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Health Savings Accounts. Member FDIC Who is First American Bank  Strategic Focus For over 30 years, we have built our business one satisfied customer.

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Presentation on theme: "Health Savings Accounts. Member FDIC Who is First American Bank  Strategic Focus For over 30 years, we have built our business one satisfied customer."— Presentation transcript:

1 Health Savings Accounts

2 Member FDIC Who is First American Bank  Strategic Focus For over 30 years, we have built our business one satisfied customer at a time based on the philosophy that the needs of our customers come first.  Best of both worlds Big bank financial services with the personal attention only a smaller bank can provide  Size More than $2.5 billion in assets. Eleventh largest bank in Illinois, with nearly 50 branches $35 million in our HSA portfolio with over 17,000 accounts nationwide  Ownership Privately held financial institution

3 Member FDIC Our HSA Department Team:  Meg Smadi, HSA Account Manager  Adam Fingerhut, HSA Account Manager  James Wargas, Executive Vice President  Dedicated HSA Support Group: 100+ personal bankers and managers throughout our 49 branches

4 Member FDIC Why open an HSA?  High deductible (HDHP) insurance protects you from high medical bills.  HDHP generally costs less than traditional coverage; money saved on premium can be put into HSA.  Contributions are tax deductible.  Funds can be withdrawn from your HSA (tax-free) to pay for qualified medical, dental, or vision expenses.  After age 65, HSA funds can be used for non-qualified expenses without penalty. Only income tax is assessed.  HSA funds earn interest tax-free.  Funds rollover year after year – “use it or keep it”  HSA money is yours – take it with you if you change jobs or health coverage.

5 Member FDIC  Must be covered by a qualifying High Deductible Health Plan (HDHP)  You are not enrolled in Medicare  You have no other health insurance that is not an HDHP (excluding accident, vision, dental, long term, disability)  You cannot be claimed as a dependent on someone else’s tax return HSA Eligibility

6 Member FDIC HSA Contributions What is the maximum I can contribute to my HSA?  2011 Limits Individual - $3,050 Family - $6,150 Catch Up Contribution - $1,000  2012 Limits Individual - $3,100 Family - $6,250 Catch Up Contribution - $1,000

7 Member FDIC What can the funds in my HSA be used for?  Examples of qualified expenses: Acupuncture Ambulance Annual Physical Exam Bandages Chiropractor Contact Lenses Dental treatment Diagnostic Services Eyeglasses Gynecologist Hospital Services Laboratory Fees Nursing Services Obstetrician Optometrist Orthodontist Pediatrician For a complete list, go to Publication 502www.irs.gov Podiatrist Prenatal Care Prescription Medication Psychiatrist Psychoanalyst Psychologist Specialists Surgery Therapy Vaccines Vision Correction Surgery Weight Loss Programs Wheelchair X-Rays

8 Member FDIC Role of the Bank

9 Member FDIC Role of First American Bank  The bank is the custodian of the account  The bank has reporting requirements to the IRS  The bank has to correct excess contributions  The bank will establish the account and answer any questions the customer may have about their account.  The bank does not: Determine if withdrawals are qualified expenses  Please note: If funds are withdrawn for reasons other than to pay for qualified medical expenses by someone under age 65, the amount withdrawn is taxable and subject to a 20% penalty by the IRS in 2011/2012. After age 65, there is no penalty for non- qualified withdrawals, but amounts are taxable.

10 Member FDIC Bank Products and Account Features

11 Member FDIC Bank Products and Account Features Health Savings Account Health SavingsPLUS account Monthly Account Fee$0 *$0 Monthly Investment FeeNA$ 4.00 Debit Card(s)Free On-Line Banking/Bill PaymentFree E-StatementsFree Pays InterestYesYes, on funds in the checking portion Investment OptionNoYes Minimum Deposit RequiredNo * A $3 monthly fee applies if the account holder elects to receive paper statements. This fee will be waived, if the combined balance in any First American Bank Checking and/or Savings account is greater than $2,000 or if the customer elects to receive eStatements only.

12 Member FDIC HSA PLUS Information

13 Member FDIC Health SavingsPLUS Account  The Health SavingsPLUS account is compromised of 2 parts: A checking portion - This is an interest bearing account that works just like a traditional checking account - you can write checks, make deposits, use your debit card. Funds in this portion of the account are FDIC insured. An Investment portion - You can invest in a variety of nationally recognized mutual funds. Funds in the investment portion are not FDIC insured, may lose value and are not bank guaranteed.  In order to invest in the Health Savings Account Investment Account, participants need to have a minimum $2,000 balance in the checking portion of their Health SavingsPLUS account. Bank Products and Account Features Funds in the investment portion of your Health SavingsPLUS account are not FDIC Insured, May Lose Value and are Not Bank Guaranteed.

14 Member FDIC Bank Products and Account Features Health SavingsPLUS Account Example  Step 1: The balance in the checking portion of the Health SavingsPLUS account grows to $4,200. Funds in the investment portion of your Health SavingsPLUS account are not FDIC Insured, May Lose Value and are Not Bank Guaranteed.

