BlueEdge is a consumer-driven health plan that works with a spending account option — a Health Savings Account (HSA) — that you and/or your employees may fund. BlueEdge gives members control over how they spend their health care dollars and includes four major components:
Most traditional plans pay a percentage of the charges for covered medical expenses only after the member satisfies a plan deductible or copay. With BlueEdge, your employees' preventive care and wellness services are covered without first meeting the deductible. You and/or your employees may also set aside a specific amount of money each benefit year in an HSA. The HSA funds pay for other covered health care expenses that are also applied to the deductible. Your employees pay the remaining deductible amount and then PPO benefits begin. Any funds in your employees' HSAs are theirs to keep, even if they change jobs or stop working.
An HSA is a tax-favored savings account that members use with a high-deductible health insurance plan such as BlueEdge. The HSA can be established with funds from you, your employees, or both. 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 member meets the deductible.
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 However, HSA funds are not taxed when withdrawn to pay for qualified medical expenses. Employees can make withdrawals from their HSAs for nonmedical expenses, but the withdrawals will be taxed as normal income and subject to a tax penalty (if withdrawn before age 65).
At the end of each year, any unused funds in your employees' HSAs remain in their accounts and continue to earn interest tax-free.
HSA funds are portable, which means employees own their accounts. Even if employees switch jobs, the funds stay with them.
For more information about HSAs, go to www.irs.gov .
* 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.
Using funds in an HSA is easy. Typically a financial institution will provide the member with a debit card and/or a checkbook. For example: When a member needs to visit the doctor and pay for a qualified medical expense, he or she uses the debit card or check to make the payment. They will receive more information regarding how to access funds from their HSA administrator/bank.
HSAs can be used to pay for many types of medical expenses, even some that are often excluded on health insurance plans. These include:
Check with your tax advisor or go to www.irs.gov to obtain a current list of qualified medical expenses as determined by the IRS.
Members may withdraw money from their HSAs for items other than qualified health expenses; however, that money will be subject to income tax, and if the member making the withdrawal is under 65 years old, there will be an additional tax penalty on the amount withdrawn.
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 member's HSA, but may not qualify toward the deductible.
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.
No. Most preventive medical services (e.g., routine physical exams, age-based testing, and vaccinations) are covered at 100 percent under BlueEdge when the member receives care from in-network doctors. Check your group plan documents for specific coverage details.
There are three circumstances when a member will have out-of-pocket expenses:
Yes. Your employees' funds will accumulate without a maximum limit.
Your employees own their HSAs and can take them from one job to the next. They can even use their HSAs when they retire.