What is the Consumer Driven Health Plan (CDHP)?

The Consumer Driven Health Plan (CDHP) is a qualified high-deductible health plan coupled with a tax-favored health savings account (HSA) or health reimbursement arrangement (HRA). Individuals covered as “self-only” have an individual deductible amount and those covered as “family” (self plus one other individual) have a family deductible.

Category: CDHP with HSA or HRA

What is a Health Savings Account (HSA) and am I eligible to sign up for one?

A Health Savings Account is a tax-exempt account that you can use to pay or reimburse yourself for certain medical expenses you incur.

HSAs are employee-owned accounts, meaning the funds in the HSA remain with the employee and will carry over from one year to the next (i.e., will not be forfeited unless there is no account activity for a 3-year period then the funds will be considered abandoned per NRS 120A.500 and subject to forfeiture by the State). Contributions to the HSA grow tax free and are portable. When an employee retires or terminates employment, the employee keeps the funds in the HSA. The employee can continue to use the funds in the HSA for health care and other qualified medical expenses after employment ends.

There are limits on the amount an eligible individual can contribute to an HSA based on the employee’s coverage tier. For example, “self-only” or “family” coverage.

• Self-only coverage means an eligible individual (employee)
• Family coverage means an eligible employee covering at least one dependent whether that dependent is an eligible individual (for example, if the dependent has Medicare) or if that other person is claimed on your tax return and not claimed as a tax dependent on someone else’s return.

You must be an eligible individual to qualify for an HSA. Employees may not establish or contribute to a Health Savings Account if any of the following apply:

• The employee is covered under other medical insurance coverage unless that medical insurance coverage: (1) is also a High Deductible Health Plan as defined by the IRS; (2) covers a specific disease state (such as cancer insurance); or (3) only reimburses expenses after the Deductible is met;
• The employee is enrolled in Medicare;
• The employee is enrolled in Tricare;
• The employee is enrolled in Tribal coverage;
• The employee can be claimed as a dependent on someone else’s tax return unless the employee is Married Filing Jointly;
• The employee or the employee’s Spouse has a Medical Flexible Spending Account (excludes Dependent Care or Limited Use Flexible Spending Accounts);
• The employee’s Spouse has an HRA that can be used to pay for the medical expenses of the employee; The employee is on COBRA; or
• The employee is retired.

Categories: CDHP with HSA or HRA & Health Savings Account (HSA)

 

What is the Consumer Driven Health Plan Health Reimbursement Arrangement (HRA)?

Health Reimbursement Arrangements (HRAs) are PEBP-owned pass-through accounts established on behalf of eligible CDHP primary participants. HRA funds may be used to pay for qualified medical expenses.

Categories: CDHP with HSA or HRA, Health Reimbursement Arrangement (HRA)

Is vision care covered under the CDHP?

Yes, however, PEBP does not maintain a network specific to vision care. Out-of-network providers will be paid at usual and customary rate (U&C). The participant and enrolled dependents are provided one annual vision exam where the plan pays 80% after the deductible is reached. There is no benefit for hardware including contacts, glasses, and lenses but you can use your HSA/HRA funds to help cover these costs.

Need additional vision coverage? VSP offered through Corestream is an additional voluntary benefit that participants can enroll in during the new hire, or open enrollment events.

Category: CDHP with HSA or HRA

Are routine laboratory tests covered under the CDHP, LD or EPO?

Routine lab tests associated with wellness services as defined by the CDC are covered under the wellness benefit if performed at a free-standing laboratory facility. Lab tests not associated with wellness services are subject to deductible and coinsurance. Note: lab tests provided in a hospital setting are not covered, except when lab tests are performed for pre-admission testing, inpatient admission, and urgent or emergency care. Exceptions to this provision apply for participants residing in rural areas where there are no free-standing laboratories within 50 miles; thus, requiring lab services to be performed in a hospital setting.

Categories: CDHP with HSA or HRA, EPO, & LD

Is there a cost difference between using an outpatient lab at a hospital versus a free-standing lab such as LabCorp or Quest?

