Frequently Asked Questions on COVA HDHP

Q1.

What is a high deductible health plan (HDHP)?

A1.

In general, an HDHP plan has a higher plan year deductible and a higher out-of-pocket limit on expenses before the plan pays 100% of your coverage. A deductible is the amount you pay out of pocket before the plan will pay a percentage. In most cases with an HDHP, you pay the deductible for all covered services except wellness and preventive care. An HDHP may be combined with a tax-advantaged Health Savings Account (HSA) set up through a bank or other financial institution.

Q2.

Why is an HDHP being offered to Commonwealth of Virginia employees?

A2.

Congress set up high deductible health plans (HDHPs) and HSAs as part of Medicare reform several years ago. The 2005 General Assembly passed legislation enabling the State Health Benefits Program to offer an HDHP effective July 1, 2006.

Q3.

What is a Health Savings Account (HSA)?

A3.

A Health Savings Account (HSA) is a tax-favored account that allows you to make tax-deductible contributions that can be used to pay for certain medical expenses. To qualify for an HSA, you must be enrolled in an HDHP. You own the HSA and your contributions can accumulate over the years. In addition, unlike a Flexible Reimbursement Account (FRA), you may carry over your contributions into the next plan year. Consult your tax advisor or financial institution about the special federal rules that apply to HSAs. Note: You cannot have both an HSA and a Medical FRA under the state program.

Q4.

What should I consider before choosing the Commonwealth of Virginia's high deductible health plan (COVA HDHP)?

A4.

Before enrolling in the COVA HDHP, be sure to look at the total expenses you can expect to incur under the plan. Don't forget that you may also have unanticipated expenses during the year. Also consider:

• Since Anthem Blue Cross and Blue Shield will administer the COVA HDHP, take advantage of cost estimating tools at www.anthem.com . From the Members site, select Virginia and then the Commonwealth of Virginia and The Local Choice link. Choose the Commonwealth of Virginia program, then the HDHP plan under Plan Information. Also consider:
• While there is no employee monthly premium for the HDHP this year, you need to calculate the plan year deductible and your share (20% coinsurance) of anticipated covered expenses once the deductible is met.
• If you have a catastrophic medical expense during the plan year, will you be able to pay your full deductible amount and the coinsurance all at one time?
• The HDHP must be your only health plan to qualify for a Health Savings Account (HSA). Also remember that you cannot be enrolled in both the state's Medical Reimbursement Account and an HSA.
• If your spouse is enrolled in a separate plan, what are your options for coverage through his or her employer? You cannot contribute to an HSA if you are covered by your spouse's traditional, non-HDHP health plan.
• Do plenty of research! Consult your tax advisor for more information.

Q5.

Why are the COVA HDHP deductibles so high?

A5.

An HDHP must meet certain requirements, including the amount of the deductible and maximum out-of-pocket limit, to be HSA-qualified. These plans are designed to give people an incentive to make informed health care decisions and spend dollars wisely. This year, the COVA HDHP deductible is $1,200 for an individual and $2,400 for two or more people. In addition, full-time employees will pay no monthly premium for the plan. Premium savings can be placed in an HSA to help pay for the HDHP deductible and out-of-pocket costs.

Q6.

How does the COVA HDHP deductible work?

A6.

The COVA HDHP deductible applies to covered services for medical, behavioral health and prescription drug benefits. The dental benefit has a separate deductible. For all but dental expenses, those in single membership pay the $1,200 deductible before the plan pays 80% of the allowable charge. However, meeting the HDHP deductible is a bit different for families than satisfying a traditional health plan deductible. When two or more persons are covered under the COVA HDHP, the entire $2,400 family deductible must be met before the plan pays expenses for any one person covered under the plan. For all membership levels, your deductible also applies to the out-of-pocket expense limit ($5,000 for one person and $10,000 for two or more people).

Q7.

Is there a COVA HDHP deductible for prescription drugs?

A7.

Yes. For generic drugs purchased at an Anthem participating pharmacy, you pay the HDHP deductible and then 20% coinsurance after the deductible is met. The same is true for brand name drugs that do not have a generic equivalent. However, if a brand name drug does have a generic equivalent, you pay the deductible and/or 20% coinsurance plus the difference between the allowable charge for the generic equivalent and the brand name. This difference does not apply toward the deductible or out-of-pocket expense limit. Here is an example:

Q8.

Does the COVA HDHP dental benefit have a deductible?

A8.

Yes, but it is separate from the HDHP deductible. The HDHP deductible does not apply to dental benefits. When receiving dental care for all but diagnostic and preventive services, the deductible is $25 for one person, $50 for two people and $75 for three or more people. The plan pays 100% of the allowable charge for diagnostic and preventive services with no deductible. See dental benefits on the COVA HDHP page at www.dhrm.virginia.gov for more information.

Q9.

What expenses apply to the COVA HDHP out-of-pocket expense limit?

A9.

Only certain covered expenses apply to your out-of-pocket limit each plan year. Included are your deductible and coinsurance at 20% of the allowable charge for medical, behavioral health and prescription drug expenses. Your dental deductible and coinsurance is separate and may not be counted toward your out-of-pocket limit.

Q10.

Will the plan pay my wellness and preventive care expenses?

A10.

Yes. The plan pays at 100% of the allowable charge with no deductible for the following services:

• Well-child visits (through age 6), including shots and screening tests
• Routine wellness annual check-up, shots, lab and x-ray services for ages 7 and older
• Preventive care exams and screenings, one of each during the plan year, including:
  • Gynecological exam
  • Pap test
  • Mammography screening for age 35 and older
  • Digital rectal exam for age 40 and older
  • Prostate specific antigen (PSA) test for age 40 and older
  • Colorectal cancer screening for age 40 and older

Q11.

Is there out-of-network coverage under the COVA HDHP?

A11.

No. The COVA HDHP includes out-of-network coverage only if there is an emergency. However, you have access to the Anthem BlueCard and BlueCard Worldwide networks for care outside Virginia. You may go outside the network for dental or prescription drug benefits, but you will pay more for your coverage.

Q12.

Can I purchase additional coverage under the HDHP, like that available from COVA Care?

A12.

No. The HDHP has no additional coverage options for purchase.

Q13.

What are the differences between COVA Care and the COVA HDHP?

A13.

For a side-by-side comparison, visit the Summary of Benefits on the COVA Care or COVA HDHP Web pages at www.dhrm.virginia.gov . Other resources are the COVA Care Member Handbook and the Understanding the COVA HDHP brochure.

Q14.

How do I enroll in an HSA?

A14.

Enroll individually in an HSA through your bank or other financial institution. For more information on an HSA and the federal rules that apply, consult your tax advisor .

Q15.

Where can I receive additional information about an HSA?

A15.

Before you choose an HSA, take time to learn more about these accounts. They are offered by many banks and other financial institutions. You may also find more information on the Web. Some government-sponsored sites include:

• www.irs.gov - information on how HSAs impact your federal taxes and qualified medical expenses. Search using the keyword "HSA" and review Publications 969 and 502 in particular.
• www.hhs.gov - general information about HSAs and other tax-favored plans. Search using the keyword "HSA".
• www.ustreas.gov/offices/public-affairs/hsa/ - general information and guidance on HSAs.
• http://www.ustreas.gov/offices/public-affairs/hsa/faq.shtml - frequently asked questions on HSAs.