1. HSA Overview

2. Overview HSA What does it stand for?Health Savings Account Who "owns" it?Employee Who funds it?Employee, HCC and/or qualified family members What type of corresponding health plan is allowed?H.S.A's are only available with high deductible health plans. Can unused amounts carry over from year to year?Yes. The individual owns the account and immediately owns any contributions made to it, regardless of the source or timing of the contribution. Is the account portable between employers?Yes. The individual owns the account and takes it when leaving employment. Rollover must be completed within 60 days.

3. HSA Does interest accrue?Interest can be accrued tax deferred in qualified H.S.A's. Is the account subject to COBRA continuation?No, although unused amounts can be used post- termination including payments for COBRA premiums. How is it funded?HCC or employee deposits funds directly into the employee-owned account. What is the contribution amount?2009 limits are $3000 for individuals. $5950 for families. ($625 contributed by HCC) Is there a "catch up" contribution provision for older workers?Employees between the ages of 55 and up to 65 may contribute $1000 to the account per year until entitled by Medicare at age 65.

4. HSA Is a pre-tax salary reduction to fund account allowed?Yes. Is Vesting Allowed?An employee is always 100% vested in these funds. Do non-discrimination rules apply?Comparable contributions (equal dollar amounts or equal percentage of deductible) must be available for participating employees. What is the tax treatment for employers?HCC contributions are excludable from income for tax purposes. Employee contributions, through a payroll deduction, are not subject to employer FICA and other employment tax purposes. What is the tax treatment for employees?Employee contributions are tax deductible up to the lesser of the qualified annual deductible amount or $3000 for individual coverage and $5950 for family coverage. Account distributions are tax-free as long as funds are spent on health care defined under 213(d) of Internal Revenue Code (IRC).

5. HSA What expenses qualify for distribution?Expenses defined under 213(d) of IRC except for health insurance premiums. However, health insurance premiums do qualify for distribution if : (1) the premiums are for COBRA or long-term care or (2) the individual is receiving unemployment compensation or is an eligible Medicare retiree. Can funds be used for non-medical expenses under age 65? Non-medical distributions are included in gross income and subject to a 10% penalty. Only exception allowed is non-healthcare-related distributions for those who are disabled or deceased. Can funds be used for non-medical expenses over age 65? Yes, non-healthcare-related distributions are included in gross income but are not subject to a penalty. Can COBRA premiums be reimbursed from fund?Yes. Distributions to pay premiums for COBRA are tax-free. Must a medical expense be incurred during the plan year the contribution is made? No. However, no reimbursements can be made for expenses incurred prior to the account being established.

6. HSA Is the annual amount of the contribution available on the first day of coverage? No. Only the amount contributed to date is available for reimbursement. Is the use of a debit or store value card allowed? Yes. Is employer substantiation required?No. The burden is on the employee to substantiate that the expense has been incurred, the amount of the expense and its eligibility. Integration with other accounts?HSA’s and FSA’s cannot be used together. Can Domestic Partners Be Eligible?No