Frequently Asked Questions
Life Change Information
Congratulations! To add your spouse, complete a Benefit Change Form (PDF) and return it along with a copy of your marriage certificate to the benefits department. Please keep in mind, all paperwork must be received within 30 days of your marriage date in order to add your new spouse. If you miss the 30 day period, the next opportunity to add your spouse to your plan(s) will be during open enrollment.
Congratulations on your new baby! To add your newborn, complete a Benefit Change Form (PDF) and return it along with a copy of the birth notice (often a certificate with your newborn's footprints) to the benefits department. Please keep in mind, all paperwork must be received within 30 days of your newborn's birth date. If you miss the 30 day period, the next opportunity to add your newborn to your plan(s) will be during open enrollment. We realize your newborn's social security number may not be available within 30 days. The social security number can be provided once received.
Since your dependent has had a qualified life status change, you can add the qualified dependent to the city's plan. Complete a Benefit Change Form (PDF) and return it along with a letter from the employer or insurance carrier stating their name, the benefits they were enrolled in, and the date the coverage ended to the benefits department. Please keep in mind, all paperwork must be received within 30 days of the date the other coverage ended. If you miss the 30 day period, the next opportunity to add your dependent to your plan(s) will be during open enrollment.
Since your dependent has had a qualified life status change, you can remove the qualified dependent from the city's plan. Complete a Benefit Change Form (PDF) and return it along with a letter from the employer or insurance carrier stating their name, the benefits they are now enrolled in, and the date the coverage began to the benefits department. Please keep in mind, all paperwork must be received within 30 days of the date the other coverage began. If you miss the 30 day period, your next opportunity to remove your dependent from your plan(s) will be during open enrollment.
A health savings account (HSA) is a tax-favored savings account created for the purpose of paying medical expenses.
• Tax-deductible - Contributions to the HSA are 100% deductible (up to the legal limit) — just like an IRA.
• Tax-free - Withdrawals to pay qualified medical expenses are never taxed.
• Tax-deferred - Interest earnings accumulate tax-deferred, and if used to pay qualified medical expenses, are tax-free.
• HSA money is yours to keep - Unlike a flexible spending account (FSA), unused money in your HSA isn’t forfeited at the end of the year; it continues to grow, tax-deferred.
An HSA works in conjunction with high deductible health insurance.
Your HSA dollars can be used to help pay the health insurance deductible and any qualified medical expenses, including those not covered by the health insurance, like dental and vision care.
Any funds you withdraw for non-qualified medical expenses are taxable income and subject to a 20% tax penalty.
Once you meet your calendar-year deductible, the health insurance pays remaining covered expenses at 90%. You would be responsible for 10% of covered expenses after the calendar-year deductible is met until the out-of-pocket max is reached.
In order to have an HSA account you must:
1. Be covered by qualified high deductible health insurance plan;
2. Not be covered under other health insurance;
3. Not be enrolled in Medicare; and
4. Not be another person’s dependent.
Exceptions. Other health insurance does not include coverage for the following: accidents, dental care, disability, long-term care, and vision care. Workers’ compensation, specified disease, and fixed indemnity coverage is permitted.
Federal law states that annual contribution limits are $3,400 for singles/$6,750 for families for 2017. Individuals aged 55+ may contribute an additional $1,000 for each tax year.
For FY 17/18, the city will contribute $500 for single and $1,000 for families. With the city contribution, a single may contribute an additional $2,900 and those with family coverage may contribute an additional $5,750 to bring you to the federal annual contribution limits.
Your HSA account with Central Bank does not have fees such as a one-time set up fee, monthly maintenance fee or minimum balance fee.
Generally, yes. Qualified medical expenses include unreimbursed medical expenses of the accountholder, his or her spouse, or dependents.
Nonmedical withdrawals from your health savings account are taxable income and subject to a 20% tax penalty.
