Transcript The new health savings account (HSA) option @ June 1, 2007

Health Savings Account (HSA)
Overview
Evergreen Park Elementary
School District 124
What is an HSA?
HSA = Health Saving Account.
Your own health care funds in a
tax-free custodial account that
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May be used to reimburse current
health care expenses, and / or
Saved for future health care
expenses.
The Health Savings Account
To manage the risk of the HSA plan’s higher
deductibles the Board of Education (tax-free)
contributes specified amounts to each employee’s
account based on the coverage tier selected.
 The amounts are designed to offset the
differences in financial exposure from Plan E and
are as follows:
 Self-only coverage – $1,500
 Employee + 1 dependent coverage - $1,700
 Family coverage – $2,200
 Staff may make additional contributions on a pretax basis to their accounts.
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HSA savings vs PPO
Monthly Prem. Employee
Annual Prem. Employee
PPO E Plan
Single
E+1 Family
HSA Plan
Single
E+1 Family
$139
$1,668
$55
$660
$302
$354
$3,624 $4,248
$1,008
$1,908 $2,244
$1,500
$2,500 $3,000
$1,500
$1,700 $2,200
$461 $541
$5,532 $6,492
Net Prem. Savings per Year by Employee
Annual Deductible
$340
$680
Board Contribution to Your Health Savings Account
$680
Max out-of-pocket limits
PPO
HSA
Single
$1,188
Board Share
Premium Savings
Net
Savings - HSA vs. PPO
$3,000
($1,500)
($1,008)
$492
$696
Family
$2,376
Board Share
Premium Savings
Net
Savings - HSA vs. PPO
$6,000
($2,200)
($2,244)
$1,556
$820
Note: Single parent coverage savings is $1,484.
HSA / PPO plan comparison
VERY IMPORTANT:
The provider network for the HSA
plan will be the very same PPO
network that PPO plan participants
currently have.

PPO vs HSA – Takeaway
BECAUSE of the Board’s contribution
to the account, whether you have
high, average, low, or no claims, this
option financially benefits
EVERYONE.
HSA / PPO plan comparison
Under the HSA plan after one’s deductible has
been met:

Most in-network expenses – hospital, surgery,
and diagnostic testing, will be covered at
100%. (PPO 90%)

Outpatient emergency care will be paid at 90%
(PPO 90%)

Prescription drugs and durable medical
equipment are typically paid at 80%
(PPO $7/$14/$30)
HSA / PPO plan comparison - Rx
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HSA plan
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Member pays a negotiated (discounted) price at the
point of purchase.
One may pay for the prescription with one’s HSA debit
card.
The amount of the purchase is credited toward the
plan deductible.
PPO plan

Member pays a copay that’s currently not credited
toward either one’s deductible or the plan’s out-ofpocket limit.
Preventive care benefits under HSA
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IMPORTANT POINT: Routine annual
physicals, well-baby exam, immunizations,
and other preventive health services as
defined by the USPSTF (United States
Preventive Services Task Force) are
covered under HSA plans at 100% without
cost sharing.

(See www.uspreventiveservicestaskforce.org/uspstf/uspsabrecs.htm
for further details.)
The Custodial Account
The custodial account through First
American Bank offers the following
features:
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Interest bearing account
No minimum deposit
No monthly fee provided there is a valid email
address associated with the account
Free debit card
Free online banking
Free bill payment
Free eStatements
Account ownership & control

All monies contributed to HSAs –
whether made by one’s employer or
by the employee – are from Day 1
exclusively owned by the employee.

One’s employer has NO incidence of
ownership, control over, or access to
any of the funds that the employer
contributes.
HSA vs. Healthcare FSA
Under HSA rules one may “use it (the
account) or save it” (unused balances
simply roll over). There is no
requirement with HSAs like there is
under the healthcare FSA rules to spend
the account prior to the end of the plan
year or forfeit the remaining balance.
Under FSAs this is commonly referred to
as the “use it or lose it” rule.
What if HSA funds are insufficient?
One may only spend what is in their
HSA. Therefore, if an expense is more
than one’s employer’s contribution or
the accumulated savings in the account:

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Take money out of savings or use a personal
credit or debit card to pay what’s owed
Then reimburse yourself from your HSA as
funds are subsequently contributed to the
account
Permitted uses of HSA funds
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Prior to the age of 65
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Funds may be withdrawn tax-free for qualified
medical expenses.
65 or older (Medicare)
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Funds in account may either be used to:
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Reimburse health care expenses, including the
cost of Medicare premiums for B and D and long
term care insurance, or:
Generate income (which is taxable like an IRA)
Pre-65 tax penalty
If funds are withdrawn under age of
65 for any reason other than to pay
for or reimburse qualified medical
expenses:
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Subject to a 20% non-deductible tax
penalty
Entire distribution (including the penalty
amount) is also subject to income taxes.
Accessing HSA funds
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Use the free debit card that comes with
the account.
Pay the provider by check (from the
account) – Note: Paper checks are
available for an additional cost.
Pay the provider with your credit card or
check and reimburse yourself from your
HSA through BillPay or by writing a
check from the account.
HSA Conflict with FLEX Acct.
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If in HSA and want to continue
FLEX account
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FLEX will become a “limited scope”, meaning
that one may not use FSA funds to
reimburse the HSA plan’s deductibles.
Suggest moving FLEX contributions to HSA
– it’s yours to keep.
Questions?
?