2. Health Savings Accounts (HSAs)

3. HSA Accounts were signed into Law on Dec. 8 th, 2004 as part of the Medicare Rx-Bill

4. What are the Contribution Rules and Tax Treatment of an HSA?  An HSA is generally exempt from tax (like an IRA or MSA) as long as a High Deductible Health Plan (HDHP) exists  Contributions may be made annually up to the lesser of HDHP deductible amount or $3050 single ($6150 Family)  HSA account is owned by the individual not the employer  Both the employer and employee may contribute to the deductible  Withdrawals may be made without tax consequences to pay for qualified medical expenses and in some instances for insurance premiums (COBRA & LTC)  Un-used account balances will carry over from year to year

5. Who is Eligible to Open an HSA?  Anyone who is covered under a qualified High Deductible Health Plan (HDHP)  Generally Anyone under the age of 65 (not Medicare eligible)  Cannot be claimed as a dependant on another persons tax return  Not covered by any other health plan  Injury or Illness Specific plans are allowed

6. Money Spent on Medical Care vs. Percentage of U.S. Population Money Spent on Medical Care Annually Percentage of US Population No Medical Expense33% $1 - $50040% $501 - $10009% $1001 - $20007% $2001 - $50005% $5001 - $10,0003% $10,000 - $25,0002.25% $25,000 - $50,0000.50% $50,001 – And Up0.25%

7. What are the Elements of an HSA?  High Deductible Insurance (Established with the Insurance company)  Deductible Fund (Established at a Financial Institution)

8. What is Considered a High Deductible Health Plan?  Annual Deductible of at least $1200 for an individual and $2400 for a family  Annual out of pocket not in excess of $5950 for an individual and $11,900 for a Family  NO FIRST DOLLAR BENEFITS! – Deductible must apply to all benefits with the exception of preventative care

9. What are Some of the Expenses Covered Under an HSA?  Acupuncture  Alcoholism  Ambulance  Chiropractor  Home Care  Telephone  Wheelchair  Weight-Loss Program

10. What are Some of the Expenses Excluded From an HSA?  Baby Sitting  Controlled Substance  Cosmetic Surgery  Diaper Service  Hair Transplant  Drugs from other Countries  Nutritional Supplements  Funeral Expenses  Health Club  Hair Transplant  Teeth Whitening  Swimming Lessons  Veterinary Fees  Maternity Clothes

11. How will a HSA Work for Me?  There will be an Administrator for the account, usually a bank  Participants receive a Debit Card (Visa/MC Logo) with Deposit Slips  May have a Statement mailed monthly  Will have access to a tax deferred savings account that will receive a yield or interest tax deferred  May take money out of fund with no penalty at age 65

12. What are the Advantages of Having a HSA? For the Insured/Owner  Tax Deductible  Tax Deferred  Forced Accumulated Savings for Retirement  No co-payments once total deductible and OOP Max is met in savings account  Insured better manages his/her trips to a physician

13. Thank You For Your Attention