unused funds in the HSA remain in the account and continue to earn interest tax-free.
HSA funds are portable, which means the member owns the account. Even if he/she switches jobs, the funds stay with the member.
For more basic information about HSAs, you can download and print out an HSA brochure (PDF) from the U.S. Department of the Treasury.
What are the advantages of an HSA?
- Control: The money in the HSA belongs to the member – he/she decides how to spend it based on health care needs and budget. The member can even use the HSA to pay the medical expenses of family members not covered by the high-deductible plan.
- Flexibility: The member can deposit (until age 65) or withdraw money any time without a tax penalty as long as the money is used for qualified medical expenses (there is a yearly maximum amount for contributions).
- The member owns it! The HSA is the member's for life. It's portable, so it can be taken from one job to the next. The member can even continue to make contributions and withdrawals. Even though the member can't make contributions once he/she reaches age 65, the HSA continues to earn tax-free interest – and can still be used to pay for health-related expenses tax-free!
- Tax Savings: An HSA lets the member put away money for medical expenses before taxes are taken out. This means that the member can set aside income-tax-free dollars in an HSA to pay for qualified medical expenses. While the HSA grows, it also accumulates interest on a tax-free basis. The member pays no taxes or penalties when he/she uses the HSA to pay for qualified medical expenses. When the member turns 65, the amount remaining in the HSA can serve as a retirement benefit by covering qualified medical costs such as deductibles and coinsurance.
Does the member have to set up an HSA before he/she starts paying for medical expenses?
Yes, if the member wants to take full advantage of a high-deductible plan that qualifies for an HSA. First the member enrolls in the high-deductible insurance plan like BlueEdge Individual HSA from BCBSNM; next he/she opens an HSA with a bank that offers HSAs; then begin paying medical expenses from the health savings account.
How does the member set up an HSA?
The member will need a health savings account to work with the BlueEdge Individual HSA health plan. He/she may choose any HSA financial administrator or set up a health savings account directly with a bank. There are national and local HSA administrators/banks that offer HSAs and/or services to support HSAs; contact information for some HSA administrators/banks is listed below. BCBSNM is not endorsing or recommending any of these entities and is providing this list as a service to our members. The member should consider the associated fees, investment choices, and debit card/checkbook options to determine which HSA is right for him/her. This list represents only those known entities that support HSAs as of the time this Web page was posted. As additional HSA administrators/banks become known to BCBSNM, we will make every attempt to update this list accordingly.
- Blue Healthcare Bank**
- AmBank**
Call Donna Monzingo or Raymond Welborn with AmBank in Silver City, NM, at 505-534-0550 or toll-free at 1-800-440-8751, for information and to apply for a Health Savings Account. - First Community Bank**
Please contact Linda Herrera (505-724-5617) or Sheila Martinez (505-724-5609) at First Community Bank in Albuquerque, NM, to obtain information and apply for an HSA. - Irwin Union Bank**
To apply for an HSA to work with an individual high-deductible health plan, call Ruby Grzelachowski at 505-563-5991 with Irwin Union Bank in Albuquerque, NM; businesses interested in setting up HSAs can call Linda Lyle at 505-563-5993.
Many banks now offer Health Savings Accounts, so the member can also check with his/her own bank.
Other resources:
How does the member contribute to the HSA?
The member may contribute money to the account by making a lump sum contribution or by making periodic payments at any time (up to the plan's annual deductible). For more information about HSA contributions, the member can contact the HSA administrator/bank or visit the U.S. Treasury Web site.
How much can the member contribute to the HSA?
Each year, individuals and families can contribute up to the amount of their plan's annual deductible or the IRS-specified contribution amount – whichever amount is lower.
How does the member use the funds in the HSA?
Using funds in the HSA is easy. Typically a financial institution will provide a debit card and/or a checkbook. For example: When the member needs to visit the doctor and pay for a qualified medical expense, he/she uses the debit card or check to make the payment.
What are qualified medical expenses?
HSAs can be used to pay for many types of medical expenses, even some which are often excluded on health insurance plans. These include:
- Health insurance plan deductibles, copayments, and coinsurance
- Prescription and over-the-counter drugs
- Dental services, including braces, bridges, and crowns
- Vision care, including glasses and lasik eye surgery
- Psychiatric and certain psychological treatments
- Long-term care services
- Medically related transportation and lodging
To obtain a current list of qualified medical expenses, go to www.irs.gov.
