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New Great-West Healthcare Pharmacy Program Complies With 2006 HSA Regulations; Implementation Well Ahead of Mandated Jan. 1 Deadline

Posted on: Wednesday, 10 August 2005, 12:00 CDT

Great-West Healthcare, a national employee benefits provider, today announced its new med pharmacy program for the company's health savings account (HSA) plan.

The med pharmacy program allows plan members to purchase prescription drugs through 59,000 participating retail or mail-order pharmacies nationwide. It also features discounts and automated claims processing, which reduces paperwork and speeds reimbursements. Currently in effect, the program replaces The Pharmacy Card (TPC), which previously provided prescription drug coverage under the medical plan associated with the HSA.

Great-West Healthcare's new program is in place well ahead of the government compliance date of Jan. 1, 2006. The new regulation calls for all HSA participants to enroll in high-deductible health plans (HDHPs) under which all pharmacy benefits must be applied to the medical portion of the plan. Copayment plans are no longer permitted by the Internal Revenue Service in association with an HDHP.

"Great-West Healthcare anticipates this new government mandate will produce a shift in consumer consciousness and behavior," said Cindy Donohoe, vice president of marketing and product development at Great-West Healthcare. "As copayments no longer shield consumers from the full cost of a prescription, it is expected that more will choose generic versus brand-name drugs, thus driving down costs."

The two most notable enhancements to the med pharmacy program are the mail-order process and the option for employers to have pharmacy claims paid at either the medical network coinsurance level or a lower, out-of-area coinsurance level. Under med pharmacy, the average discount for generic drugs is more than 60 percent, and for brand-name drugs members can save up to 14 percent off the average wholesale price of brand-name drugs. When members purchase a prescription through a participating pharmacy, they pay the discounted cost, and the pharmacy transmits claims electronically to Great-West Healthcare. This process eliminates paperwork for employees and speeds reimbursements.

While the med pharmacy program was designed to comply with HSA requirements, it also is offered with the company's health reimbursement account (HRA). For the HSA solution, Great-West Healthcare teamed with Mellon Financial Corporation to provide an option that allows employees to save for future medical expenses in a tax-sheltered account. HSAs are employee tax-favored savings accounts used in conjunction with qualified HDHPs. Funds may be used without tax penalty to pay for qualified medical expenses, such as deductibles and prescription drugs, as well as long-term care insurance and COBRA premiums.

About Great-West Healthcare

Great-West Healthcare, a division of Great-West Life & Annuity Insurance Company, is a national employee benefits provider with expertise in self-funding and health care management solutions. Nationally, the division operates a health care network that includes more than 4,200 hospitals and 530,000 providers and provides health care coverage to nearly 2 million people. Visit www.greatwesthealthcare.com for more information.

Great-West Life & Annuity Insurance Company, headquartered in metro-Denver, serves its customers through a full range of health care plans, life and disability insurance, annuities, and retirement savings products and services. It is an indirect, wholly owned subsidiary of Great-West Lifeco Inc. and a member of the Power Financial Corporation group of companies. Great-West Life & Annuity Insurance Company is not licensed to do business in New York. Products are sold in New York by its subsidiary First Great-West Life & Annuity Insurance Company, White Plains, N.Y.

Source: Business Wire

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