Transcript Health Savings Accounts - Consumer Driven Healthcare

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 Overview
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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
Advantages for HDHP & HSA
Enrollees
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
Who is eligible for an HSA?
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You have a qualified high deductible health plan (HDHP)
Coverage
Minimum
HDHP
Deductible
Maximum
HDHP Outof-pocket
Single
$1,200
$6,050
Family
$2,400
$12,100
You’re NOT:
 Enrolled in Medicare
 A dependent on another’s 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)
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
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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
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Switch jobs? Take your HSA account with you.
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Investing In Your Health
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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 child’s emergency room visit
$700
Account pays for child’s doctor visit and medications
$500
Account pays for spouse’s 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
Your family deductible = $2,400
Your HDHP provides 100%
coinsurance
Plus rollover funds $100
Total HSA funds = $2,600
Total year expenses = $2,100
Remaining $500 will roll over to year 3
Qualified Medical Expenses
Based on IRC Section 213
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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.