Regulations on deductibles under HDHP

[Mary C]

I posted this a little while ago on the HSA forum and thought someone here might be able to help, too.

My company will be implementing a high deductible health plan at annual enrollment 7/1. We will have two carriers nationwide because of network access in various parts of the county. We will have a $1,500 single deductible/$3,000 2 party or family deductible. After the deductible is met, there is a 80%/20% coinsurance until the OOP maximum is met.

Recently one of the carriers came to us and said because of regulations governing HDHP in order to allow an HSA with the plan, the deductible must work differently than what we thought. According to the carrier, if you have a family of 3 and one person has $1,600 in claims, benefit co-insurance will not begin for that individual because the family deductible of $3,000 has not been met.

Can anyone confirm this or provide the legal site for this?

thanks in advance for any help you can provide.

[namealreadyinuse]

They are correct, but I think that is pretty basic. If you have family coverage, the family deductible has to be met under the IRS rules.

[leevena]

I am sorry, but I need to disagree somewhat.

There are now two types of deductibles allowed under the law. The original MSA law required that any enrolled subscriber who had any depdendent coverage (ee+sp, or ee+ch, or fam) must meet the "family" deductible. This was required of the HSA plans when they first came out. About a year ago (don't hold me to the exact date) carriers were allowed to offer "corridor deductibles" which would offer an alternative. In this situation, the one of the members of the family could reach the INDIVIDUAL deductible and then go into the next level of benefits.

When deciding on which plan you may want to implement, it should be a question you ask of the carrier. My guess is that not many people with dependent coverage will have satisfied the deductible, but it might be your luck that the 1 person in your company that does reach that is the President of you company.

Hope this helps.

[Larry M]

Leevena,

Do you have a cite for the permission of embedded deductibles?

[leevena]

Larry M...sorry, I do not. I am a broker and learned about it as a course of my job. I received the notice from a variety of sources, but did not keep it. If you need to see something in writing, try looking at Aetna HSA group products. They have embedded/corridor plans in their portfolio of products. Hope this helps.

[Guest jlgic12]

For 2006, HSA-qualified HDHPs MUST have a MINIMUM $1050 single deductible and a $2100 family deductible. Also, a MAXIMUM $5250 out-of-pocket for singles and a $10,500 for families.

So - - there IS a way to design HSA-compliant HDHP's without simply having a $1600 single, $3000 family that the OP stated. It could for example, be $1600 single and $2100 family and still be compliant, as long as the OOPs were also compliant...

Many of the carriers have simply set plan designs to ease administration. We'll see much more creativity if these plans ever gain significant popularity.

www.treasury.gov is a great source.

[Larry M]

Just a note to clarify the "embedding" aspect of this.

A high deductible health plan must have, as a minimum in this year, a $2,050 deductible for any family member covered by the family plan.

It MAY provide at least a $2,050 deductible for any individual, whether covered by family plan or employee only coverage, and the same 2,050 deductible as an aggregate for the family or, in the case of "embedded" plans, a higher aggregate deductible for the family as a whole.

For example, the plan could provide a 2,500 for any one individual, but no more than $3,500 for all members of the family.

[jmor99]

See my post under the HSA forum, this site.