Health Savings Accounts Presentation

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Health Savings AccountsPresentation

For 2009/2010 Plan Year
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What Is a Health Savings Account?

• Coupling of high deductible health insurance
• A tax-free medical IRA
• Its use it or keep it!

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Benefits of an HSA

• An HSA provides several financial benefits
• Tax deductible contributions to your savings
  account
• Tax free dollars to pay for qualified medical
  expenses
• Tax free growth of your investment
• Keep the savings you dont use

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Other Potential Advantages

• Lower insurance premium
• Opportunity to control expenses
• Supplement retirement

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Eligibility for Enrolled Employee

• Covered under a qualified high deductible health
  plan on the first day of the month
• Not covered by any other health plan, Including
  spouses health insurance
• Not covered by spouses Medical FSA
• Not enrolled in Medicare Part A or TriCare
• No VA benefits in past 90 days
• Not claimed as dependent on another persons tax
  return

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High-deductible Health Insurance(HDHP)

• One of the options of your health plan
• Must choose this insurance plan if you want to
  put in your HSA

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Putting Money in the Account

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Contributions

• Employee can payroll withhold or contribute
  direct
• Contributions to HSA account through payroll
  withholding are pretax
• No minimum employee contribution

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HSA Maximum Annual Contribution
2009 2010
Single 3,000 3,050
Family 5,950 6,150

• Catch-up provision
• Age 55 and over by December 31 of tax year
• 1,000 per year in 2009 and beyond

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HSA Maximum Annual Contribution

• Employee 2009 contributions can be made anytime
  up to April 15, 2010
• There is a penalty for over contributing
• Income tax plus 6 of excess contribution
• Full contribution allowed even if insured for
  partial year testing period applies

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HSA Investment Options

• The Vanguard Group of no-load mutual funds - 22
  to choose from
• 10 funds are Admiral Share Class
• OR
• Fulton Bank Debit Card pays
• Rates subject to change see website for most
  recent rates

• The Vanguard Group of no-load mutual funds - 22
  to choose from
• 10 funds are Admiral Share Class
• OR
• Fulton Bank Debit Card pays
• Rates subject to change see website for most
  recent rates

Balance APY
0 - 99 100 - 15,000 0.00 Tiered Rates
Balance APY
0 - 99 100 - 15,000 0.00 Tiered Rates
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Getting Money Out of the Account

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When you get medical care

• Show the insurance card
• Dont pay the clerk if you can avoid it
• Wait for the EOB (explanation of benefits)
• Pay when you get the bill from the provider
• Pay the negotiated rate!
• Decide if you want your HSA money now or later

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HSA - How to Withdraw

• From the Vanguard fund - submit reimbursement
  form to Health Savings Administrators (fax, mail,
  or online)
• Shares will be redeemed and a check or ACH will
  be sent to the employee
• Approximate 5 business day turnaround
• From Fulton Debit - Use debit card to pay
  provider - After EOB

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HSA Tax-free Withdrawals

• Eligible medical expenses before insurance
  deductible
• Prescription drugs and dental expenses
• Eyeglasses or contact lenses
• All medical expenses as defined by IRS
  publications 969 and 502

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Eligible Insurance Premiums

• Certain insurance premiums qualified LTC,
  COBRA, and health care coverage while receiving
  unemployment compensation
• Medicare eligible may pay ER-sponsored health
  premiums and Medicare parts B and D
• Cannot use HSA for Medigap premiums
• Cannot pay premiums for HSA health insurance
  policy

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HSA - TAXABLE Withdrawals

• May withdraw at any time for any reason
• These withdrawals are subject to income tax
• Taxable withdrawals taken before age 65 or
  disability are subject to additional 10 penalty
  

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Other Issues

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Flexible Spending Account

• You cannot participate in a full Medical FSA
• You can participate in a dependent childcare FSA

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Beneficiary

• If spouse is named as beneficiary, HSA continues
  on, unchanged, untaxed
• If anyone else is named as beneficiary, HSA is
  taxable to recipient as any other IRA account

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What If I Terminate or Retire?

• Account belongs to you - take it with you
• Can continue to pay medical expenses tax free -
  even after Medicare eligibility
• Always available for self, spouse, and tax
  dependents medical expenses
• You cannot make further contributions unless
  covered by another HSA insurance policy

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HSA Fees

• One-time setup fee 10.00 Pd by LU
• Administration fee 36.00/year - Pd by LU
• Employee Account Maintenance Fee
• Vanguard Funds - .0008 times account balance each
  quarter (80 cents per 1000 balance)
• OR
• Debit Card - 2.00 per month if balance lt 2,500

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Account Information

• View your account at any time at
  www.HSAadministrators.com
• General info at www.hsaadministrators.info
• Quarterly statements mailed to employee

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What Is Best for You?

• HDHP
• Lower premiums
• Higher payments to providers
• Tax savings

• Traditional Plan
• Higher premiums
• Modest copays
• No savings
• Possible tax savings with FSA (use or lose)

OR
Compare the Total Cost for each.
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Keycare 300 Keycare 300 HDHP with H S A HDHP with H S A

Premiums paid 2,688 1,296

Max out of pocket 3,000 plus Rx 5,000

5,688 6,296
-1,350 Tax savings


Net out of pocket 5,688 4,946
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How Do I Sign Up?

• Select the HSA high deductible insurance option
• Complete the Health Savings Administration
  enrollment form
• Your insurance and your health savings account
  are both effective 07/01/09

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Additional Information

• Health Savings Administrators
• In Richmond 804-378-7756
• Toll free 888-354-0697
• Email info_at_HSAadministrators.com
• Website www.HSAadministrators.com