Generally, hospitals charge substantially more for these services than stand alone laboratories. Some physicians may refer a patient to the hospital for lab testing; however, to reduce out-of-pocket costs the member should request a referral to a stand alone laboratory. Most hospital based lab services except for pre-admission testing, urgent care, and emergency lab room services are not covered. Laboratory outpatient services at a free standing, in-network facility such as Lab Corp or Quest are subject to the deductible and/or co-insurance/co-payment.

Categories: CDHP with HSA or HRA, EPO, HMO, & LD

I want to make an appointment at the doctor's office and I have the Consumer Driven Health Plan (PPO), what is the name of my plan?

Your plan is with the State of Nevada under UMR. Northern Nevada and out-of-state members will utilize the UMR UnitedHealthcare Choice Plus Network. Southern Nevada members will utilize the UMR Sierra Health-Care Options. PPO members are encouraged to confirm the network status of provider(s) before receiving health care services. You can search for in-network providers on the Find a Provider page.

Category: CDHP with HSA or HRA

What is Doctor on Demand?

Doctor on Demand connects CDHP, LD, and EPO plan participants face-to-face with a board-certified doctor or licensed psychologist (by appointment) on your smartphone, tablet or computer through live video. To learn more – and see a short video showing what an experience is like, go to Doctor on Demand's website. For technical support information please click the link below.

Categories: CDHP with HSA or HRA, EPO, & LD 

What doctors can I go to if I am on the Obesity Care Management Program?

Obesity Care Management Program providers can be found on PEBP’s Find a Provider page.

What is the FSA? Does it have anything to do with the HSA or HRA?

Non-state and NSHE employees are ineligible for the PEBP sponsored FSA but may be eligible through a similar program offered by their employer. The HealthCare FSA is a tax-free account that allows a person to pay for essential health care expenses that are not covered or are partially covered by your medical, pharmacy, dental and vision plans. The FSA plan year is July 1 through June 30 of the following year. Flexible Spending Account open enrollment is usually held in May each year. To participate in an FSA, you must enroll during open enrollment each year for the upcoming plan year, within 60 days of your hire date, or during certain qualifying life events. For more information regarding FSAs contact UMR at 1-888-763-8232.

The FSA is a use it or lose it account and the HSA/HRA rolls over from year to year, month to month. The FSA allows for a limited amount of funds to roll over from year to year.

An HSA is a Health Savings Account that also receives tax-free contributions from PEBP but also allows the participant to make voluntarily contributions to their HSA through pre-tax payroll deductions. If you leave State service, the money will stay with you until it is spent by you. Not everyone is eligible for an HSA.

An HRA is a Health Reimbursement Arrangement with only PEBP contributions. You are not eligible to make your own contributions to this account. If you leave State service, this money will revert to the State. Everyone enrolled in the CDHP PPO plan is eligible for an HRA.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), Health Savings Account (HSA), HMO, LD

What is a Medical Flexible Spending Account (Medical FSA)?

The Medical FSA is a tax-advantaged account that allows employees to set aside a portion of earnings to pay for qualified health care expenses that are not paid by insurance (i.e. copayments, deductibles, and coinsurance). An FSA may also be used to pay for things like prescription eyeglasses and Lasik surgery. Generally, allowable items are the same as those allowed for the medical tax deduction.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO, & LD

What is a Limited Purpose Flexible Spending Account (Limited Purpose FSA)?

The Limited Purpose FSA is a tax-advantaged account that allows employees to set aside a portion of earnings to pay for out-of-pocket dental and vision expenses. Employees who contribute to an HSA may also elect the Limited Purpose FSA. For more information, contact UMR at 1-888-763-8232.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO, & LD

What is a Dependent Care Flexible Spending Account (Dependent Care FSA)?

