1. 1 Considering a Health Savings Account? (HSA)

2. 2 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:

3. 3 Basic HSA Concept Contributions Earnings Tax-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

4. 4 Basic HSA Plan Concept Part II: Health Savings Account HSA Concept 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. 2011SingleFamily Min. Deductible $1,200$2,400 Max. Out of Pocket $5,950$11,900 Part I: High Deductible Health Plan Max. ContributionSingleFamily For 2011$3,050$6,150

5. 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 » Long-term investment opportunities » (Not FDIC insured) » Control over healthcare dollars

6. 6 HSAs vs. FSAs HSAFSA Account Owner Employee Funding Employee, Employer, Other Employee, Possible Employer Roll Over Year-to-Year YesNo PortableYesNo

7. 7 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.

8. 8 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.

9. 9 Account & Investment Options » Savings Account Option Interest 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.

10. 10 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? YearIndividualFamily 2011$3,050$6,150 Annual IRS Maximum (regardless of deductible)

11. 11 Internet Banking For a demonstration of Internet Banking, visit: http://hsabank.com/~/media/Files/Flash/ibanking_demo.swf

12. 12 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.

13. 13 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. YearCatch-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.

14. 14 Tax Savings Example Contribution$3,000 per year for 25 yrs Annual Medical Expenses$500 per year Tax Bracket28% (Federal) Average Interest Rate2% 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.www.hsabank.com

15. 15 Distribution Options » Debit card from Visa ® » Reimbursement from Internet Banking to an external account » HSA checks » Withdrawal Form » Mail to HSA Bank

16. 16 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.http://www.irs.gov/pub/irs- pdf/p502.pdfhttp://www.irs.gov/pub/irs-pdf/p969.pdf

17. 17 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

18. 18 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

19. 19 Spanish Resources  Forms & Documents  Educational Items  Customer Service www.hsabank.com/Spanish/

20. 20 Employees & Accountholders Client Assistance Center (800) 357-6246 askus@hsabank.com M – F, 7 a.m. – 9 p.m., CT Spanish Language Support (866) 357-6232 M – F, 7 a.m. – 9 p.m., CT Service and Support

21. 21 For more information, please visit www.hsabank.com What Does Your Future Hold?