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Indiana State Personnel Department

Consumer Driven Health Plans Consumer Driven Health Plans

A consumer-driven health plan (CDHP) is an excellent option for an employee seeking to control his/her health care costs. A CDHP provides the same coverage as a Traditional PPO plan, including 100% coverage of preventive services and the premium is less expensive than the Traditional PPO.

The CDHP provided by the state of Indiana is a health insurance plan that generally pays for covered services after you, the subscriber, meet the deductible. Most subscribers save money with a CDHP, but only you can determine what health plan best meets your need.

To make that decision, you will need to analyze the costs of each plan offered by the state (CDHPs and Traditional PPO). Review the costs of premiums, deductibles and out-of-pocket maximums. Then look at what you spent or will spend by the end of 2011 in health care expenses to a better understanding of what your health care needs cost you. Be sure to utilize the Benefits Calculator to help make the best decision for you financially and health care-wise.  

CDHP rates

Plan Coverage Bi-Weekly Employee Rate Bi-Weekly Employer Rate Bi-Weekly Total Rate Annual Employee Rate Annual Employer Rate
CDHP 1 Single
Family
$30.67
$40.82
$153.35
$482.92
$184.02
$523.74
$797.42
$1,061.32
$3,987.10
$12,555.92
CDHP 1 w/ Non-tobacco incentive Single
Family
$5.67
$15.82
$153.35
$482.92
$159.02
$498.74
$147.42
$411.32
$3,987.10
$12,555.92
CDHP 2 Single
Family
$55.51
$110.90
$170.63
$517.60
$226.14
$628.50
$1,443.26
$2,883.40
$4,436.38
$13,457.60
CDHP 2 w/ Non-tobacco incentive Single
Family
$30.51
$85.90
$170.63
$517.60
$201.14
$603.50
$793.26
$2,233.40
$4,436.38
$13,457.60

Attractive features to the CDHP are less expensive biweekly premiums and the option to open a health savings account (HSA) to help pay out-of-pocket expenses. You pay the negotiated cost of all approved medical expenses (doctor visits, prescriptions, treatments, etc.) until you meet the deductible. Then the plan will pay 80% of the negotiated cost and you will be responsible for remaining 20%. After you pay the maximum out-of-pocket, the plan pays 100% of the approved costs for the remainder of 2012. However, you will still be responsible for the biweekly premium.

How does the HSA work with a CDHP?

As part of the CDHP, a health savings account (HSA) can be opened with Tower Bank (the state’s designated depository) to put money aside to pay for those out-of-pocket expenses. For 2012, the state will contribute 45% of the CDHP deductible to HSAs. Per IRS guidelines, a Traditional PPO cannot have an HSA.

Beginning with the first pay in 2012, the state will deposit one-half of its annual contribution into employee HSAs. The remaining half will be divided equally among the remaining pay periods and deposited accordingly. However, in order for the state to deposit to HSAs, you must open the HSA with Tower Bank.

State Contribution to your HSA

HSA Account Coverage Initial Contribution Bi-Weekly Contribution Monthly Contribution Maximum Annual ER Contribution
HSA 1 w/CDHP 1 Single
Family
$561.60
$1,124.76
$21.60
$43.26
$46.80
$93.73
$1,123.20
$2,249.52
HSA 2 w/CDHP 2 Single
Family
$336.96
$673.92
$12.96
$25.92
$28.08
$56.16
$673.92
$1,347.84

The IRS has set limits for the maximum that can be contributed to an HSA for 2012. For those with single coverage in a CDHP, the most that can be contributed is $3,100. Family coverage is limited to $6,250. That includes what the state deposits and what you deposit into your account. You choose how much, if any, you want to put away into your HSA, just do not go beyond the IRS-imposed limits. Those over 55 years of age are allowed to contribute an additional $1,000 for 2012.

The money in your HSA is yours to use for approved medical and dental expenses. Any balance left at the end of the year rolls over. If you leave state employment, the account and any balances go with you. Learn more about HSAs and Tower Bank by clicking on any of the links provided by Tower Bank or contact them directly.
 
You can save money with a CDHP/HSA combination, but you must first do your homework. Look at your expenses and your personal finances to determine what you can afford to put into a health savings account. Consider all the benefits and the risks of a CDHP to see if this will work for you and your family. Only you can make that determination. Take advantage of the information provided on the open enrollment website to help you in that decision.