Exception. This tax penalty does not apply if the withdrawal is made after the date you:
1. Attain age 65;
2. Become totally and permanently disabled; or
No, this would be a nonmedical withdrawal, subject to taxes and penalty.
Exceptions. No penalty or taxes will apply if the money is withdrawn to pay premiums for:
1. Qualified long-term care insurance; or
2. Health insurance while you are receiving federal or state unemployment compensation; or
3. Continuation of coverage plans, like COBRA, required under any federal law; or
4. Medicare premiums.
There are three major tax advantages to your HSA.
1. Cash contributions to an HSA are 100% deductible from your federal gross income (within legal limits).
2. Interest on savings accumulates tax deferred.
3. Withdrawals from an HSA for “qualified medical expenses” are free from federal income tax.
A qualified medical expense is one for medical care as defined by Internal Revenue Code Section 213(d). The expenses must be primarily to alleviate or prevent a physical or mental defect or illness, including dental and vision. Most expenses for medical care will fall under IRC Section 213(d). However, some expenses do not qualify.A few examples are:
• Surgery for purely cosmetic reasons
• Health club dues
• Illegal operations or treatment
• Maternity clothes
• Toothpaste, toiletries, and cosmetics
HSA money cannot generally be used to pay your insurance premiums. See exceptions above under “Can I use my HSA to pay premiums?”.
*See IRS Publications 502 (“Medical and Dental Expenses”) and 969 (“Health Savings Accounts and Other Tax-Favored Health Plans”) for more information.
Your HSA will be treated as your surviving spouse’s HSA, but only if your spouse is the named beneficiary. If there is no surviving spouse or your spouse is not the beneficiary, then the savings account will cease to be an HSA and will be included in the federal gross income of your estate or named beneficiary.
Benefit Plan Information
Self-insurance means that payments for claims are being made by the city of Scottsdale rather than by an insurance company. In the three medical plans, Cigna processes claims and provides customer service on behalf of the city but the money for actual claim payments comes from the city. However, the city is protected by stop loss insurance if claim costs are greater than expected. Cigna also provides plan participants with various services such as use of their networks, case management, and other services such as the nurse line and disease management programs.
From the consumer's perspective, there is really no difference between the two. HMO stands for health maintenance organization while EPO stands for exclusive provider organization. The general premise of HMO's and EPO's is the same in that members must use the providers in the plan's network to receive benefits under the plan. The technical difference is that generally an HMO is an insured product (the insurance company pays the claim costs) whereas an EPO is generally a self-insured product (the employer pays the claim costs). Since the City of Scottsdale's plan is self-insured, it is technically called an EPO.
A PPO is a preferred provider network. This means that the plan offers two levels of benefits coverage: in-network benefits and out-of-network benefits. If a member uses providers within the plan's network (in-network benefits) they receive a higher level of coverage than if they use providers who are not within the plan's network (out-of-network) benefits. This differs from an HMO or an EPO in that in an HMO or EPO out-of-network coverage is not available.
No it will not. You will be given another unique identifier.
Yes. Even if you do not have authorization for general Internet access, the Information Systems Department is providing limited access for all city employees for the provider web sites listed under BeneFacts. Employees can also access those web sites from a home computer. To obtain information on Cigna go to www.cigna.com
The prescription drug plans will be handled through each of the health plans. You will pay a specific percentage of the cost (with a minimum and maximum) for each tier (generic, brand and non-formulary) under the drug plan. In addition, all health plans provide a mail order drug program, which is a cost effective way to fill your prescription for maintenance medicines.
Each insurance plan has a preferred listing of drugs for the plan. That listing is called a formulary. If a drug is not on the health plan's preferred listing it is considered a non-formulary drug. If you are prescribed a drug which is not on the plan's formulary, you can still get that drug; however, you will pay more than what you would pay for a drug which is on the formulary. If you are taking a drug that is not on the formulary, you may want to consult with your doctor to find out if there is a formulary drug that you could take instead.
