What is Basic Consumer Option (a sub-option of Basic Option)?
NOTE: Only federal employees residing in the following Plan areas are eligible to enroll in Basic Consumer Option: Minnesota, Ohio, Tennessee, and Kansas City, Missouri, (the counties of Johnson and Wyandotte in the State of Kansas, and the counties of Andrew, Atchison, Bates, Benton, Buchanan, Caldwell, Carroll, Cass, Clay, Clinton, Daviess, DeKalb, Gentry, Grundy, Harrison, Henry Holt, Jackson, Johnson, Lafayette, Livingston, Mercer, Nodaway, Pettis, Platte, Ray, St. Clair, Saline, Vernon and Worth in that State of Missouri.)
The Basic Consumer Option plan is a consumer-driven health plan that combines a special tax sheltered savings account with a high deductible version of (the Basic Option) a traditional health coverage. This plan uses the PPO network and provides nationally recommended preventive care at no cost to you. This plan allows you to maximize your health care dollars in utilizing your Health Savings Account (HSA) or Health Reimbursement Account (HRA).
What is a high deductible health plan (HDHP)?
This type of health plan features a higher annual deductible than other traditional plans.
Basic Consumer Option 2008 deductibles are:
$2900 for self-only coverage
$5800 for self and family coverage
What is a Health Savings Account (HSA)?
An HSA is a tax-advantaged account that lets you pay current health care costs or save for future expenses. By law an individual must be covered by an HSA-qualified high deductible health plan, such as Basic Consumer Option, in order to contribute to the HSA.
A portion of your premium contribution will be made to your HSA each month. In additional you can make your own HSA contributions, which are either tax-deductible or pre-tax (if made by payroll deduction). The HSA is similar to a checking account that earns tax-free interest. Withdrawals of funds for qualified medical expense are tax-free. The HSA is owned by you and is yours to keep, even when you leave federal employment or retire. Unused funds accumulate interest from year to year.
What is a Health Reimbursement Account (HRA)?
The HRA is a tax-advantaged credit that reimburses participants for qualified medical expenses. Under the Basic consumer Option, your full HRA credit will be available when you enroll. You may not contribute your own money to an HRA. The HRA does not earn interest. Unused credits can be rolled over annually but are owned by the employer. Thus, it does not go with you should you leave federal employment or change health insurance plans.
What are qualified medical expenses?
Qualified Medical Expenses are defined by IRS Coded 213(d), (see IRS Publication 502), including over the counter drugs. A few examples of “qualified medical expenses” are, ambulance charges, dental treatment to include orthodontics, dentures, eyeglasses, office visit charges, etc. FEHB law does not permit Qualified Medical Expenses to include expenses relating to artificial, induced, planned, or therapeutic abortion.
HSA vs. HRA
When you enroll in a High Deductible Health Plan, the health plan determines if you are eligible for a health savings account or a health reimbursement arrangement.
HSA eligibility rules are established by the Internal Revenue code. To be eligible for an HSA, you must satisfy the following:
| You must not be enrolled in Medicare or have any other health coverage that is not an HSA-qualified HDHP, including coverage under a spouse’s plan.|
| You must not be covered under a Health Care Flexible Spending Account, including a spouse’s.|
| You must not be claimed as a dependent on someone else’s income tax return.|
| You must not have received or used Veterans Administration (VA) medical or prescription benefits/services within the past three months.|
Blue Healthcare Bank administers both the HSA and the HRA.
You pay 100% of the Plan Allowance for covered services until the deductible and catastrophic maximum are met. Generally 100% payment begins for covered services after you meet the deductible and catastrophic maximum.
The calendar year deductible and catastrophic benefit maximum are the same. The amount for a self-only policy is $2900.00 and for a self and family contact the amount is $5800.00.
Routine physicals, preventive screenings and the related office visit charge are paid in full. These services are not subject to the calendar year deductible.
For additional details, please visit: www.fepblue.org/consumer/index.asp
How do I Enroll?