Presentation on theme: "Consumer Driven Healthcare Health Savings Accounts Tax-Advantaged Health Care Funding Presented by Matt Holzemer Savage & Associates."— Presentation transcript:
Consumer Driven Healthcare Health Savings Accounts Tax-Advantaged Health Care Funding Presented by Matt Holzemer Savage & Associates
What is a Health Savings Account (HSA)? An account you own that you and / or your employer put money into for medical expenses now and in the future A High Deductible Health Plan (HDHP) works in conjunction with the savings account
HSA & HDHP HSA & HDHP Overview Use HSA to pay for routine expenses Once you meet deductible, your traditional, high deductible health plan (HDHP) begins to pay Use HSA for yourself, your spouse and your children Use HSA to save for future expenses You decide how to save and spend on healthcare
Every enrollee… receives triple tax savings on: contributions, earnings and withdrawals makes smarter financial & healthcare decisions is in control of personalized healthcare is rewarded for staying healthy has multiple resources to make informed decisions may obtain reduced health care premiums Advantages for HDHP & HSA Enrollees
Who is eligible for an HSA? You have a qualified high deductible health plan (HDHP) Youre NOT: Enrolled in Medicare A dependent on anothers tax return You adhere to contribution and distribution rules: Distributions are used for IRS qualified medical expenses Not covered by another health plan (some exceptions apply) CoverageMinimum HDHP Deductible Maximum HDHP Out- of-pocket Single$1,200$6,050 Family$2,400$12,100
HSA Contribution Amounts: 2012 Annual Contribution Maximum If age 55+, an additional: Self-only$3,100+ $1,000 Family$6,250+ $1,000 or +$2,000 (if both adults are 55+) The amount that can be contributed from all sources for 2012 is $3,100 for self-only coverage and $6,250 for family coverage, regardless of what month of the year you open your HSA account. These amounts are indexed annually.
How your HSA Works Enroll in your high deductible health plan (HDHP) Establish an HSA Choose how much to contribute to your HSA Start receiving care Pay via debit card or check Keep track of your expenses for tax return Funds roll over from year to year Resources to assist you Switch jobs? Take your HSA account with you.
Investing In Your Health You invest your HSA funds Funds roll over, allowing you to build up a balance for future expenses / self-funded amounts Tax benefits: Your payroll contributions are pre-tax Investment earnings are tax free Reimbursements are tax free Account is easy to use Debit cards or checks Low or no setup fees Easy to enroll
HSA Transaction Example Year 1 You contribute $1,500 Your employer contributes $1,000 Your account = $2,500 Your family deductible = $2,400 Your HDHP provides 100% coinsurance $250 Account pays for your doctor visits $950 Account pays for childs emergency room visit $700 Account pays for childs doctor visit and medications $500 Account pays for spouses medication $2,400 Total HSA Account funds used $2,400 Met your deductible – Plan pays 100% thereafter $100 leftover in HSA account to rollover to next year
HSA Transaction Example Year 2 You contribute $1,500 Your employer contributes $1,000 Your account = $2,500 Plus rollover funds $100 Total HSA funds = $2,600 Your family deductible = $2,400 Your HDHP provides 100% coinsurance Total year expenses = $2,100 Remaining $500 will roll over to year 3
Qualified Medical Expenses Based on IRC Section 213 Health insurance plan deductibles and coinsurance Prescription drugs Dental services Vision care – including glasses and lasik surgery Psychiatric and certain psychological treatments Long-term care services Medically related transportation and lodging Certain health premiums including COBRA This is a partial listing. IRS Publication 502 gives complete list.