The city provides benefited employees a basic life insurance benefit as well as short-term disability insurance and supplemental life insurance. Fee schedules are included under the Disability Benefits link.
Voluntary and Basic Life insurance does reduce upon attaining a certain age. Please see your certificate for details on those reductions.
The Benefits web site is available to anyone with an internet connection at home. Family members who need specific information also are invited to contact HR through email, by phone, or by dropping in at the HR office location.
All plans are paid on a fiscal year basis so you will need to meet/satisfy your deductibles and out-of-pocket maximums from July 1 through June 30 each fiscal year.
Cigna OAP In-Network Plan - no deductible.
Cigna OAP Plan - You must meet a deductible before the plan begins paying for many procedures. However, you do not need to satisfy a deductible before the plan will pay for in-network office visits or prescription drug benefits. For in-network office visits, you only pay the co-pay and the plan pays the rest. Thus, if you visit a network primary care physician and the visit costs $100, you pay $25 and the plan pays the remaining $75. The deductibles are $750 for an individual/$1,500 for the entire family for in-network benefits and $2,000 for an individual/$4,000 for the entire family for out-of-network benefits.
Cigna OAP + HSA - You must meet a deductible before the plan begins paying for any service. For example, if you visit a network primary care physician and the visit costs $100, you pay $100. The deductibles are $1,300 for an individual/$2,600 for the entire family for in-network benefits and $3,500 for an individual/$7,000 for the entire family for out-of-network benefits.
Under all plans, the deductible, co-payments and co-insurance for medical services count towards your out-of-pocket maximum.
Prescription drug co-payments and any co-payments and co-insurance under CIGNA Behavioral Health do count towards your out-of- pocket maximum.
Any expenses for medical services or supplies that are not covered by the plan, and all charges in excess of Usual and Customary do not count towards your out-of- pocket maximum.
Yes, there are separate deductibles and out-of-pocket limits for in-network and out-of-network benefits. The expenses you incur for in-network benefits only accumulate towards your in-network deductible and out-of-pocket maximum. The expenses you incur for out-of-network benefits only accumulate towards your out-of-network deductible and out-of-pocket maximum.
For example, if you have already met your in-network deductible, and then decide to go out-of-network for surgery, you would have to start accumulating out-of-network expenses towards your out-of-network deductible and out-of-pocket maximum.
The individual deductible is the amount of expenses that one individual must accumulate before their deductible is met. The family deductible is the amount that all covered family together must accumulate before the deductible is met for all family members. Once the family deductible is met, no individual family member needs to accumulate additional expenses towards their deductible.
For example, if under the Cigna OAP plan, one member of your family accumulates $750 of in-network expenses, their in-network deductible has been met. Then, if a second covered family member accumulates $750 of in-network expenses, their in-network deductible is met as is the in-network deductible for any other family member since the family has met the $1,500 in-network deductible. The family in-network deductible could also be met, for example, if one covered family member had $750 in in-network expenses, another had $450, and a third had $300. Since the $1,500 family in-network deductible is met, all covered family members have met their in-network deductible.
There are several ways that you can find out if your doctor participates in one of the plan's networks. Because all networks experience some change in provider participation, the most reliable way to find out if a doctor is currently participating in a network is to contact the plan directly, either through their web site or member services. This will provide you with the most up-to-date information. Printed provider information can become outdated very quickly; it is always a good idea to check with the plan or with your doctor prior to each visit to confirm that they are participating in the network.
Produced by Human Resources:
This information represents a summary of benefits provided by the City of Scottsdale to benefited employees. Every effort has been made to report information accurately. All information, including the amount of any benefit and employee eligibility of benefits, is subject to and governed by the terms and conditions of the applicable policy or plan documents. In all cases where any of the information provided differs from the amount of benefit actually provided by the policy or plan, the terms of the legal documents will control.
9191 E. San Salvador Drive
Scottsdale, AZ 85258