Spending Accounts & the Deductible
BlueEdgeSM allows your clients to give their employees a Spending Account option to help them pay for qualified health care expenses. One option is to establish a Health Care Account for each employee with employer funds. The other option is a Health Savings Account, which can be set up with employer funds, employee funds or both.
BlueEdge Health Care Account (HCA)
With the BlueEdge HCA health insurance plan, companies sets aside a specific amount of money in a Health Care Account (HCA) for each employee each benefit year.
Here's how the Health Care Account works:
- The account pays for the member's covered health care claims until the balance is depleted. These claims are applied to meeting the deductible.
- Preventive care services are covered at 100 percent, of the allowable amount, in-network even before the deductible is met, so these claims are not deducted from the Health Care Account.
- BlueEdge HCA provides a seamless approach to claims processing—paying claims automatically from the HCA or the Preferred Provider Health Insurance Plan (PPO).
- Employees do not pay for services up front or submit claims for HCA reimbursement.
- The company only funds claims as they are paid from the HCA, so unused account balances remain part of the company's cash flow.
- Funds roll over year-to-year as long as the employee remains in the health insurance plan.
- If the employee leaves the plan, the funds stay with the employer.
BlueEdge Health Savings Account (HSA)
BlueEdge HSA is compatible with Health Savings Accounts (HSA), which are funds that employees can use to pay for qualified health care expenses.
Here's how a Health Savings Account works:
- The account can be funded by the employer, the employee or both, but the account is owned by the employee. There is a maximum amount that can be contributed annually
- Funds in an HSA are completely portable so if an employee changes jobs or stops working, the funds remain with him/her.
- There are no "use it or lose it" rules like there are with Flexible Spending Accounts—unspent money stays in the HSA from year-to-year.
- A separate trustee administers the HSA (not Blue Cross and Blue Shield of Texas).
- Health Savings Account funds can be invested in interest-bearing accounts.
- Employer contributions are not subject to FICA taxes and employee contributions are tax deductible. Amounts distributed from the account are not taxable as long as they are used to pay for qualified health care expenses.
BlueEdge includes an annual deductible that employees must meet before their PPO benefits begin. Claims paid from the Spending Accounts are applied toward the plan deductible.
Here's how the family deductibles work:
- BlueEdge HCA: If an employee's dependents are covered under the plan, the deductible works like most other Blue Cross and Blue Shield of Texas Preferred Provider Health Insurance Plans (PPOs). No family member has to satisfy more than the individual deductible before receiving PPO benefits, and the PPO benefits will be paid for the whole family once the family deductible is met.
- BlueEdge HSA: We offer HSA plans with either an embedded or aggregate deductible. These deductibles are defined as follows:
If "Family" coverage is selected, the family deductible amount must be satisfied before any benefits are available under the HSA plan. The family deductible amount may be satisfied by one participant or a combination of two or more participants.
The individual Deductible amount must be satisfied by every Participant covered, each Calendar year. If Dependents are covered, all charges applied to the Individual Deductible amount will be applied toward the Family Deductible amount. When the Family Deductible is reached, no further individual Deductibles will have to be satisfied for the remainder of that Calendar Year. No Participant will contribute more than the Individual Deductible amount to the Family Deductible amount.