HSA Eligibility » Individuals who are covered by an HSA-compatible health plan are eligible if they are: » Not covered by any other non-HDHP » Not claimed as a dependent on another person’s tax return. » Not enrolled in Medicare part A or B *Section 152 of the Internal Revenue Code excludes spouses from the definition of dependent.
Catch-up Contributions » Individuals and/or their spouses, over the age of 55 and not enrolled in Medicare can make an additional $1,000 catch-up contribution annually. Note: If a husband and wife are covered by a HDHP and both are over the ages of 55 and not enrolled in Medicare, they can both contribute the additional catch-up contribution if they each open an HSA.
Eligible Medical Expenses » An eligible medical expense is generally any expense incurred to maintain the health of you or your family » 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 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
Other Eligible Medical Expenses » Premiums for long-term care insurance » Limited to amount listed in 213(d)(10) » Premiums for "COBRA” » Premiums for coverage while receiving unemployment compensation » Premiums for individuals over age 65 » Retirement Health Benefits » Medicare Premiums
For Employees/Accountholders » Contributions » Contributions deducted from accountholder’s federal taxable income » Earnings » HSAs grow in the same tax-deferred manner as IRAs » Distributions » HSA funds used for eligible medical expenses are not included in the accountholder’s federal taxable income Tax Treatment of HSAs
For Employees/Accountholders » Distributions » Withdrawals for qualified medical expenses are tax- free. After age 65, funds may be withdrawn for any reason without penalty, subject to regular income tax. » Upon death of accountholder » If the spouse is the beneficiary, the HSA may transfer to the spouses name and remain a tax- favored account » If the beneficiary is not the spouse, the funds are paid to the beneficiary as a taxable transaction » If the HSA does not have a beneficiary, the funds are paid to the estate of the accountholder
Tax Savings Example Contribution$3,000/year for 25 years Medical Expenses$500/year Tax Bracket28% (Federal) Average Interest Rate2.00% For illustrative purposes only. Actual savings may vary. Visit www.hsabank.com and click on Calculate Savings for a personalized estimate.www.hsabank.com Tax Savings on Contributions:$17,500.00 Tax Savings on Earnings:$4,921.21 HSA Balance After 25 Years:$80,075.75
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
Self-Directed Investment Option » TD Ameritrade Corporate Services » Access to stocks, bonds and over 11,000 mutual funds » Trades are made online or over the phone » Transfer funds from your HSA to your investment account: » Online through Internet Banking » By calling the Client Assistance Center 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 the principal amount invested.
Mutual Fund Selection » Devenir Investment Advisors » Selection Options » Employer can choose to offer our standard selection of historically top-performing mutual funds » For an additional fee, employers can choose to select mutual funds similar to their 401(k) offering » Trades are completed online through HSA Bank’s Internet Banking system 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 the principal amount invested.
» Account statements » Periodic account inserts with valuable legislative information, account features, and more » IRS reporting » Year-end status report » 1099-SA (distributions) » 5498-SA (contributions) » Online Account Access through Internet Banking » Account balance and transaction history (Up to 18 mo. for convenient tax reporting) » View cancelled checks » Year-to-date information (Including a breakdown of contributions by source.) » Ability to download transaction history to Quicken or Money » Email confirmation of account opening and ongoing activity » Online address changes » Access to Online Contributions Accountholder Reporting
Calculation Tools » Is an HSA Right for Me » Allows you to compare a traditional health plan and an HSA qualified plan to determine potential savings http://www.hsabank.com/calculators/decision_tool.aspx http://www.hsabank.com/calculators/decision_tool.aspx » Future Value Calculator » Calculates tax savings on contributions and tax-deferred growth as well as the future value of your Health Savings Account http://www.hsabank.com/calculators/future_value.aspx http://www.hsabank.com/calculators/future_value.aspx
Account Support » Toll-free Bankline » 24-hour account access via touch tone phone (800)-565-3512 » Toll-free Client Assistance Center (800) 357-6246 7 a.m. – 9 p.m., CT, Monday – Friday » Toll-free Spanish Language Assistance Line (866) 357-6232 7 a.m. – 9 p.m., CT, Monday – Friday
For more information, please visit www.hsabank.com