New HSA Legislation Sweetens the Deal
President Bush’s December signing of The Tax Relief and Healthcare Act of 2006 provides employers and participants with better access to tax savings via health savings accounts (HSAs). Plus, our new HSA pricing for April 1, 2007 can save your clients even more!
Seven HSA enhancements for 2007:
- Increased contribution limit
Change: The language regarding the “lesser of the deductible or statutory maximum” has been removed. As long as enrollees purchase a qualified HDHP, they can contribute the maximum; $2,850 for individuals or $5,650 for family.
Benefits: Anyone with a qualified HDHP can contribute the maximum. This simplified rule provides significantly higher tax-free savings potential. HealthPartners will rollout more small group and EZ plan options effective 7/1/07, including more embedded deductible options.
- Simpler contribution rules for mid-year enrollees
Change: Regardless of the enrollment date in an HDHP, enrollees can contribute the maximum for the calendar year. Enrollees must stay in an HDHP for 12 months following enrollment or contributions will be taxed and include a 10% penalty.
Benefits: This eliminates the need for groups to start a plan on January 1 to get the full contribution benefit. Mid-year enrollees who are subject to the full deductible of the HDHP can now make the maximum contribution to their HSA.
- One-time rollover from FSA or HRA
Change: A one-time rollover or ‘distribution’ from the FSA or HRA will be allowed prior to 1/1/2012. The enrollee must be in an HDHP for 12 months following the rollover. The amount allowed to rollover is the lesser of the balance on 9/ 21/2006 or the balance at the time of distribution. The rollover will not count toward the annual contribution limit.
Benefits: Offers groups an opportunity to convert employees from an HRA to an HSA and still keep accumulated HRA dollars.
- FSA grace period relief
Change: Participants may now make HSA contributions during the FSA grace period if the FSA balance is $0 or the one-time rollover option is utilized.
Benefits: This provides employers with more flexibility to offer an FSA grace period and HSA.
- Earlier release of COLA
Change: HDHP index amounts including minimum deductible, maximum contribution and out-of-pocket maximums will be published in June rather than November.
Benefits: This eliminates the guesswork for groups trying to make plan-design decisions before November.
- Higher contribution limits for lower-paid employees
Change: Employers can contribute more to the HSAs of lower-paid employees than to those of highly compensated employees. Highly compensated employees are currently defined as one of the following: a 5% owner during the previous year, an employee whose compensation is greater than $100,000 or an employee in the top 20% of employees ranked by compensation.
Benefits: More options for employers to vary contributions for lower paid employees outside of a cafeteria plan.
- Tax-free transfers from IRA to HSA
Change: A one-time irrevocable transfer from an IRA to an HSA will be allowed.
Benefits: This is a great way for participants to jump start their HSA savings for health care expenses they might incur before building up an HSA balance. Participants must remain in an HDHP for 12 months following the transfer. No employer involvement is necessary.
For more information, please visit The U.S. Treasury.
HEADLINES
69 Million Reasons to Choose HealthPartners
In 2006, HealthPartners disease management, case management and generic drug programs reduced medical expenses by $69 million, while improving outcomes for members! Think about what that can do for your clients’ bottom line.
Generic = savings
With prescriptions averaging $130 for brand name and $23 per generic (off-patent), increased generic use has had a huge impact on reducing cost. With more than 5 million prescriptions dispensed, there is a $5.8 million savings for every 1% increase in generic prescriptions. With generic drug use increasing to 64% in 2006, we reduced cost by $35.4 million!
Improved behavioral health
By identifying and supporting at-risk members, improving adherence to medication and decreasing emergency room visits for depression, HealthPartners Behavioral Health Case Management program reduced medical expenses by $3.6 million in 2006.
Targeted disease and case management
With more than 100,000 participants, HealthPartners disease management programs saved $17.1 million last year by preventing medical complications and reducing medical costs. Focused inpatient and complex case management increased savings by another $17.5 million. View detailed cost savings.
When clients demand a cost-conscious solution, look no further than HealthPartners. We’re managing our cost to ensure affordable, high quality health care for your clients.
To learn more please contact your HealthPartners Sales Executive.
Brainerd Named MN Executive of the Year
When it comes to thoughtful, effective leadership, Mary Brainerd is truly No. 1. The Minneapolis/St. Paul Business Journal recently named HealthPartners CEO and President, Mary Brainerd, as the Minnesota Executive of the Year.
Since Brainerd took the helm May 1, 2002, HealthPartners revenue has grown more than 60 percent, to $2.6 billion in 2005. It’s her partnership approach that also helped solidify our national alliance with CIGNA, which increased HealthPartners membership by 70,000 on January 1, 2007. Brainerd has also taken great strides to partner with providers to further benefit members. She was a key player in developing the 10-story, $150 million inpatient expansion and renovation project for Regions Hospital in St. Paul. She's also created a great work environment for employees – HealthPartners was named one of the Business Journal's Best Places to Work in 2006.
To learn more about Mary and what you can expect from HealthPartners in the future, take a moment to read Hooked on Health Care.