A dependent care FSA provides a way to pay dependent care expenses and lower your taxable income. You direct part of your before-tax pay into a special account to pay work-related dependent care costs. You can use your account throughout the year to help pay for eligible expenses. Your expense must be for the purpose of allowing you and, if married, your spouse to be employed. Members can enroll in an FSA during a new hire event, open enrollment, or during a qualifying life event. For more information, contact UMR at 1-888-763-8232.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO, LD

Is there a cost to participate in the FSA?

You pay a small administration fee of $3.15 per month to participate in either one or both (medical and/or dependent care) flexible spending accounts.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO & LD

What are the risks of participating in a health care or dependent care FSA?

FSA dollars are “use-it-or-lose-it” funds. For PY24, account balances greater than $610 cannot be carried over into the following plan year for Health Care and Limited Purpose FSAs. For dependent care FSAs, $0 can be carried over to the next plan year, so it is important to only contribute what you know you will use. If you have any unused funds exceeding the limit at the end of the plan year (end of grace period), those funds will be forfeited per IRS requirements.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO & LD FAQs

How may I use a Flexible Spending Account (FSA) to offset costs for orthodontic services?

A flexible spending account is a financial account you put money into that you can use to pay certain out-of-pocket healthcare and dependent care costs. You don’t pay taxes on this money. With an FSA, you can set aside up to $3,050 in pre-tax wages during PY24 for out-of-pocket medical expenses. The amount limits are subject to change annually. Depending on your tax bracket the tax savings could cover from 18 to 35 percent of the cost. What many people don’t know is that your FSA funds can help offset the high cost of orthodontic services as well.

Single Year Savings Comparison

 

Without an FSA:
$212.50 Monthly budget for orthodontic expenses
– $46.75 Taxes deducted on $212.50 (federal tax rate of 22%)
$165.75 Amount left for out-of-pocket orthodontic expenses

With an FSA:
$212.50 Monthly FSA deposit for orthodontic expenses
– $0.00 Taxes deducted on $212.50
$212.50 Amount left for out-of-pocket orthodontic expenses

Annual Savings (Example):
$46.75 x 12 = $561
Use $561 towards orthodontic expenses from income tax savings using a flexible spending account.

Categories: CDHP with HSA or HRA, EPO, Flexible Spending Account (FSA), HMO & LD FAQs

If my spouse has a Medical Flexible Spending Account, am I eligible to contribute to an HSA?

No. If your spouse has a Medical Flexible Spending Account you are disqualified from establishing and/or contributing to an HSA.

Categories: CDHP with HSA or HRA, Flexible Spending Account (FSA), Health Savings Account (HSA)

What happens to my HSA if I am no longer an eligible individual? For example, I change coverage from the CDHP to the LD, EPO or HMO, or I enroll in Medicare?

If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses, however, you can no longer contribute money to your HSA.

Categories: CDHP with HSA or HRA, EPO, Health Savings Account (HSA), HMO, LD, & Medicare

How are HSA withdrawals monitored? Is there an expense verification process like an FSA or HRA?

Verification of expenses is not required for HSAs. However, total withdrawals from your HSA are reported to the IRS on Form 1099-SA. You are responsible for reporting qualified and non-qualified withdrawals when completing your taxes. You are also responsible for saving all receipts as verification of expenses in the case of an IRS audit.

Categories: CDHP with HSA or HRA, Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), & Health Savings Account (HSA)

What happens if I use my HSA funds for ineligible expenses?

An HSA allows you to withdraw funds for any reason. However, you would need to pay ordinary tax and an additional penalty of 20% on any funds that are withdrawn for an ineligible expense.

You are responsible for determining if an expense is an eligible medical expense and maintaining receipts for tax reporting and potential IRS audit purposes. At age 65, funds can be withdrawn for any reason and only ordinary tax applies.

Categories: CDHP with HSA or HRA & Health Savings Account (HSA)

If I use funds from my HSA for medical expenses, can I claim them as a deduction on my income tax?

No. Since eligible expenses are paid with tax-free dollars from your HSA, you cannot claim the same expenses on your income tax return.