Can the member use the HSA to pay for non-health-related expenses?
The member may withdraw money from the HSA for items other than qualified health expenses, however, that money may be subject to additional taxes or penalties.
What is the BlueEdge deductible?
Like most other PPO plans, BlueEdge includes an annual deductible. A deductible is a fixed amount the member is required to pay before health care benefits begin. The HSA pays a portion of the deductible and the member is responsible for paying the remaining part. Please note that certain expenses can be paid from the HSA, but may not qualify toward the deductible.
How does the BlueEdge HSA family deductible work?
The family deductible is an "aggregate" deductible, which means that the entire family deductible amount must be satisfied before benefits begin for any family member.
Does the member have to pay for preventive medical services from the HSA?
No. Most preventive medical services (e.g., routine physical exams, age-based testing and vaccinations) are covered at 100 percent under BlueEdge when care is received from in-network doctors.
What covered services will the member have to pay for out of his/her own pocket?
There are three circumstances when the member will have out-of-pocket expenses:
- The member has used all of the HSA funds, but have not yet met the deductible. The member is responsible for paying for health care services until the deductible is satisfied.
- The member has met the deductible, so PPO benefits are available. If the plan includes coinsurance, the member will be responsible for paying a percentage of the charges. There is an out-of-pocket maximum, so he/she won't pay more than this amount during the benefit year as long as the member stays in network.
- Non-covered services, additional coinsurance (until the member meets the higher out-of-pocket limit) and charges in excess of our allowed amount when services are received out of network.
Can the unused funds in the HSA be rolled over each year?
Yes. The funds will accumulate without a maximum limit.
For how long can the member keep the HSA?
The member owns the HSA. It can be taken from one job to the next. The member can even use it when he/she retires.
Can a HSA be used by individuals over age 65?
Yes. Although individuals over age 65 cannot contribute to their HSA, they can continue to earn tax-free interest on the balance and can use their account to pay for health-related medical expenses tax-free.
How does the prescription drug plan work?
BlueEdge Individual HSA features a 25/50 percent prescription drug benefit.
The copayment for prescription drugs purchased through this drug plan is 25 percent of the covered charge for generic drugs and 50 percent of the covered charge for brand-name drugs. If the percentage of the covered charge falls between the minimum/maximum copayment, the member will pay the actual percentage amount.
| Program | Percentage Member Pays | Minimum Amount | Maximum Amount |
| Retail Pharmacy: Up to a 30-day supply or 180 units, whichever is less. | |||
| Generic drug | 25% | $20 | $75 |
| Brand-name drug | 50% | $40 | $125 |
| PrimeMail Pharmacy Mail-Order Service: Up to a 90-day supply or 540 units, whichever is less. | |||
| Generic drug | 25% | $40 | $150 |
| Brand-name drug | 50% | $80 | $250 |
| Prior-approved enteral nutritional products and special medical foods. | 50% | N/A – member pays 50% | N/A – member pays 50% |
The copayment will never exceed the maximum copayment listed. The copayments are applied to the medical plan annual out-of-pocket limit. The member should have prescriptions filled at a participating pharmacy (the member can see the Network Directory or search the Provider Finder®) or through the PrimeMail Pharmacy mail-order service. Coverage is always subject to the limitations of the health care plan. For some medications, prior approval, generic substitution, or quantity limits may apply. See the Prescription Drug Plan Rider for details, limitations, and exclusions.
The BCBSNM Drug List does not apply to the 25/50 Percent Prescription Drug Plan.
What if I have questions about individual plans?
For more information about our plans for individuals, please contact BCBSNM Customer Service toll-free at (800) 432-0750 or email us.
*HSAs have tax and legal ramifications. The information provided herein is for informational purposes only and is not intended as tax or legal advice. Consult a tax or legal professional for advice regarding HSAs.
**We do our best to ensure that the information on the Web sites shown above is useful, but can't be responsible for the content of those sites or any information you may take from them (please read our legal disclaimer). When you click on a site link above, it will open in a new window so that you can explore that site without having to leave here. When you are through visiting the other site, you can close that window and return to the BCBSNM site.
Learn More About BlueEdge Individual HSA:
Overview
BlueEdge Individual HSA benefit information
Is an HSA right for your client?
Helping your client set up a health plan and HSA
HSA Sales Guidelines
