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Healthcare Carriers

2004-04 Attachment 2: FEHB High Deductible Health Plans Criteria

High Deductible Health Plans

  • High Deductible Health Plans (HDHP) must meet the requirements of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA).
  • HDHP proposals must be rated in accordance with OPM guidelines. OPM¡¯s 2004 rating policies may be used as guidance until the 2005 policies are determined. Significant changes are not contemplated. Proposals should reflect costs only, including the amount to be deposited in the enrollee¡¯s HSA/HRA.
  • HDHP proposals should reflect that these choices will be open to everyone eligible to enroll in the FEHB Program.
  • Employees remain eligible for premium conversion (pre-tax funding of premiums).

Health Savings Accounts (HSA) and Health Reimbursement Accounts (HRA)

  • Health Savings Accounts (HSA) must meet, at a minimum, the requirements specified in Internal Revenue Service (IRS) Guidance Notice 2004-2.
  • Fiduciary institutions for HSAs and HRAs must be banks or other non-bank trustees or custodians approved by the IRS. (See Internal Revenue Bulletin (IRB) 2003-40, dated October 6, 2003 for further reference.)
  • FEHB carriers proposals must include assurances the trustee is financially stable. At a minimum, the trustee/custodian must be rated by a major financial rating service in one of its two highest categories for the most recent available rating period.
  • FEHB carriers that offer HDHP and HSA/HRA proposals must describe, in detail, the flow of funds from receipt to disbursement to the designated fiduciary, and must also provide a detailed description from the fiduciary on how the HSAs and HRAs will be established and monitored, including earnings for individual accounts.
  • HDHP and HSA/HRA proposals that include the use of debit or credit cards should describe in detail how these would be managed and monitored, including accounting for earned interest.
  • IRS has issued guidance that addressed the issue of employer enrollment and disenrollment changes that are not effective on first day of a calendar year and the corresponding effect on contributions to HSAs. For information on this and other recent guidance, visit the IRS website.
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