Categories: CDHP with HSA or HRA & Health Savings Account (HSA)

If I am enrolled in single coverage under the CDHP, can HSA funds be used for my spouse or eligible dependents that are not covered under my health plans?

HSA funds can be used for you, your spouse, or eligible dependents (as identified on your Federal tax return) even if they are not covered under your CDHP coverage.

Categories: CDHP with HSA or HRA & Health Savings Account (HSA)

What happens to my HSA funds when I retire?

HSA funds are portable. At retirement, you will retain any funds in your HSA. You may also continue to use HSA money to pay for out-of-pocket health care expenses.

Categories: Health Savings Account (HSA), Retirees

Do I need to be a United States citizen to open and contribute to an HSA?

In general, you must be a United States citizen, green card holder, or a United States resident to participate. An HSA cannot be opened without a verifiable United States residential address and a valid United States Social Security Number.

Categories: CDHP with HSA or HRA & Health Savings Account (HSA)

What is the last-month rule as it pertains to an HSA?

The last-month rule states that if you are covered by an HSA-eligible health plan on the first day of the last month of a given year, you are considered an eligible individual for the entire year. In turn, you can then contribute to the HSA for that full year.

Example: If you enrolled in the CDHP on July 1, 2023, and retained coverage under that plan through December 1, 2023, you are covered per the last-month rule. This means you are considered an eligible employee for the entire year in 2023. This allows you to contribute up to the 2023 contribution limit. However, you must also take into consideration the testing period. The testing period is a major drawback to the last month rule. It means that you must remain eligible for the HSA until December 31st of the following year. The only exceptions include death or disability.

Categories: CDHP with HSA or HRA & Health Savings Account (HSA)

Do HSAs have annual contribution limits?

Yes. These amounts include the total amount you can contribute, including any employer provided amounts. These amounts are subject to change each year, per the IRS. Keep in mind that the HSA is tied to the CDHP and the participation period of 07/01 to 06/30, PEBP’s plan year, which is why ongoing contributions put in now would only go until the end of the plan year, in the event that a member changes their coverage for the following plan year.

What is the HSA testing period and how do I calculate my contribution limit?

Under the testing period, if you use the last-month rule, you must also remain an eligible individual (retain your same coverage under the CDHP or other high-deductible health plan) for the following 12 months. If you fail to remain an eligible individual (i.e., if you change coverage from the CDHP to the LD, EPO, HMO or enroll in Medicare, etc.) any “extra” contributions you made as a result of the last-month rule must be included in your gross income. Also, a 20% additional tax applies to this amount. Your excess contributions are determined by the contribution limit divided by 12 months, compared to your time eligible.

 

To calculate your personal contribution limit:

1. Take the total annual contribution limit based on your coverage type (individual or family)
2. Divide that amount by 12
3. Multiply it by the number of months that you qualify that year

 

Can I change my pre-tax Employee HSA contribution election mid-year?

As an active employee enrolled in the Consumer Driven Health Plan with a Health Savings Account (HSA) you can update your employee pre-tax HSA contribution in your E-PEBP portal. For instructions on how to complete this event visit our How Tos page.

Categories: CDHP with HSA or HRA, Health Savings Account (HSA)

What can I use the HSA debit card for?

You can spend your HSA dollars on qualifying medical expenses for yourself, or anyone you claim as a dependent on your personal income tax — even if that person is not covered by your CDHP coverage. Please visit www.irs.gov for additional information.

Categories: CDHP with HSA or HRA, Health Savings Account (HSA)

My spouse is a state employee with an HRA. I am a new employee and plan to enroll in the CDHP with an HSA, am I eligible to contribute to an HSA?

If your spouse has an HRA, you are disqualified from establishing and/or contributing to an HSA per the IRS.

Categories: CDHP with HSA or HRA, Health Reimbursement Arrangement (HRA), & Health Savings Account (HSA)

How long do I have to submit an eligible receipt for reimbursement from my HRA?

Requests for reimbursement must be submitted within one year (12 months) from the date the service(s) where incurred.

Categories: CDHP with HSA or HRA, Medicare & Retirees