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CDHP/HSA Insurance Options

The CDHP/HSA (also called a consumer-driven health plan with a health savings account or HSA) covers the same services and uses the same networks as the PPO options.

With a CDHP/HSA you have:

  • Lower premiums and higher deductibles
  • Coinsurance payments instead of copays
  • health savings account (HSA) —you can use the money in your account to pay your deductible, other healthcare costs or save it

Watch this video to learn more about the CDHP/HSA.


State and higher education:

CDHP/HSA: Lower premiums and lower out-of-pocket maximums, but a higher deductible

  • The state will put money into your HSA at the beginning of the year: $250 for employee only coverage or $500 for family coverage. You can also contribute through payroll deduction.
  • If your insurance coverage starts on or after September 2 through the end of 2018, you will not receive the state contribution towards your HSA.

Local education and local government agencies:

Local CDHP/HSA: Lower premiums, but a higher deductible

  • Premiums and the out-of-pocket maximum are higher than in 2017.
  • You can contribute to your HSA with pre-tax dollars from each paycheck (if offered by your employer) or with post-tax money and claim the contribution on your taxes.

Retirees:

CDHP/HSA (state and higher education): Lower premiums, but a higher deductible

  • No state HSA funds are available, but you can contribute to the HSA and claim the contribution on your taxes.
  • Premiums are higher than in 2017.

Local CDHP/HSA (local education and local government): Lower premiums, but a higher deductible 

  • You can contribute to the HSA and claim the contribution on your taxes.
  • Premiums and the out-of-pocket maximum are higher than in 2017.

How does the CDHP/HSA work?

  • You pay for your healthcare differently. When you get care or need a prescription, you pay for those expenses until you reach your deductible. Then you pay coinsurance for your medical and pharmacy costs until you reach your out-of-pocket maximum. For all of your care, as long as you use network providers, you get discounted network rates.
    • For certain 90-day maintenance drugs (e.g., hypertension, high cholesterol), you only pay coinsurance, and you do not have to meet your deductible ­first. You must use a Retail-90 network pharmacy or mail order to fill a 90-day supply of your medication to receive this lower cost benefit. Check with your pharmacist or CVS/caremark if you have questions. Click here to learn more about pharmacy costs with a CDHP.
  • You get a HSA to help you save! You can contribute money through payroll deduction, if offered, to your HSA. In some cases your employer may contribute money to your account. You can save by putting the difference in premiums between the CDHP and PPO (premium savings) into your account each month.
    • You can use your HSA money to pay for your out-of-pocket costs like your deductible, coinsurance for doctor’s visits and prescription drugs.
      • Your HSA money rolls over each year — you keep it if you leave or retire.
      • When you turn 65, you can use money in your HSA for non-medical expenses (before age 65 non-medical expenses are both taxed and subject to a 20% penalty. After age 65, non-medical expenses are taxed, but the 20% penalty does not apply).
      • The IRS sets a limit on how much money you can put in your HSA each year (includes employer contributions):
        • 2018 maximum HSA contribution amounts:
          • $3,450 for employee/retiree only (includes state or employer contributions)
          • $6,900 for all other tiers (includes state or employer contributions)
          • Members 55 or older can save an extra $1,000 in a catch up contribution during the plan year
  • You save money on taxes! Your HSA contributions can be pre-tax — put money from your paycheck directly into your account by payroll deduction (if offered by your employer). This lowers your taxable income, saving you money. Any employer contributions are tax free, quali­fied medical expenses are tax free and the account collects tax-free interest on the balance.
    • Retirees: You can contribute to your HSA and claim it on your taxes. Qualified medical expenses are tax free and the account collects tax-free interest on the balance.
  • You get a debit card with your HSA funds: PayFlex will send you a debit card. You can use it to pay for your qualified healthcare expenses, or you can pay for your expenses online.

Certain restrictions

You cannot enroll in the CDHP or Local CDHP if you are enrolled in another plan, including a PPO, your spouse’s plan or any government plan (e.g., Medicare A and/or B, Medicaid, TRICARE or social security benefits), or if you have received care from any Veterans Affairs (VA) facility or the Indian Health Services (IHS) within the past three months.

  • Generally, members eligible to receive free care at any VA facility cannot enroll in the CDHP because a HSA is automatically opened for them. Individuals are not eligible to make HSA contributions for any month if they receive medical bene­fits from the VA at any time during the previous three months. However, members may be eligible if the following applies:
  • Member did not receive any care from a VA facility for three months, or 
  • The member only receives care from a VA facility for a service-connected disability (and it must be a disability).
  • Go to https://www.irs.gov/irb/2004-33_IRB/ar08.html for HSA eligibility information.

You cannot have a HSA if you or your spouse are enrolled in a medical flexible spending account (FSA) or a HRA. Instead, if you have one available, you can enroll in a limited purpose FSA for dental and vision costs.


Payflex

Health savings account (HSA)

The banking vendor who helps administer your HSA is PayFlex. Check out this video for more information about how the HSA works. Note: The video refers to an HDHP, which is another term for CDHP.

PayFlex


Frequently asked questions about CDHP options

The CDHP is a consumer driven health plan (CDHP) with a health savings account (HSA). It uses the same provider networks and discounted rates as the PPOs.

You control and manage more of your healthcare dollars. It has lower monthly premiums, but a higher deductible. When you get care or need a prescription, you pay for those expenses until you reach your deductible. Then you pay coinsurance for your medical and pharmacy costs until you reach your out-of-pocket maximum. Then you are covered 100 percent.

You also have a HSA, a tax-free savings account that you can use to pay for your deductible, qualified medical expenses and to save for retirement. You can contribute to your HSA and some employers do too. For example, you can take the money you save in premiums for the CDHP versus a PPO and put it in your HSA.

For state and higher education employees, if you enroll in the CDHP/HSA, the state will put money into your HSA in 2018: $250/individual and $500/family. If your coverage begins on or after September 2, the state contribution for 2018 is not available.

Local government and local education employees should check with your agency benefits coordinator to see if your agency will provide funding for your HSA.

A health savings account (HSA) is a tax-exempt account that individuals can use to pay or save money for qualified medical expenses on a tax-free basis. Our HSA is administered by PayFlex. The money in the account earns interest and when it reaches $1,000 you can invest it.

The money you save in the HSA (both yours and applicable state or local agency contributions) rolls over each year and collects interest. You don't lose it at the end of the year.

You can use money in the account to pay your deductible, qualified medical, vision and dental expenses and to save for retirement.

The money is yours! You take the HSA with you if you leave or retire.

You will receive a PayFlex debit card for yourself and may order additional cards for your spouse and/or dependent(s) to use for medical expenses.

The HSA offers a triple tax advantage on money in your account:

  • Both employer and employee contributions are tax-free
  • Withdrawals for qualified medical expenses are tax-free
  • Interest accrued on HSA balance is tax-free

The HSA can be used to pay for qualified medical expenses that may not be covered by your plan (like vision and dental expenses, hearing aids, contact lenses, acupuncture and more) with a great tax advantage.

Money in the account can be used tax-free for health expenses when you retire. And, when you turn 65, it can be used for non-medical expenses. Non-medical expenses will, however, be taxed.