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Press Releases - February 18, 2004

FOR IMMEDIATE RELEASE
Contacts:

Deb Wiethop
(314) 923-4767
deborah.wiethop@wellpoint.com

UniCare ESTABLISHES HIGH DEDUCTIBLE HEALTH PLANS COMPATIBLE WITH HEALTH SAVINGS ACCOUNTS FOR INDIVIDUALS
CONSUMERS GIVEN MORE ACCOUNTABILITY FOR THEIR HEALTH CARE SPENDING

CHICAGO, IL – UniCare today announced it is offering High Deductible Health Plans (HDHPs) that are compatible with Health Savings Accounts (HSAs) to individuals and families. HSA-enabling legislation became effective as part of the Medicare Prescription & Modernization Act signed by President Bush on December 8, 2003. UniCare’s individual MSA-compatible policies qualify as HDHPs and can be used to open an HSA account.

HSAs are the latest “consumer-choice” strategy for managing the rising costs of health care expenses. HSAs allow individuals and families who have a qualified High Deductible Health Plan (HDHP) to put aside money in a tax-exempt HSA account to cover qualified medical expenses. Individuals who purchase or enroll in an HDHP can make a pre-tax annual contribution to an HSA of up to $2,600 with families allowed a maximum contribution of $5,150. Some restrictions apply. Employers may make part or all of these allowable contributions on behalf of their employees and covered dependents only if they are enrolled in a qualified HDHP and meet all other eligibility requirements. HDHP plans are defined as health plans with at least a $1,000 deductible for individuals with an out-of-pocket maximum of $5,000 or a $2,000 deductible for a family with an out-of-pocket maximum of $10,000 (including deductible, coinsurance and copay amounts). Qualified medical expenses are any health care costs as defined by the Internal Revenue Code (IRC Section 213(d)) that are not covered by insurance. For employees, an employer must offer an HDHP that is compatible with an HSA. HSA advantages include:

  • Contributions are tax deductible
  • Interest on an HSA account is tax-deferred
  • HSA withdrawals can be used to pay for qualified medical expenses
  • HSAs are portable and owned by the individual, contributions cannot be taken away
  • Unspent balances carry over and can accumulate over a lifetime to be used at retirement to pay for uncovered Medicare expenses. (However, consumers may not contribute once they reach age 65.)
  • HSAs may be passed on to beneficiaries tax free - if the account holder should pass away

"Providing consumers with options to manage health care spending will continue to be an important part of what UniCare offers," said Sandra Van Trease, president and CEO of UniCare. "The addition of the HSA account allows individuals another way to set aside money to cover future health care costs."

Beginning in March 2004, UniCare Large Group will offer HSA compatible products. HDHPs compatible with HSAs for small group members are scheduled to be available by this summer.

Consumers can receive information on individual HDHPs or other UniCare individual products by calling a local authorized UniCare agent or by calling UniCare directly at 1-800-683-2273 or via the Internet by clicking on www.unicare.com.

UniCare serves 1.7 million medical members and is the national operating subsidiary of WellPoint Health Networks Inc., the nation's second largest publicly traded health care company. WellPoint serves the health care needs of more than 15 million medical members and approximately 46 million specialty members. WellPoint offers a broad spectrum of quality network-based health products including open access PPO, POS and hybrid products, HMO and specialty products. Specialty products include pharmacy benefit management, dental, utilization management, vision, mental health, life and disability insurance, long term care insurance, flexible spending accounts, COBRA administration, and Medicare supplements. UniCare can be found on the web at www.unicare.com.

*** Not all UniCare products are available in all states where UniCare is marketed. Insurance or health maintenance organization coverage is provided by any of the following: UniCare Life & Health Insurance Company, UniCare Health Insurance Company of the Midwest (IN and IL only) or UniCare Health Plans of the Midwest, Inc. (HMO in IN and IL only), UniCare Health Plans of Texas, Inc. (HMO in TX only), UniCare Health Insurance Company of Texas (TX only), UniCare Health Plan of Virginia, Inc. (HMO in VA only), UniCare Health Plan of West Virginia, Inc. (HMO in WVA only).

UniCare High Deductible Health Plans are not HSAs. The HSA, which must be established for tax-advantaged treatment, is a separate arrangement between the individual and a bank or other qualified institution. You must be an eligible individual under IRS regulations to receive HSA tax benefits. The IRS has not yet issued HSA or High Deductible Health Plan regulations or determined that UniCare High Deductible Health Plans are qualified. Consultation with a tax advisor is recommended.

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