CDHP With HSA

The Consumer Directed Health Plans (CDHPs), offered through Anthem and Kaiser, are paired with a Health Savings Account (HSA), a tax-advantaged account that helps you save for and pay for health care expenses. It is yours to keep, always—even if you change jobs or retire. An HSA can help protect you financially from predictable—or unexpected—health care costs.

How a CDHP with HSA Works

Here are the basics:

You'll pay nothing for preventive care and most preventive care drugs.

If you have really big medical expenses, the CDHP has you covered.

Under the CDHP, the most you’ll pay in any year (your out-of-pocket maximum) is:

Individual coverage $3,000
Family coverage $6,000
Per individual with family coverage
(You don’t need to hit the entire family maximum of $6,000 before the plan begins to pay 100% of costs for that family member.)
$3,000

For everything in between, here’s how it works:

Anthem CDHP

When you stay in-network, you'll pay your deductible for anything that isn't preventive care before the plan begins to share medical costs. Here are the deductibles:

Individual coverage $2,000
Family coverage $4,000
Per individual with family coverage
(You don’t need to hit the entire family deductible of $4,000 before the plan begins to pay 100% of costs for that family member.)
$2,700
  • Once you meet your deductible, the plan will pay 85% of any additional eligible costs (you’ll pay 15%) until you reach your out-of-pocket maximum. This is called coinsurance.
  • Once you reach your out-of-pocket maximum, the plan will pay 100% of all additional eligible costs.

Kaiser Permanente CDHP

When you stay in-network, you'll pay your deductible for anything that isn't preventive care before the plan begins to share medical costs. Here are the deductibles:

Individual coverage $2,000
Family coverage $4,000
Per individual with family coverage
(You don’t need to hit the entire family deductible of $4,000 before the plan begins to pay 100% of costs for that family member.)
$2,700
  • Once you meet your deductible, you will pay only a copayment for most covered services (for example, $30 for office visits) until you reach your out-of-pocket maximum.
  • Once you reach your out-of-pocket maximum, the plan will pay 100% of all additional eligible costs.

You can use money in your HSA to cover your out-of-pocket costs, including your deductible.

The detailed plan comparison chart [PDF] offers a deeper dive into the specifics.

LightbulbWhat You Need to Know

  • With a CDHP, you’re responsible for more of your up-front health care costs (since you have a higher deductible to meet).
  • Lam will contribute to your HSA—up to $1,300 for individual coverage or $2,600 for family coverage. Contributions are made on a per-pay-period basis and are prorated for new employees. This means you can use money from Lam to pay for your health care.
  • You can contribute pretax money through paycheck deductions—up to $2,200 for individual coverage or $4,400 for family coverage in 2019. If you’re 55 or older, you can contribute an additional $1,000 in “catch-up” contributions each year.
  • Both CDHPs have lower per-paycheck costs than the other plan options, which makes contributing to your HSA more affordable.
  • You’ll save on taxes three ways: You don’t pay federal taxes on the money you save; your balance earns interest, federal tax-free; and you don’t pay federal taxes on the money you withdraw, if you use it to pay for qualified medical expenses. (You will pay state taxes in California and New Jersey.)
  • It offers growth potential: You have the opportunity to potentially grow your HSA by investing part of your balance.
  • There’s no “use it or lose it” restriction. Unlike a Health Care Flexible Spending Account, which allows you to keep only $500 of any unused balance at the annual deadline, your HSA balance rolls over each year and keeps growing as your balance earns interest. (If you enroll in a CDHP with HSA, you are still eligible for a Limited Purpose Flexible Spending Account, which can be used for vision and dental expenses.)
  • It’s portable: Your HSA is always yours to keep—including contributions from Lam Research—even if you leave Lam or retire.
  • Your HSA will be opened automatically after you enroll in a CDHP, and Lam will begin making contributions. To contribute to your HSA from your paycheck, visit WageWorks to register, then call the Benefits Help Desk at 1-877-291-9494 to set up your contribution.
  • WageWorks is the administrator of the HSA and processes payments from your HSA, which is deposited at HSA Bank. After your account is opened, WageWorks will send you information about paying for qualified expenses using your HSA.

How the Plans Compare

See how the Anthem and Kaiser plans compare in two scenarios.

Note: Both scenarios assume only in-network providers are used.

Scenario 1: Meet Maria

Maria is single and in excellent health. She gets an annual checkup and well-woman exam and needs an occasional prescription. She works hard to be physically active most days and follows a nutrition plan from Lam’s Live Well program to be sure she is on track to maintain her good health. Maria chooses not to use money from her HSA to pay out-of-pocket costs.

Here’s how her costs compare:

  Anthem CDHP with HSA Anthem Base PPO Kaiser CDHP with HSA Kaiser HMO
In-Network Preventive Care $0 $0 $0 $0
Two Prescriptions (one generic, one preferred brand, actual cost $110) $110 $40 $110 $30
Company Contribution to HSA –$1,300 N/A –$1,300 N/A
Payroll Deductions $871 $1,150.50 $760.50 $1,872
Total Annual Expense $981 $1,190.50 $870.50 $1,902
Remaining HSA balance $1,300 N/A $1,300 N/A

In either CDHP with HSA, Maria pays significantly less for coverage and has $1,300 from Lam in her HSA to use in the future (and she can also contribute to the HSA).

Scenario 2: Meet Don

Don is married, with four children. His family consistently reaches the out-of-pocket maximum—two kids play competitive sports (injuries are common) and have allergies. Don is managing high blood pressure and cholesterol with medication and regular specialist visits. His wife also suffers from allergies, and she has a knee surgery planned that will require several visits with a physical therapist.

  Anthem CDHP with HSA Anthem Base PPO Kaiser CDHP with HSA Kaiser HMO
Out-of-Pocket Maximum $6,000 $6,000 $6,000 $3,000
Company Contribution to HSA –$2,600 N/A –$2,600 N/A
Payroll Deductions $2,977 $3,997.50 $2,554.50 $5,726.50
Total Annual Expense $6,377 $9,997.50 $5,954.50 $8,726.50
Remaining HSA balance $0 N/A $0 N/A

In either CDHP with HSA, Don pays less for health care than with the PPO or HMO.

Is a CDHP with HSA Right for You?

Consider enrolling in a CDHP with HSA if:

  • You want to preserve as much of your paycheck as you can. The employee contribution is lower than for a traditional PPO or HMO, and Lam helps fund your HSA to cover eligible expenses, including meeting your deductible.
  • You’re thinking ahead and want an easy way to prepare for future expenses—or an alternative way to save for medical expenses in retirement.
  • You want control of your expenses: You like being able to decide what to pay from your HSA and what to pay out of pocket—and you want to be able to change that contribution amount at any time.
  • You’re interested in the tax savings you get by contributing pretax money to an HSA (and appreciate the opportunity to invest the funds).

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