The Blue Shield Health Savings Plan (HSP) is a high-deductible PPO (preferred provider organization) paired with a health savings account (HSA), a federal tax-free account maintained by Health Equity, to help pay your out-of-pocket costs.
How the HSP plan works with the HSA
- As an HSP member, you can use your HSA funds to pay for your plan’s deductible and/or out-of-pocket maximum for all eligible health care expenses. For a complete list of eligible expenses, read the IRS Publication 502 on the IRS website.
- To pay for medical services under this plan, these are the steps:
- Visit a provider and receive the services.
- Your provider bills Blue Shield of CA.
- Blue Shield sends you an Explanation of Benefits (EOB).
- Your provider sends you an invoice.
- Pay your invoice with your HSA. Use your HSA debit card or pay your provider directly through healthequity.com or use another method of payment and reimburse yourself through healthequity.com.
- To pay for pharmacy services or products, these are the steps:
- Fill or refill a prescription.
- The pharmacy verifies your pharmacy coverage and provides a cost for your prescription(s).
- Pay for prescription with your HSA funds. Use your HSA debit card or pay your provider directly through healthequity.com or use another method of payment and reimburse yourself through healthequity.com.
- You can choose any doctor or hospital you wish, but services obtained from providers in the Blue Shield PPO network cost less.
- Preventive care from in-network providers is covered at 100% without the need to meet your deductible.
- For all other services and prescriptions, you pay 100% of the cost, until you meet the deductible.
- Once you meet the deductible, you pay 20% for Blue Shield PPO network providers and 40% for out-of-network providers.
- The in-network deductible is $1,300 for individual coverage and $2,600 for family coverage; the out-of-network deductible is $2,500 for individual coverage and $5,000 for family coverage.
- Annual out-of-pocket maximums limit what you pay for covered services. If you reach the annual maximum, the plan pays 100% of your medical and prescription drug costs for the rest of the year. The maximums for in-network services are $4,000 for individual coverage, $6,400 for family coverage; out-of-network maximums are $8,000 for individual, $16,000 for family.
- Behavioral health benefits from both in-network and out-of-network providers are provided by Optum. Optum providers' services generally cost less, but you may also use out-of-network providers. Costs are included in your deductible and out-of-pocket maximums.
- If you are already enrolled in Medicare, you cannot enroll in this plan, according to the IRS. Medicare eligibility usually begins at age 65 and you can be retroactively enrolled in Medicare Part A, unless you can postpone your Medicare enrollment. Medicare Part A is mandatory for those who receive Social Security income. Check with Social Security to determine your eligibility to postpone Medicare enrollment.
- Due to the UC contribution to your HSA, if you cover a family member and he/she is enrolled in Medicare, you cannot enroll in this plan unless you de-enroll your Medicare-enrolled family member from your coverage. Remember that the entire UC contribution is deposited automatically at the beginning of the year and is based on your coverage level.
The Health Savings Account
- The Health Savings Account (HSA) by HealthEquity allows you to pay for your out-of-pocket health care expenses with tax-free dollars. You can use the funds at any time for qualified medical expenses or save them for future health care needs. For a complete list of eligible expenses, read the IRS Publication 502 on the IRS website.
- You file claims directly with Health Equity. You can save your receipts or upload them to the HealthEquity website.
- Your HSA has a “use-it-or-keep-it” feature, so your account balance rolls over annually and continues to grow tax-free.
- The IRS sets the contribution limits each year. For 2016, it is $3,350 if you only cover yourself under the HSP and $6,750 if you cover at least one other family member. This contribution limit includes funds from all sources, including the UC contribution.
- UC contributes to the HSA (up to $500 for individual coverage/$1,000 for all other coverage) and you can, too, with pre-tax payroll deductions, subject to payroll deadlines. See the appropriate UC contribution in this schedule. Remember to reduce your total contribution by the amount UC contributes to your HSA to comply with the IRS. Individuals age 55 and older can make an additional "catch-up" contribution of $1,000 using the UPAY850 form (employees only).
- Retirees make after-tax contributions directly to HealthEquity and take the tax benefit when filing federal income taxes.
- You own the account, so the money goes with you when you leave the HSP or when you end your employment with UC. You can continue to contribute to it as long as you are enrolled in a qualifying high-deductible health plan — even into retirement. You can also continue to use your funds for eligible health care expenses even if you can no longer contribute to the HSA.
- When you’re ready to use your funds, you can take them out of your HSA without paying any federal taxes.
- You earn interest on your account, and can invest any funds in excess of your $2,000 balance — the same way you invest funds in retirement savings accounts, except interest accrues federal tax-free.
- Contributions and earnings are currently subject to California income tax.
- You must have a valid Social Security number and U.S. address to establish your HSA.
- You cannot enroll or have any balance as of December 31 in UC's Health Flexible Spending Account (FSA) if you enroll in the Blue Shield Health Savings Plan effective January 1 of the following year.
- If you enroll in the Blue Shield Health Savings Plan any time after January, your HSA will be prorated for the calendar year based on this schedule. However, the plan deductible is not prorated. If you continue the plan the following year, you will receive the full HSA beginning January 1.
- Here are a few things to keep in mind if you decide to become an HSP member. You are responsible in administering your Health Savings Account (HSA). As an HSA owner, you decide:
- Whether you are eligible to make contributions to an HSA
- The amount of the eligible contribution to the HSA for any calendar year
- The withdrawal of any excess contributions
- How funds in your HSA will be spent, and
- Whether the distributions from your HSA are taxable or non-taxable.
- You cannot delegate these responsibilities to either the University or to HealthEquity. Since as HSA owner, you are in control of the HSA, you are responsible for reporting all contributions and distributions to the IRS on your Form 1040. If you make any errors and did not correct them timely, you must pay additional tax and/or penalties to the IRS.
Best fit for you if:
- You want direct access to all providers without need for referrals
- You want federal tax-free savings for current and future health care costs
- You are able to risk incurring greater out-of-pocket costs
- You want to build a retirement savings for future health care costs for you and your eligible family members
Monthly plan costs
|Pay Band (per annum)||Self||Self +
|$51,000 and under||Employee Cost||$15.78||$28.40||$34.56||$47.17|
|$153,001 and above||Employee Cost||$127.14||$228.85||$267.04||$368.74|
Typical out-of-pocket costs
Once you've met the deductible, you pay:
- Office visit/urgent care visit: preferred provider: 20%; non-preferred provider: 40%; (in-network preventive care has no charge)
- Emergency room: 20%
- Hospital stay: 20% in-network; 40% out-of-network
- Prescription drugs: 20% if purchased from in-network pharmacy; 40% from out-of-network pharmacy