Medical/Dental Insurance

what is cdhp insurance

CONTENTS

UW employees have access to a consumer-directed health care plan with a health savings account or so called "CDHP-HSA." Current medical providers—Uniform Medical, Group Health, and Kaiser Permanente—each offer this plan in addition to the traditional Classic and/or Value plan.

This page and the corresponding PEBB web page explain the CDHP-HSA plan. Navigate to Uniform Medical, Group Health, or Kaiser via the right side bar under "Medical Insurance Plans" to read a description of the plan choices sponsored by each provider.

Terms to Know

Before explaining the CDHP-HSA, it's important to understand that in addition to monthly premiums which are deducted from your pay, other costs should be considered when choosing a medical plan, such as:

  • Annual deductibles - the amount you must pay out of pocket for health care and prescriptions before the plan begins to pay.
  • Copays - the amount you must pay per visit.
  • Co-insurance - the cost that you and the plan share.
  • Out-of-pocket maximums - the maximum amount you will generally pay in any year.
  • Also, if you have a specific medical condition, investigate costs and provider options outlined in the plan's Certificate of Coverage.

Consumer Directed Health Plan (CDHP)

CDHP is a type of insurance plan where you take on most of the cost for claims until the higher deductible for the plan is met. It has lower premiums in exchange for significantly higher annual deductible and out-of-pocket maximums than typical health plans. The CDHP is automatically linked to a tax-exempt savings and spending account called a "health savings account" (HSA) that can be used to help pay for qualified medical expenses.

When you

choose a CDHP-HSA, your monthly premiums (deducted from your paycheck) will be less, HOWEVER you take on a much higher deductible as you begin using health care services AND you assume the burden of ensuring your HSA contributions and withdrawals comply with IRS guidelines.

Health Savings Account (HSA)

When you elect a CDHP-HSA, the HSA portion is automatically established with HealthEquity, the qualified trustee. There is an employer contribution to this account, and you can also choose to contribute on a pre-tax basis into this account, either directly to Health Equity or through optional payroll deduction. You can use the money in your account to pay for eligible current or future health care expenses.

While the University allows payroll deductions for the convenience of its employees and transmits the funds to HealthEquity, all aspects of managing and maintaining the HSA remain the responsibility of the employee.

Key Features of the CDHP-HSA Plan

CDHP-HSA has a similar benefit plan structure to traditional plans, such as:

  • Preventive care visits covered at 100% when you see a network provider for these services
  • Regular office visits and diagnostics
  • Vision coverage
  • Prescription drug coverage
  • Prescription drug coinsurance/co-payments applied to the out-of-pocket maximum for all CDHP plans.

But, unlike traditional plans, there are other things to consider:

  • The structure of CDHP automatically includes use of an HSA, and you must meet the IRS-HSA qualifications of an HSA.
  • You will need to build savings in your HSA in order to help cover the high deductible and/or co-insurance.
  • You pay more coinsurance and/or co-payments before the plan pays 100% of covered benefits:

Source: www.washington.edu

Category: Insurance

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