CDHP with HSA

When you put Villanova's Consumer-Driven Health Plan together with a special tax-advantaged account, you can take charge of the way your health dollars are spent, and save for the future. Here's how.
As you’ve probably heard, the cost of health care in this country is rising fast. And that upward trend is unsustainable over the long term. While Villanova University is committed to making sure that our employees have quality, affordable coverage, now and in the future, it’s important to find ways to get there.
And that’s where the consumer-driven health plan, or CDHP, comes in. It’s a type of coverage that combines a medical plan with a pretty unique savings account. The medical plan keeps you protected from huge bills, by limiting your out-of-pocket costs each year. And the Health Savings Account, or HSA, gives you a chance to save on taxes and take control of the money you put towards your health care. That could mean using it now, if you need to, or saving it for the future. Even retirement.
The HSA is a savings account that you use just to pay for health care costs. And it comes with some pretty great tax benefits. You can contribute money to the account from your paycheck, before taxes are taken out. That lowers your taxable income, so you’ll pay less on tax day. The University will also make a tax-free contribution to your account at the beginning of each year, helping you grow your account. And, by completing challenges and health activities available to you on the NOVAfit! portal, you can earn an additional 500 incentive points. When you use your HSA to pay for health care costs, the money comes out tax-free, too.
The medical plan looks a lot like many other medical plans. It gives you access to the same great network of IBC doctors and providers, it includes prescription coverage, and it puts a cap on the amount you’ll pay for care within a year.
But there is one key difference between this plan and most others. It has a higher deductible. That’s the amount you’ll need to pay for services with your HSA dollars—or out of pocket—before the plan starts sharing costs with you. The number might look intimidating. But the money Villanova puts into your HSA will help offset it. And with this plan, you’ll also save a lot of money on premiums, giving you extra cash each month to put in your pocket, or your HSA.
Now, let’s take a closer look at how the plan and the account work together when you head to the doctor.
First off, preventive care. Good news. The medical plan covers the full cost of things like checkups, vaccinations, and screenings, whether you’ve met your deductible or not. Just remember to stay in the network to get this benefit. You’ll also want to check with IBC to ensure you know what qualifies as a preventive service.
But what if you need more than just preventive care? Here, you’ll be responsible for the full cost of care until you reach your deductible. But that’s when your HSA comes into the picture. You can use the funds in your HSA—including the money put in by the university—to pay the bills with tax-free dollars. And once you meet the deductible, the plan will start sharing costs with you, at the rates you see on screen. You should note that the rates shown apply to in-network care, and they may differ if you receive service outside of the network.
And if the worst happens, the plan will take even more of the burden off your shoulders. That’s because there’s a limit on how much you’ll pay out of pocket each year for care. It’s called the out-of-pocket maximum – and it includes the money you pay toward your deductible. Once you reach the amount you see here, the plan will cover all of your costs at a hundred percent, for the rest of the plan year. So you can rest easy, knowing your wallet’s protected if you need to use your plan a lot.
But what if you aren’t using a lot of care? That’s when your HSA really shines as a savings account. Any money left over at the end of the year will automatically roll over into the next year. After just a couple years of low expenses, you could build up enough to cover the entire deductible. A few years after that, and you might have enough saved to match the entire out-of-pocket maximum. Eventually, you could even end up with funds to pay for your medical care well into retirement. That’s right, the account is yours to keep and use, even if you leave or retire.
Even though an HSA comes with some pretty great tax advantages, the IRS does have a few rules about them. Like these limits on how much you can contribute to your account each year. That number includes the amount you put in from payroll contributions to the HSA plan, and the amount that the university puts in as well. So plan carefully! And if you’re using an HSA, you can’t use a health care flexible spending account at the same time. But you can use a “limited purpose” flexible spending account, to set aside extra money for dental and vision expenses.
By being a smart health care shopper, you can make the dollars in your HSA go far. And the plan comes with great tools that will help you do just that. Visit the website you see here to shop around, compare prices for procedures, tests, and office visits, and find providers in the network. Learn how they work now, so you can use them when you need to.
Ready to take charge of your health car e spending? Want to learn more? Check out the resources you see on screen.
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CDHP with HSA

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