1 considering a health savings account? (hsa). 2 who is eligible for an hsa? not covered by any...
Post on 21-Dec-2015
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Considering a Considering a Health Savings Account? Health Savings Account?
(HSA)(HSA)
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Who is Eligible for an HSA?
Not covered by any other non HSA-compatible health plan
Not claimed as a dependent on another person’s tax return (excluding spouses per Internal Revenue Code)
Not enrolled in Medicare
Individuals who are covered by an HSA-compatible health plan are qualified if they are:
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Basic HSA Concept
Contributions
Contributions
EarningsTax-Deferred
Growth
Tax-Deductible/ Pre-Tax
Contributions
Tax-Free Distributions(For Qualified Medical Expenses)
HSA
Normal Tax(NON-qualified expenses if you are 65 or older)
- Compare to an IRA
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Basic HSA Plan Concept
Part II: Health Savings Account
HSA HSA ConceptConcept
Covers illness or injury after the deductible, and
certain preventive care services at no
cost to you.
Pays for Qualified Medical
Expenses not covered by the
health plan.
•Out-of-pocket includes deductible & co-insurance•Qualifying deductible ranges are limited by the maximum out-of-pocket.
2011 Single Family
Min. Deductible $1,200 $2,400
Max. Out of Pocket $5,950 $11,900
Part I: High Deductible Health Plan
Max. Contribution Single Family
For 2011 $3,050 $6,150
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Advantages of an HSA
» Funds roll over from year to year» No “use it or lose it” philosophy
» Tax benefits on contributions, earnings and distributions
» Contributions are either pre-tax (via paycheck) or tax-deductible
» Portability» Funds follow you » Tax-free withdrawals for Qualified
Medical Expenses even if qualifying coverage ends
» Long-term investment opportunities
» (Not FDIC insured)
» Control over healthcare dollars
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HSAs vs. FSAs
HSA FSA
Account Owner
Employee Employee
FundingEmployee,
Employer, OtherEmployee,
Possible Employer
Roll Over Year-to-Year
Yes No
Portable Yes No
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Online Tools
Available at www.hsabank.com
The Is an HSA right for me? calculation tool helps you decide which health plan is best for you.
The Future Value Calculator provides a personalized estimate of what your HSA could be worth in the future.
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Preventative Care Benefits
Many HSA-compatible health plans offer:» Periodic health evaluations» Routine prenatal and well-child care» Immunizations» Tobacco cessation programs» Screening services
Check with your employer or health plan provider to determine which benefits are offered at no cost to
you - before your deductible is met.
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Account & Investment Options
» Savings Account OptionInterest bearing* and FDIC insured
» Investment Account Option»You may elect to open an investment account that is linked to your HSA
» Not FDIC insured**
*Note: Interest rates are subject to change. Fees may reduce earnings. Current rates available at www.hsabank.com
**Investment products are not FDIC insured, are not a deposit or other obligation of or
guaranteed by the bank, and are subject to investment risks including possible loss of
principal amount invested.
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How To Contribute
» Online through Internet Banking» One-time or recurring from an
external account.
» Checks» Transfers or rollovers
» (MSA, HSA, IRA)
Accountholder Contributions from all sources count
toward the annual maximum.
How Are They Made?
Who Makes Contributions?
Year Individual Family
2011 $3,050 $6,150
Annual IRS Maximum(regardless of deductible)
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Internet Banking
For a demonstration of Internet Banking, visit: http://hsabank.com/~/media/Files/Flash/ibanking_demo.
swf
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Prorating Provision
» If HSA-compatible coverage begins after January 1st in a given year, you can contribute the annual IRS maximum as long as qualifying coverage continues through December 31st of the following year.» Exception--those who change from family to single plans will
need to prorate based on the number of months under each type of coverage.
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Catch-Up Contributions
Accountholders covered under an HSA-compatible health plan who are age 55 or older and not enrolled in Medicare are eligible to make an annual catch-up contribution.
Year Catch-up Amt.
2011 $1,000
An accountholder’s spouse must have their own HSA, be age 55 or older and not be enrolled in Medicare to be eligible to make the catch-up contribution.
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Tax Savings Example
Contribution $3,000 per year for 25 yrs
Annual Medical Expenses $500 per year
Tax Bracket 28% (Federal)
Average Interest Rate 2%
TAX SAVINGS ON CONTRIBUTIONS = $17,500.00
TAX SAVINGS ON DEFERRED GROWTH = $4,921.21
ACCOUNT BALANCE AT THE END OF 25 YEARS =$80,075.75
For illustrative purposes only. Actual savings may vary. Visit www.hsabank.com and click on Calculate Savings for a personalized estimate.
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Distribution Options
» Debit card from Visa®
» Reimbursement from Internet Banking to an external account
» HSA checks» Withdrawal Form
» Mail to HSA Bank
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Qualified Medical Expenses
» Doctor and hospital visits» Medical equipment» Dental care, braces, dentures» Vision care, glasses, contacts» Medications, including many
over-the-counter versions» Medical related transportation
A Qualified Medical Expense is incurred to maintain the health of the accountholder or the accountholder’s
spouse or dependents. The following are included:
*A list of Qualified Medical Expenses can be found in IRS Publication 502, http://www.irs.gov/pub/irs-pdf/p502.pdf. As described in IRS publication 969,
http://www.irs.gov/pub/irs-pdf/p969.pdf, over-the- counter medications are considered Qualified Medical Expenses for HSA purposes.
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Other Qualified Medical Expenses
» Premiums for long-term care insurance» Limited to amount listed in 213(d)(10)
of the Internal Revenue Code
» Premiums for COBRA
» Premiums for coverage while receiving unemployment compensation
» Premiums for individuals over age 65 » Retirement health benefits» Medicare premiums
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Employer Communication Kit
Ask your employer about educational employee materials that outline the benefits of an HSA and provide information on:
•Account use•Potential future value•Taxes…and more
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Spanish Resources
Forms & DocumentsEducational Items
Customer Service
www.hsabank.com/Spanish/
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Employees &Accountholders
Client AssistanceCenter
(800) 357-6246 [email protected]
M – F, 7 a.m. – 9 p.m., CT
Spanish LanguageSupport
(866) 357-6232
M – F, 7 a.m. – 9 p.m., CT
Service and Support
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For more information, please visit
www.hsabank.com
What Does Your Future Hold?