Small Group Product Area Factor Update
From Rochester to Roseau and everywhere in between, we are making significant changes to our small group product pricing. Here’s what’s new for April 2007:
- The index rate was reduced by approximately 3.5%
- We’ve increased the number of rating areas and changed area factors
- The benefit relativities between products has been updated and changed, including lowering the rates of our HSA products by as much as 15% in some areas
The result is much more competitive pricing for your small group clients, especially on HSA products. Continuing favorable experience within HSA products has allowed us to price these more competitively than we have in the past. HSAs are the fastest growing products within our small employer portfolio and the new HSA legislation is sure to increase the number of groups selecting this option.
Why all the changes?
Due to the new “seven contiguous county” state statute, the first phase of our rating area realignment began January 1, 2007. The statute states that geographic rating areas must be made up of at least seven contiguous counties. To comply, we moved Le Sueur, Rice and Steele counties from Area 3 to Area 1.
We know that cost of care differs from region-to-region across the state, and this change allows us to more accurately reflect and respond to those cost differences by increasing our number of rating areas. We’ve increased our number of rating areas from three to eight in Greater MN (insurance company license) and from three to four in the extended Metro area (HMO license). Plus, we’re changing our area factors across the state to correspond with these adjustments. The pricing relativities between plans are also updated approximately every two years to account for, and adjust for, the "leveraged trend" effect of static benefit sets.
There is some overlap between the service areas for the Metro and Greater MN, so please refer to the price guides for the best available pricing in those areas.
New rates are located on the secure Broker portal. More information on price guides, rating areas and area factors are posted in the Broker Toolkit. To learn more please contact your HealthPartners Sales Executive.
Decision Support for Diagnostic Imaging
With MRI costs ranging from $250 to $2,000, we’re introducing a new decision support program for diagnostic imaging services to ensure that your clients are getting the best value for their health care dollar. When this program goes into effect February 1, 2007, it will not apply to tests performed for hospitalized patients or in emergency situations. We support doctors ordering MRI, CT scans or other advanced diagnostic imaging procedures by:
- Providing physicians with the latest medical evidence from the American College of Radiology and other sources regarding diagnostic imaging.
- Requesting physicians notify us when they order a test to confirm that our members get the right tests. (No approval is required. We simply monitor the quality of the care you receive.)
To help consumers choose the most cost effective facilities, healthpartners.com provides information on procedure cost and Best Choice providers.
Your clients and their employees have more ways to save with great new vision discounts throughout the HealthPartners vision network and some of the biggest retailers nationwide – just for being a member. Plus, it’s worth taking a second look at our deals on eyeglasses and laser vision correction from our very own HealthPartners Eye Care Centers.
For more information, talk to your sales representative or visit the eyewear discounts page.
The EyeMed Healthy Discount cannot be combined with any other discount. If a plan already includes eyewear discounts, encourage your clients to use their existing plan discounts.
Individual Products Update
To comply with recent legislative changes, we revised rate areas for our Individual Commercial products on January 1, 2007. For new members enrolling in our Individual Empower and Individual Open Access plans, counties in Rate Area 2 and Rate Area 3 have changed. This change does not affect current members.
The new rate areas are:
Area 1: Metro and all other Minnesota counties not listed in Area 2 or Area 3
Area 2: Olmsted, Winona, Dodge, Freeborn, Fillmore, Houston and Mower counties
Area 3: St. Louis, Lake of the Woods, Koochiching, Itasca, Carlton, Lake and Cook counties
Please check the Broker Toolkit at healthpartners.com for updated rate sheets for these products or call our Individual Sales Department at 952-883-5600 or 1-800-247-7015.
Network Updates
We’re committed to providing access to the providers your clients demand – nationwide. In the past two months we’ve had tremendous provider growth in Wisconsin. No matter where your clients live, work or travel, we’ve got them covered. Recent additions include:
Medical – Wisconsin
Aspirus Doctors Clinic, Inc. – Wisconsin Rapids
Aspirus Edgar Clinic – Edgar
Aspirus Family Health Specialists – Wausau
Aspirus Family Physicians – Wausau
Aspirus Freeman Adult Health – Wausau
Aspirus General Clinic – Antigo
Aspirus General Clinic – Birnamwood
Aspirus General Clinic – Elcho
Aspirus Kronenwetter Clinic – Mosinee
Aspirus Land O’Lakes Clinic – Land O’Lakes
Aspirus Merrill Clinic – Merrill
Aspirus Phelps Clinic – Phelps
Aspirus Rosholt Clinic – Rosholt
Aspirus Stevens Point Clinic – Stevens Point
Aspirus Three Lakes Clinic – Three Lakes
Aspirus Weston Clinic – Weston
Country Doc’s – Eagle River
Riverview Family Clinic – Rome Center Dr – Nekoosa
Riverview Family Clinic – WI Rapids – Wisconsin Rapids
Wausau Family Medicine – Wausau
Medical – Minnesota
Southdale Pediatric Associates, Ltd. – Burnsville
Southdale Pediatric Associates, Ltd. – Eden Prairie
Southdale Pediatric Associates, Ltd. – Edina
Dental – Minnesota
Peter A. Berven, DDS – Saint Louis Park
Dental – North Dakota
Lidgerwood Dental Clinic – Lidgerwood
Dental – Wisconsin
Michael R. Lawler, DDS – Lake Lebagamon
Midwest Dental – New Richmond
Midwest Dental – River Falls
Try out our new search function so see just how easy it is to find a network provider quickly and simply. Provider Search.
LIBRARY: QUICK LINKS TO GREAT RESOURCES
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