• Lowered their health risks:  CDHP customers lowered their risk of developing or worsening a chronic condition. According to the study, when employers fully transitioned to offering only a CDHP option, individuals improved their health risk profile by 10 percent in the first year compared to customers in a traditional plan option.
• Reduced total medical costs:  CDHP medical cost trend was 16 percent lower than traditional plans during the first year. Over five years, cumulative cost savings averaged $9,700 per employee enrolled in a CDHP compared to employees who remained in a traditional health plan. Cost reductions were achieved without employers shifting out-of-pocket health expenses to their employees.
• Received higher levels of care:  CDHP customers had consistent or higher use of over 400 evidenced-based medical best practices (than their counterparts in traditional plans.  CDHP customers also sought preventive care, such as annual office visits and mammograms, more frequently than customers enrolled in a traditional plan.
• Were more engaged in health improvement: Through proper plan design plan and the use of incentives,  CDHP customers were more likely to have completed a health risk assessment and participated in their health coaching program than those enrolled in a traditional plan.
• Were more savvy consumers of health care:  CDHP customers enrolled in their pharmacy management program were more likely to choose generic medications and had 14 percent lower pharmacy costs compared to those in a traditional plan. In addition, CDHP customers used the emergency room at a 13 percent lower rate than individuals enrolled in HMO and PPO plans.
• More likely to compare cost and quality:  CDHP customers were twice as likely to use myCigna.com online cost and quality information to help them select a doctor or to review potential medical costs than customers enrolled in traditional plans.

“Each year the evidence increasingly shows that properly designed consumer-driven health plans can lower health risks, reduce medical costs and drive engagement,” said Cigna Chief Medical Officer, Dr. Alan Muney.

Please contact Gary Whiddon at Health Plans Online for more information on Consumer Directed Health Plans.  He can be reached at (888) 474-6627 or gary@hpo.biz.

• Health Savings Accounts (HSAs) .
• Medical Savings Accounts (MSAs)
• Flexible Spending Arrangements (FSAs) .
• Health Reimbursement Arrangements (HRAs)

Searching for the “Best” Rx price has never been easier! Simply visit www.PillBot.com and type the name of the medication in a box like below and click submit. You may also conduct your search alphabetically at PillBot.com.

I did a search on the cholesterol drug, Zocor.  Here are the results.  The first line  shows 30 pills each 80 mg for $115.87 or $3.82 per pill.

• Maximum annual HSA contribution for self only coverage will be $3,100 (up from $3,050)
• Maximum annual HSA contribution for family coverage will be $6,250 (up from $6,150)
• Annual maximum out of pocket for self only coverage will be $6,050 (up from $5,950)
• Annual maximum out of pocket for family coverage will be $12,100 (up fro,m $11,900)

 Amounts that are remaining at 2011 levels: 

• Age 55 catch-up contribution will continue to be $1,000
• Minimum HDHP deductibles will remain at $1,200 for self only coverage and $2,400 for family coverage.

WASHINGTON – U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, today unveiled the Family and Retirement Health Investment Act of 2011, bicameral legislation to strengthen and expand Health Savings Accounts (HSAs) and Flexible Spending Arrangements (FSAs) for American workers and retirees. Companion legislation was introduced in the U.S. House of Representatives by U.S. Rep. Erik Paulsen (R-Minn.). “This legislation will provide American workers and retirees with a common-sense way of improving access to quality, affordable health care,” said Hatch. “These health plans empower Americans to take control of their health and well-being. Health Savings Accounts and Flexible Spending Accounts allow consumers to make informed decisions about their health care and will help restrain costs by putting people in charge of their health choices.” This year health care costs are expected to rise by eight percent, more than double the rate of inflation. HSAs and FSAs provide individuals with opportunities to put away tax free savings for everyday medical expenses. When Congress first made HSAs available, these plans only covered 454,000 lives. Today, more than 10 million people are covered under a health plan that is eligible for an HSA. The Family and Retirement Health Investment Act of 2011 will streamline these health care products and simplify them for American families, seniors, and entrepreneurs. Specifically, the legislation will: allow a husband and wife to make catch-up contributions to the same HSA remove the onerous new restrictions on the use of HSA and FSA dollars for the purchase of over-the-counter drugs allow individuals to roll-over up to $500 from their FSA accounts clarify the use of prescription drugs as preventive care that will not be subject to an HSA-eligible plan deductible reauthorize the use of Medicaid health opportunity accounts promote wellness by expanding the definition of qualified medical expenses to encourage more exercise and better diet allow seniors enrolled in Medicare Part A to continue contributing to their HSAs allow for the purchase of low-premium health insurance and long-term care insurance with HSA dollars

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To see this press release on the Senate Committee on Finance website, click here.

The current guidance modifies Notice 2010-59 and permits the use of FSA and HRA debit cards for OTC drug purchases provided:(1) a prescription is presented to the pharmacist;(2) the OTC medication is dispensed according to state prescribing laws and an Rx number is assigned;(3) records of the sale are maintained by the pharmacist and made available to the employer on request; and(4) the debit card system will not accept a charge for an OTC medication unless an Rx number has been assigned

• Over-the-counter (OTC) medicines and drugs will no longer be eligible for tax-free reimbursement from an HSA without a doctor’s prescription. This includes pain relievers, sleep aides, and cough medicines.
• Certain OTC purchases, such as insulin, bandages, and medical devices, continue to be eligible for tax-free purchase from an HSA without a prescription. Accountholders should always keep their receipts and save doctor’s prescriptions for OTC purchases with their tax records.
• The tax penalty for non-qualified distributions from an HSA will increase from 10 percent to 20 percent (for accountholders under age 65 and not disabled).
• Family insurance coverage may be extended to children up to age 26 but HSA distributions can only be made for qualified expenses incurred by tax dependents. If a tax dependent is listed on an accountholder’s federal income tax, typically their qualified expenses can be paid from the HSA.

2011 contribution limits

The Internal Revenue Service (IRS) 2011 annual contribution limits for HSAs are the same as the 2010 annual contribution limits. The 2011 minimum deductible and maximum out-of-pocket limits for HSA-compatible health plans also remain unchanged.

No Change In Contribution Amounts from 2010

What Is changing effective January 1, 2011?

• Over-the-counter medicines and drugs will no longer be considered a qualified medical expense.
• The penalty for using HSA funds for other than a qualified medical expense increases from 10% to 20%.

According to a study conducted by a large health debit card provider, losing the tax-deductible status for OTC medicines will affect only a small percentage of employee medical FSA reimbursements.  It is suggested that participants continue to make their elections as conservatively as possible, and not drastically reduce their contributions

 Insulin and all health related supplies (such as syringes) will continue to be an eligible expense.  Any OTC for which you have a physician’s prescription or letter of medical necessity will be covered as an exception.

According to a recent study, this change in law regarding FSA eligible expenses will not greatly impact the reimbursements for and tax advantages of FSA enrollment, as there will most likely be other expenses that could be used to fill any void. 

If you are enrolled in an  FSA or Health Savings Account, Health Reimbursment Account , please contact your health insurance broker or employee benefit advisor for information, or contact our office at (888) 474-6627.