15 Member FDIC Bank Products and Account Features Funds in the investment portion of your Health SavingsPLUS account are not FDIC Insured, May Lose Value and are Not Bank Guaranteed. Health SavingsPLUS Account Example  Step 2: The account holder decides to invest the maximum amount of $2,200 (= $4,200 (Total balance) - $2,000 (balance required in checking portion))

16 Member FDIC Bank Products and Account Features Health SavingsPLUS Account Example  Step 3: A medical bill for $500 needs to be paid. The funds will be debited from the checking portion of the account. Note: more money can only be invested once the balance in the checking portion exceeds $2,000 again. Funds in the investment portion of your Health SavingsPLUS account are not FDIC Insured, May Lose Value and are Not Bank Guaranteed.

17 Member FDIC Enrollment Process

18 Member FDIC Enrollment Process  Submit application Online or paper  Time Line for new accounts Once the application (including signed account adoption agreement document) has been submit, processing will begin. All applications will be open within 2-3 business days as long as information is accurate, complete and passes our verification system.  Debit Card / Checks A debit card is ordered once the application has been processed and the account established. Debit cards will be received within 7-14 business days of the account being established. Debit Cards are mailed separately (for your security) from the checks or new account welcome package and are in blank white envelopes (please do not discard as junk mail). Checks, if requested, will be ordered after the first deposit has been posted to the account.  New Account Welcome package Employees will receive a white package containing several disclosures. This package will also contain their account number.

19 Member FDIC Employer Funding Options

20 Member FDIC Funding Options  Automated Clearing House (ACH): Method 1: ACH transfer can be originated by your bank or a direct deposit payroll system. The payroll field for the Health Savings Account is an additional deduction similar to your 401k. In order to send an ACH you will need the account and routing numbers for the employees.

21 Member FDIC Funding Options  Automated Clearing House (ACH): Method 2: First American Bank can accept an ACH transfer or wire transfer to a central holding account. An employer contribution form, which will be provided to you, will need to be completed and sent the same day or a day prior to the transaction posting in our account. Once the funds have been received we will divide the monies per the contribution form into the employees individual accounts.

22 Member FDIC Funding Options  Ca$hTrac (fees apply) Ca$hTrac is First American Bank’s proprietary online business banking system. Ca$hTrac will allow you to directly debit an operating account and credit employees’ individual accounts within 48 hours. Speak with your HSA account manager for details.

23 Member FDIC Funding Options  Check A check, accompanied by the employer contribution form, can be mailed to the bank. Please make checks payable to First American Bank. Employer contribution form is required to ensure funds are properly allocated to the individual employee’s accounts.

24 Member FDIC Employee Funding Options

25 Member FDIC Employee Funding Options  Check A check made payable to either yourself or First American Bank may be mailed to the bank or done in any one of our nearly 50 branches. Please either use our Deposit Form or note the account number on the memo line of the check. FDIC

26 Member FDIC Employee Funding Options  Automatic Transfer You may complete the HSA Auto Savings Form which will allow First American Bank to automatically deduct funds from your personal checking or savings account on a one time or recurring basis.

27 A Practical Example:

28 Member FDIC You visit your in-network doctor Can I Visit Any Doctor?

29 Member FDIC You pay nothing during your visit. What Do I Have To Pay At The Time Of My Visit?

30 Member FDIC Your doctor’s office sends your bill to your Health Insurance Carrier. How Do I Get Billed?

31 Member FDIC The insurance carrier receives the bill and applies the negotiated network discount That amount is also also applied to your deductible. Who Receives The Bill?

32 Member FDIC The insurance carrier sends an EOB to you and your doctor Insurance Carrier Sends An Explanation Of Benefits (EOB)

33 Member FDIC You pay using your HSA debit card, a check, or online bill payment. How Is The Doctor Paid?

34 Member FDIC The money comes out of your HSA account or personal funds. Where Does The Money Come From?

35 Member FDIC Your health insurance plan works like a typical PPO. What Happens Once Your Deductible Is Met?

36 Member FDIC Your visit to the doctor works the same way. You will receive your EOB, showing the percentage paid by your plan You can use funds in your HSA account to pay for other qualified medical expenses. What Happens Once Your Deductible Is Met?

37 Member FDIC How Do I Reimburse Myself For Out of Pocket Costs?  You may reimburse yourself for qualified medical expenses using the following methods: Withdraw money from an ATM using your HSA Debit Card Send yourself an online bill payment Write a check from your HSA account Step into one of our 49 branch locations to perform a withdrawal

38 Member FDIC Money left in your account continues to roll over year after year. This allows you to accumulate a nest egg for future medical expenses, tax free. What Happens If I Have Money Left Over?

39 Member FDIC Once you reach age 65, funds can be withdrawn for non- medical expenses without penalty. Your HSA is a great potential savings and investment vehicle! What Happens If I Have Money Left Over When I Retire?

40 Member FDIC Helpful Information / Contact Information Meg Smadi HSA Manager First American Bank 1650 Louis Avenue Elk Grove Village, IL (847) Voice and Fax Adam Fingerhut HSA Manager First American Bank 1650 Louis Avenue Elk Grove Village, IL (847) Voice and Fax Dedicated HSA Toll Free Call Center (866) HSA Department Fax (847) Corporate P.O. Box First American Bank P.O. Box 0794 Elk Grove Village, IL Corporate Headquarters: First American Bank 1650 Louis Avenue Elk Grove Village, IL (847)

41 Any Questions?


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