How the CDHP HSA Works
The CDHP HSA combines a Consumer Driven Health Plan (CDHP) with a Health Savings Account (HSA).
- Your annual checkups and other preventive care are 100% paid by the plan.
- If you need any medical care beyond your annual checkup, you pay the full Anthem-negotiated cost out of your HSA or out of pocket until you reach your deductible.
- If you reach your deductible, you pay 20% of the cost when you use Anthem network providers.
- Certain prescription drugs are covered at 100% by the plan without having to meet the deductible; for all other drugs, you pay the full Caremark network cost until you meet your deductible--then the plan pays 80% and you pay 20%.
- If you reach your out-of-pocket maximum, the plan pays 100% of your covered medical services and prescription drugs for the rest of the year, as long as you're enrolled in the CDHP HSA.
Explore on Your Own
Why Choose This Plan?
Free Money – K-C will make a contribution to your HSA that you can save and/or use to pay for eligible health care expenses. And, it's the only plan that lets you keep those dollars, no matter what plan you choose in the future or when you leave K-C. If you don’t end up needing much care, you can continue to bank K-C’s annual contributions to your account and grow a nest egg.
Outperforms the PPO – Most employees who chose the PPO plan could have saved money if they had chosen the CDHP HSA.
You’re in the Driver’s Seat – It gives you the most control over your health care dollars. You can shop health care prices through Healthcare Bluebook, choose the best deal, and keep more money in your HSA. Learn more about money-saving tips here.
Access Your Entire Annual Contribution January 1 – You can borrow against your future contributions to your HSA. That means even if you need your full annual contribution in January, it’s available for you to use. See more details below.
Prescription Drug Expenses Count – When you use your CVS/caremark prescription drug benefit to fill your prescription, the amount you pay may count toward your deductible and out-of-pocket maximum.
Tax-free Savings – You can save money tax-free, up to IRS limits, for health care expenses now and down the road. Your HSA dollars go farther than the money in your wallet, because you don’t pay taxes on your HSA contributions. As long as you keep at least $1,000 in your account, you can invest any money over that balance. You can learn more about investing options on the ConnectYourCare website.*
Premium Advantage – Your out-of-paycheck cost for the CDHP HSA is less than half the cost of the PPO. You can enjoy more money in your pay, or you can contribute the amount you are saving to your HSA. It’s a good strategy for those who worry about having to come up with enough money to pay their deductible.
*Contributions and earnings are currently subject to state (and some local) income tax in Alabama, California, and New Jersey. Unless these states elect to change taxation of HSA contributions and earnings, state income tax will apply. If you live in Alabama, California, or New Jersey, K-C’s contribution to your HSA will be added to your state (and local where applicable) taxable earnings in the first pay period in 2017 (or after April 1 if your HSA is delayed). This means that, for one pay period, you’ll see an increase in your state (and local, if applicable) taxes. For questions about your tax withholding, call the K-C HR Contact Center at 866-444-4516, Monday through Friday from 8 a.m. to 6 p.m., ET. Consult with your tax advisor to learn more.
K-C contributes money to your account that you can use to pay for care today, or save for health care down the road - even in retirement. You can also contribute money to your HSA.
K-C's HSA Contribution**
If you’re enrolled in the CDHP HSA as of January 1, K-C gives you:
- $700 in your HSA for Individual coverage,
- $1,400 for 2-Party, and
- $1,400 for 2-Party Plus.
**If you enroll in the CDHP HSA after January 1, K-C’s contribution is prorated according to the number of full months you’re enrolled. For example, Joe is a new hire whose coverage begins March 1 at the Individual coverage level. K-C contributes $584 to his HSA ($700 divided by 12 months per year times 10 months of coverage—–March through December—–rounded up to the next dollar).
Your HSA Contribution
You can also make your own contributions to your HSA, tax free. Your contributions come out of your paycheck before taxes are taken out, which lowers your taxable income and helps you save money for future health care expenses. Or, you can go to ConnectYourCare and make additional contributions to your HSA from your personal bank account.
More About the CDHP HSA
Using the Money in Your Account
When you enroll in the CDHP HSA, an HSA will be opened with UMB Financial Corporation (UMB). Our HSA administrator, ConnectYourCare, offers online tools and information to help you manage your account.
You can also pay for eligible expenses using:
- Your ConnectYourCare payment card
- ConnectYourCare’s website or mobile app
For tools and information to help you manage your account, contact ConnectYourCare by:
- Visiting ConnectYourCare.com,
- Calling 844-594-1228, or
- Using their mobile app for smartphones.
Start With a Full Tank
In the CDHP HSA, if you're an active employee who has elected to contribute to your HSA, you can borrow against your future contributions. This way, you have the money you need to cover health care expenses before the funds are actually deducted from your paycheck and deposited to your account.
It works automatically to cover the health care expense at the point of sale. If you're paying for an eligible expense with your ConnectYourCare payment card and you don’t have enough money in your HSA, it will automatically advance funds, up to your advance limit (your annual contribution + K-C’s contribution).
If you don't have your card and pay for an eligible expense with personal funds, you can still take advantage of this feature. Just submit a reimbursement request on the ConnectYourCare website and funds will be advanced automatically.
If you use the advance, your future HSA payroll deductions will automatically repay the advance amount. In other words, your payroll deductions won't show in your HSA cash balance until your advance is repaid in full. You're required to repay advances--if you reduce your payroll deductions or leave K-C before fully repaying the balance owed, you'll receive a notice from K-C about the balance owed and how to repay the amount due.
HSA vs. FSA
There can be some confusion between the Health Savings Account (HSA) and the Flexible Spending Account (FSA – formerly Health Care Spending Account). Understanding the key differences between these two accounts is important so let’s break it down.
|Actual bank account that you own?||
|Does K-C make a contribution to this account?||
|Can funds be used to pay for all eligible health care expenses?||
DependsIf you choose the CDHP HSA and elect the FSA, your FSA is considered limited use--for dental and vision expenses only. Otherwise, if you choose the PPO, your FSA can be used to pay for all eligible health care expenses.
|Do unused funds carry over from year-to-year?||
YesUp to $500; any unused funds over $500 are forfeited.
|Do I have to send in a receipt (substantiate) to prove that I used the money?||
YesIn some situations you will have to send an itemized receipt to substantiate what you paid with your FSA funds.
K-C’s contributions to your HSA plus any contributions you make may not exceed the yearly maximum. Be sure to plan your contributions accordingly. The 2017 IRS maximum is $3,400 for individuals and $6,750 for a family.***
You can set aside an additional $1,000 if you're age 55 or older.
In addition, you cannot:
- Be enrolled in Medicare,
- Receive health benefits under TRICARE,
- Have received Veterans Administration (VA) benefits within the past three months,
- Be claimed as a dependent on another person's tax return, or
- Have a general purpose health care Flexible Spending Account (FSA) or Health Reimbursement Account (HRA) or covered under your spouse's general purpose FSA or HRA. However, you can have a Limited Use FSA.
You may use your HSA to pay for eligible expenses for your legal spouse or legal IRS dependents, even if they are not covered under your CDHP.
The IRS defines legal dependents as those who are not yet age 24 in most cases. Please note this is a different age limit than the eligibility for other benefits.
***IRS limits include K-C’s HSA contribution.