1. Considering a Health Savings Account? (HSA)

2. Who is Eligible for an HSA? Individuals who are covered by an HSA- compatible health plan are qualified if they are: 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

3. Basic HSA Concept Earnings Contributions Tax –Deferred Growth Tax-Deductible / Pre-Tax Contributions HSA Tax-Free Distributions (for qualified Medical Expenses) Normal Tax (NON-qualified expenses if you are 65 or older Compare to an IRA Contributions

4. Basic HSA Plan Concept High Deductible Health Plan Single 2012 Family 2012 Single 2013 Family 2013 Min. Deductible $1,200$2,400$1,250$2,500 Max. Out of Pocket* $6,450 $12,100 $6,250$12,500 Health Savings Account ContributionSingleFamily 2012$3,100$6,250 2013$3,250$6,450 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 and co-insurance

5. 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 Control over healthcare dollars

6. HSAs, HRAs, FSAs HSAHRAFSA Account owner EmployeeEmployerEmployee FundingEmployee, Employer, Other EmployerEmployee, Possible Employer Roll Over Year-to-Year YesGenerally NoNo PortableYesGenerally NoNo

7. Online Tools Internet access to your HSA provides the following features: Real time to your account balances and activity Making contributions or withdrawals using internal or external transfers Sign up for email alerts View Check images Access electronic statements

8. Online Tools Mobile access to your HSA provides the following features: Access at any time or location View your balance or activity Pay bills Transfer funds Receive text alerts

9. Preventative Care Benefits Many HSA-compatible health plans offer: Periodic health evaluations Routine prenatal and well-child care Immunizations Quit Smoking 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.

10. How to Contribute Who Makes Contributions? Accountholder Employer Third Party How are they Made? Through your employer Payroll deduction may be an option Online via Internet Banking One-time or recurring from an external account Checks Transfers or rollover MSA, HSA, IRA Contribution from all sources count toward the annual maximum. Annual IRS Maximum YearIndividualFamily 2012$3,100$6,250 2013$3,250$6,450

11. Prorating Provision If HSA-compatible coverage begins after January 1 st in a given year, you can contribute the annual IRS maximum as long as qualifying coverage continues through December 31 st 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

12. 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. Accountholder’s spouse must have their own HSA, be age 55 or older and not enrolled in Medicare to be eligible to make the catch-up contribution Catch-up Amount Accountholder $1,000 Spouse $1,000

13. Distribution Options Debit Card from Visa® Reimburse from Internet Banking to an external account HSA Checks Withdrawal form

14. Qualified Medical Expenses  Doctor and hospital visit  Medical equipment  Dental care, braces, dentures  Vision care, glasses, contacts  Medications, including many over-the counter version  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 the IRS Publication 502, http:www.irs.gov/pub/irs-pdf/p502.pdf

15. Other Qualified Medical Expenses  Premium for long-term are 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

16. Employer Communication Kit Ask you employer about educational employee materials that outline the benefits of an HSA and provide information on: – Account use – Potential future value – Taxes…and more

17. Thank You If you have questions or need assistance contact us at 800-508-2265 or email hsa@avidiabank.com hsa@avidiabank.com