MINNEAPOLIS, July 7 /PRNewswire/ -- Medica, whose Custom Options strategy for flexible, affordable health plans is fueling its rapid growth, is taking a similar approach with its new Health Savings Account (HSA) plans.
HSA plans give employers, employees, and individual purchasers a more affordable alternative to traditional health insurance. HSA plans are designed to encourage consumers to take more control over their health care spending, and gives them a chance to build tax-sheltered savings for future medical care needs.
HSA plans require a high-deductible insurance policy, provide 100 percent coverage for many kinds of routine checkups, immunizations and health screenings, include catastrophic coverage, and include an IRA-type tax- sheltered trust account that can earn interest or be invested.
Medica Direct(SM) HSA plans in a wide range of designs are available to large and small group customers as of July 1, with Individual plans expected to be available in September. Plan design options include deductibles, out-of- pocket maximums, coinsurance levels and a choice of four provider networks: an open access network, two primary care networks, and the Passport by Medica multi-state network.
Financial Management by Wells Fargo, Visa-based Debit Card
Medica Direct HSA combines Medica’s health coverage expertise with the financial strength of Wells Fargo Health Benefit Services, which will manage the savings and investment options for the plan. Medica Direct HSA plans for large groups will initially offer simple interest, with investment options to come in 2005.
A distinctive feature of the Medica/Wells Fargo approach is administrative simplicity, with a single point of contact for employers. Employers do not have to deal separately with both an insurer and its participating financial institution.
The Medica Direct HSA pharmacy debit card, based on the VISA network, is an extra advantage. It taps directly into the employee’s HSA account and can be used only with pharmacy purchase codes, reducing chances of misuse. Pharmacy charges are for many people their most frequent medical expense. Moving from a traditional copayment plan to HSA-style deductible coinsurance is a significant change. The pharmacy debit card simplifies the transition.
One of the goals of the HSA movement is consumer education; better informed consumers can make better spending decisions. Medica Direct HSA members have Web access (through medica.com) to a number of special decision support tools including a Treatment Cost Estimator and the HealthGrades Quality Evaluator. The secure and password-protected Medica Direct Web site also lets them check their account for deposits, payments, and interest/investment earnings.
Employers, Employees Both Benefit
“Health care costs have risen so much that many employees are joining their employers in calling for creative, affordable alternatives,” said Tom Henke, Medica senior vice president for commercial markets. “That’s why HSAs may be the most talked about health insurance development in years.”
Business surveys and reports from major national consultants predict that nearly 75 percent of large employers may offer an HSA option by 2006. HSAs are available for the first time in 2004 as part of a federal government effort to give employers, employees and individuals more affordable health insurance alternatives. Premiums for high deductible health plans with an HSA will likely be 25 percent to 40 percent less expensive than traditional health insurance, according to Henke.
Strong Incentives
The HSA account is a trust that belongs to the employee and can move with them if they change employers. In the years before age 65, an employee’s HSA contributions lowers her/his income tax; like 401(k) contributions, HSA contributions are tax-free. Once the employee passes age 65, savings built up in the account can be withdrawn penalty-free for any purpose.
HSAs may not be the best health coverage choice for everyone, depending on factors such as age, health and income. However, HSAs are unique among health insurance options because they can also be a potent investment tool for future healthcare funding.
For those who are able, an HSA encourages them to spend responsibly and provides strong incentives to save for future needs. HSA funds can also be used to pay for types of health care expenses not covered by traditional insurance; for example, laser eye surgery, alternative care, retirement care or to buy health coverage when unemployed.
Major newspaper and online sources as diverse as USA Today and Morningstar.com have pointed out that the combination of tax-free contributions, interest, investment earnings and withdrawals for health- related expenses can combine to make an HSA a better investment than an IRA.
Medica Direct HSA plans are part of a growing portfolio of affordable, customizable Medica consumer-directed and high deductible health plans. These include plans with Health Reimbursement Account (HRA) and Medical and Dependent Flexible Spending Account (FSA) options. Employers who want more information about Medica Direct HSA, HRA or FSA plans should contact their broker, or call Medica at 1-800-371-1613.
About Medica
Medica ( http://www.medica.com/ ) is Minnesota’s largest HMO, largest PPO and leading non-profit and independent provider of health plans. Medica has 1.2 million members and 24,000 providers in a regional health care network service area that includes 98 percent of Minnesotans and a growing number of adjoining counties in Wisconsin, North Dakota and South Dakota. Medica also offers national network coverage to employers who also have employees outside the Medica regional network.
Medica commercial and Medicaid HMO plans have the highest accreditation status, Excellent, from the National Committee for Quality Assurance (NCQA(R)). Medica’s vision is to become the community’s health plan of choice, trusted for its integrity, respected for its service, and admired for its commitment to innovation and efficiency.
Medica
CONTACT: Greg Bury, Senior Communications Manager of Medica,+1-952-992-8437, or Cell, +1-612-810-4556, greg.bury@medica.com
Web site: http://www.medica.com/
