The Seneca Group 866-487-4157 | www.thesenecagroup.com

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HSA/HRA StackingCombine the benefits of a Health Savings Account (HSA) with the benefits of a Health Reimbursement Arrangement (HRA) under a single integrated benefit

Employers are facing high health plan costs, with a future that promises even higher costs. Employees’ out-of-pocket costs are increasing at a rate that they can no longer afford. If employers continue to provide the same health care solutions, they will continue to receive the same results.

Proven methods are available to an employer to reduce healthcare costs, without increasing employees’ out-of-pocket costs. The solution is to combine the tax-free benefits of a Health Savings Account (HSA) with the “pay as you go” advantages of an employer-sponsored Health Reimbursement Arrangement (HRA).

How does it work?

An employer purchases a fully insured HSA-qualified High Deductible Health Plan (HDHP) with any fully insured health insurance carrier. Using the premium savings generated with the HDHP, employer offers a “post-deductible” Health Reimbursement Arrangement that will reimburse employees for any eligible claims incurred between the HSA minimum deductible ($1,200 single / $2,400 family 2012) and the fully insured HDHP.

Covered employees can elect to contribute up to the maximum HSA contribution ($3,100 single / $6,250 family 2012) tax-fee, in an interest-bearing Health Savings Account. Contributions to the HSA will roll over year after year and are portable to another employer!

HSA/HRA Stacked Consumer Driven Health Plan

Key Benefits

• Lower monthly health plan costs

• Low employee out-of-pocket costs

• Pre-tax contributions

• No “use it or lose it” provision

• Portable benefits

• Integrated single debit card for all accounts

• Interest and investment income tax-free

• Low “self-funded” risk

• Increased member consumerism

• Single web site for account balances and investment account

• Automatic Bill pay option

• Carrier-“neutral”

CATASTROPHIC

FIRSTDOLLAR

ProfessionalServices

(PCP/SPC)Facility

ServicesProfessional &

Facility Services Flat Copays or 100%

ProfessionalServices

(PCP/SPC)

FacilityServices

Professional & Facility Services

Pharmacy afterCarrier Discount

3rd Fully InsuredHDHP$6,050 / $12,100

2nd EmployerPOST DED HRA$1,201-$6,050 Single$2,401-$12,100 Family

1st EmployeeHSA$0-$1,201 Single$0-$2,401 Family

IN-NETWORK OUT OF NETWORK (Optional) PHARMACY

ProfessionalServices

(PCP/SPC)

Prev

enta

tive C

are 1

00%

FacilityServices

Professional & Facility Services

Pharmacy afterCarrier Discount

The Seneca Group 866-487-4157 | www.thesenecagroup.com

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Consumer benefits:

Integrated investments

Through The Seneca Group’s HSA trustees, HealthCareBank & HSA Bank, employees have complete control over their HSA contributions through The Seneca Group web site. Employees can elect to invest their HSA contributions in a fixed-interest-bearing account or an investment account through the following mutual funds:

Mutual Fund Options Fund Name Category Symbol YTD 3 YR Return

5 YR Return

10 YR return

Expense Ratio

Eaton Vance Large Cap Value Large Value EILVX 11.12 -4.82 3.24 4.70 0.75

Benchmark Russell 1000 Value 14.85 -7.87 0.90 2.59

Growth Fund of America - R4 Large Growth RGAFX 27.35 -2.66 3.89 4.28 0.34

Benchmark Russell 1000 Growth 27.11 -2.50 1.86 -2.56

BlackRock Mid Cap Value Mid Value CMVIX 26.56 -3.53 3.87 8.22 .94

Benchmark Russell Midcap Value 27.57 -5.65 3.53 7.43

Columbia Acorn Z Mid Growth ACRNX 32.07 -2.01 4.94 9.48 0.76

Benchmark Russell Midcap Growth 37.12 -3.10 3.75 2.18

Morgan Stanley Small Cap Value Small Value MCVAX 26.39 0.95 6.82 7.04 1.05

Benchmark Russell 2000 Value 16.36 -6.65 1.78 8.05

Vanguard Small Cap Growth Small Growth VISGX 35.91 -1.01 4.54 6.38 0.23

Benchmark Russell 2000 Growth 29.12 -2.60 2.91 1.10

American Funds Europacific - RS International RERFX 34.88 1.40 10.08 6.25 0.51

Benchmark MSCI Eafe Gr 29.56 -3.12 6.57 2.97

Vanguard 500 index Index Fund VFINX 19.30 -5.48 0.94 -0.23 0.16

Benchmark S&P 500 19.26 0-5.43 1.02 -0.15

PIMCO Total Return Core Bond PTRAX 12.51 8.89 6.67 7.28 0.70

Benchmark Barclays Aggregate Bond 5.72 6.41 5.13 6.30

Power of Pre-tax Contributions

Since the Health Savings Account and the employer-sponsored Health Reimbursement Account are pre-tax programs, the employee and the employer will realize lower tax liability and therefore increased savings.

Qualified Disbursements

In addition to eligible health care charges, insurance premiums including COBRA premiums and Medicare supplement plans are covered expenses under Health Savings Accounts. Employees who contribute to a Health Savings Account can build pre-tax account balances that can be used in the future in case of loss of employment, retirement, or any other unexpected changes in their employment and health coverage.

Please contact us at 866-487-4157 to learn more aboutthe benefits of HSA/HRA Stacking!

Mutual Fund Returns as of September 30, 2009

AutomaticSweep

Automatic Portfolio

Rebalancing

Integrated Resources

PowerfulFeatures