Base Coverage meets the federal government’s criteria of a qualifying high deductible health plan under Section 1201 of the Medicare Prescription Drug Improvement and Modernization Act of 2003 in regard to establishing a Health Savings Account (HSA). HSAs are portable, interest- bearing, funded accounts to provide for tax-free savings for medical expenses. HSAs allow individuals to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis. HSAs must be funded through a trust or custodial account. Permissible trustees and custodians include banks, insurers, and any entity that has been approved by the IRS to be a trustee of an individual retirement account or Archer MSA. Some cafeteria plan administrators offer an HSA, allowing for contributions to be deducted pre-tax from payroll.
The benefit design for Base Coverage is structured to comply with IRS regulations related to qualified high deductible health plans. There are two types of coverage: Individual Coverage and Family Coverage.
Deductible and Coinsurance/Co-payment Maximum – Individual Coverage
Individual Calendar Year Deductible
Individual Coinsurance/Co-payment Maximum
Calendar Year Deductible – Individual Coverage The calendar year deductible is the amount of covered expense a participant must pay each year before the Plan begins to pay its share of covered expense. All expenses, medical and pharmacy, apply toward the calendar year deductible. Once the calendar year deductible has been met, the Plan pays its portion of the allowable charge for covered expenses, and the participant pays prescription drug co-payments and a percentage of the allowable charge for covered medical expenses.
Coinsurance/Co-payment Maximum – Individual Coverage The coinsurance/co-payment maximum is the maximum amount that an enrollee with individual coverage has to pay in coinsurance and co-payments for covered expenses in a calendar year before benefits will be paid at 100%. The coinsurance/co-payment maximum provides participants protection against catastrophic healthcare expenses. The amount paid toward meeting the calendar year deductible does not count toward satisfying the coinsurance/co-payment maximum.
The initial $2,450 of coinsurance/co-payments is applied to both the in and out-of-network coinsurance/co-payment maximum. After the initial $2,450 has been met, only the coinsurance amount for services rendered by non-participating providers will be applied to the additional $1,500 out-of-network coinsurance. Once the annual coinsurance/co-payment maximum is met, the Plan pays 100% of the allowable charge for covered medical expenses and prescription drugs for the remainder of that calendar year, except as otherwise specified.