Transcript Slide 1
Considering a
Health Savings
Account?
Basic HSA Plan Concept
Part 1: High Deductible Health Plan
HSA
Concept
For 2009
Single
Family
Min. Deductible
$1,150
$2,300
Max. Out of Pocket
$5,800
$11,600
For 2010
Single
Family
Min. Deductible
$1,200
$2,400
Max. Out of Pocket
$5,950
$11,900
Intended to
cover serious
illness or injury
Part 2: Health Savings Account
For 2009
Max. Contribution
For 2010
Max. Contribution
Single
Family
$3,000
$5,950
Single
Family
$3,050
$6,150
Made by: Employer, Employee, and/or other party
Individuals can contribute the maximum regardless of
their deductible.
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Can pay for
eligible expenses
not covered by
the health plan
HSA Eligibility
Covered by qualified high-deductible health
plan (HDHP)
Not covered by any other non-HDHP
Not claimed as a dependent on another
person’s tax return.
Not enrolled in Medicare
*Section 152 of the Internal Revenue Code excludes spouses from the
definition of dependent.
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What is the catch-up contribution?
Accountholders who are age
55 or older and not enrolled
in Medicare can make catchup contributions.
Year
Catch-up Amt.
2009+
$1,000
Note: Spouses of accountholders who are 55 or older and meet the IRS eligibility
requirements can open their own HSA and make a catch-up contribution.
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What are Qualified Expenses?
A Qualified Expense is generally a medical expense
incurred for you, your spouse or your dependents.
A complete list is provided 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 also considered eligible expenses for HSA
purposes.
Note: HSA does not provide tax advice. Please consult a qualified tax advisor with questions.
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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 Plan Premiums
Medicare Premiums
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Tax Treatment of HSAs…
For Employees/Accountholders
Contributions
Excluded (pre-tax) or
deducted (after tax) from
federal taxable income
Earnings
HSAs grow in the same taxdeferred manner as IRAs
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Tax Treatment of HSAs (Continued)
For Employees/Accountholders
Distributions
Withdrawals for qualified medical expenses are always taxfree. 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 spouse’s 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
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Tax Savings Example
Contribution
$3,000 per year for 25 yrs
Annual medical expenses
Tax Bracket
$500 per year
28% (Federal)
Average interest rate
2%
TAX SAVINGS ON CONTRIBUTIONS =
$17,500.00
TAX SAVINGS ON DEFERRED GROWTH =
$4,921.21
ACCOUNT BALANCE AT THE END OF 25 YEARS =
$80,075.75
For illustrative purposes only. Actual savings may vary. Visit www.hsabank.com
and click on Calculate Savings for a personalized estimate.
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HSAs, HRAs, FSAs
HSA
HRA
FSA
Account
Owner
Employee
Employer
Employee
Funding
Employee,
Employer, Other
Employer
Employee,
Possible
Employer
Yes
Generally
No
No
Yes
Generally
No
No
Roll Over
Year-To-Year
Portable
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Advantages of an HSA
For an Employee
Funds roll over year to year
No need to “use it or lose it”
Tax benefits on the contributions, earnings, and
distributions
Potential for increased take-home pay
Long-term investment opportunity
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Savings Account Option
Interest bearing “bank” account
Accounts are opened as an FDIC-insured
bank account through Webster Bank, N.A.
Current interest rate and annual
percentage yield information is available
on our website, www.hsabank.com or by
calling (800) 357-6246.
Interest Rate and APY are subject to
change, at our discretion, at any time. Fees
may reduce earnings.
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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.
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Mutual Fund Selection
Devenir Investment Advisors
Selection Options
Employer can offer our standard selection of
historically top-performing mutual funds
For an additional fee, employers can 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.
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Accountholder Communication
and Reporting
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)
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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
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://hsabank.com/HSABank/Education/HSA_Right_For_Me.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://hsabank.com/HSABank/Education/futurevalue
HSAFORM
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Account Support
Toll-free Bankline
24-hour account access via
touchtone phone
(800)-565-3512
Toll-free Client Assistance Center
(800) 357-6246
7 a.m. – 9 p.m., Central Time, Monday – Friday
Toll-free Spanish Language Assistance Line
(866) 357-6232
7 a.m. – 9 p.m., Central Time, Monday – Friday
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Thank You for Considering…
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