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Health Savings Accounts


... to traditional health insurance; it is a ... State of Florida Employees ... A survey by America's Health Insurance Plans (AHIP) of its members selling ... – PowerPoint PPT presentation

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Title: Health Savings Accounts

  • Health Savings Accounts
  • What are they?
  • Why your financial institution should offer them.

What is an Health Savings Account?
  • A Health Savings Account is an alternative to
    traditional health insurance it is a savings
    product that offers a different way for consumers
    to pay for their health care. HSAs enable you to
    pay for current health expenses and save for
    future qualified medical and retiree health
    expenses on a tax-free basis.
  • You must be covered by a High Deductible Health
    Plan (HDHP) to be able to take advantage of HSAs.
    An HDHP generally costs less than what
    traditional health care coverage costs, so the
    money that you save on insurance can therefore be
    put into the Health Savings Account.
  • You own and you control the money in your HSA.
    Decisions on how to spend the money are made by
    you without relying on a third party or a health
    insurer. You will also decide what types of
    investments to make with the money in the account
    in order to make it grow.

What Is a High Deductible Health Plan
  • You must have an HDHP if you want to open an HSA.
    Sometimes referred to as a catastrophic health
    insurance plan, an HDHP is an inexpensive health
    insurance plan that generally doesnt pay for the
    first several thousand dollars of health care
    expenses (i.e., your deductible) but will
    generally cover you after that. Of course, your
    HSA is available to help you pay for the expenses
    your plan does not cover.
  • In order to qualify to open an HSA, your HDHP
    minimum deductible must be at least 1,000
    (self-only coverage) or 2,000 (family coverage).
    The annual out-of-pocket (including deductibles
    and co-pays) cannot exceed 5,100 (self-only
    coverage) or 10,200 (family coverage).

How much can I contribute to my HSA each
  • Your annual HSA contribution cannot exceed
    the deductible of your HDHP. For example, if you
    choose a plan with a deductible of 1,000, you
    may not deposit more than 1,000 in your HSA for
    that year. If you want to save more, you must
    choose an HDHP with a higher deductible. If you
    are age 55 or older, you can also make additional
    catch-up contributions (see catch up).
  • The most you can put into your account for
    2005 is 2,650 if you have single coverage and
    5,250 for a family. These amounts will be
    increased for inflation in future years.

If over 55, you can make catch-up
contributions to your HSA.
  • Individuals 55 and older who are covered by an
    HDHP can make additional catch-up contributions
    each year until they enroll in Medicare. The
    additional catch-up contributions to HSA
    allowed are as follows
  • 2005 - 600 2006 - 700 2007 - 800 2008 -
    900 2009 and after - 1,000
  • If both spouses are eligible individuals for the
    catch up they must each established an HSA in
    their name. If only one spouse has an HSA in
    their name, only that spouse can make a
    catch-up contribution.

HSA Qualified Expenses
  • Dental
  • Prescription Drugs
  • Vision
  • Doctors office visits
  • Hearing
  • Hospital bills
  • and many more qualified health care expenses

Recent HSA News
  • Beginning in 2006, Allen County employees will
    have the option of choosing a health-care savings
    account, or HSA, instead of a more traditional
    insurance plan for the countys nearly 1,900
  • A single employee would pay a 2.50 monthly
    premium but would have to meet a 1,000
    deductible. The county would contribute 500 to
    the account.
  • An employee plus one or more dependents would pay
    5 a month and have a 2,000 deductible. The
    county would put in 1,000 annually.

Recent HSA News
  • State of Florida Employees
  • Under the new HSA option, in the DMS example, the
    premium is 64 a month, or 768 a year. That's a
    savings of 1,392 - some of which the employee
    could prudently put into an HSA. The state then
    kicks in 1,000 to the account for family
    coverage (for single employees, state
    contribution is 500 a year and the premium is
    15 monthly).

Recent HSA News
  • A survey by America's Health Insurance Plans
    (AHIP) of its members selling Health Savings
    Accounts (HSAs) found 1,031,000 people were
    covered by HSA/HDHP (high-deductible health plan)
    products as of March 2005. That is more than
    double the figure reported by AHIP members in
    September 2004.
  • Eight percent of 555 large employers surveyed by
    the human capital consulting firm Watson Wyatt
    and the National Business Group on Health
    currently offer HSAs, and 18 percent plan to
    offer them in 2006.

Recent HSA News
  • Proponents of Health Savings Accounts (HSAs)
    predicted they would revolutionize the health
    marketplace. Now, less than two years after
    becoming law, more than a million people own
    HSAs. That's twice as many as in September 2004,
    according to a study released in May by the trade
    group America's Health Insurance Plans.
  • By most accounts, HSAs are having an enormously
    beneficial effect on the design of health
    insurance in this country. Instead of an employer
    or insurer paying medical bills, more than one
    million people are managing some of their own
    health care dollars.

Trustee or Custodian Responsibility
  • It is the final responsibility of the account
    holder, not the trustee or the custodian, to
    determine if deposits have exceeded the maximum
    allowable amount.
  • It is the responsibility of the account owner to
    notify the custodian or trustee if there has been
    excess deposits made, and it is the
    responsibility of the account owner to request
    the withdrawal of those funds, and the payment of
    income tax on those funds and the a pro-rata
    share of the earnings, and the payment of the 10
    penalty tax.

Trustee or Custodian Responsibility
  • The trustee or the custodian is not required to
    determine whether the distribution is for the
    payment or reimbursement of qualified medical
  • Only the account owner is responsible for
    substantiating that any distribution is for
    qualified medical expenses and must retain
    records sufficient to show, if required, that the
    distribution is for a qualified medical expense.
  • Reporting requirements for financial entities
    holding HSA funds are relatively simple.
    Trustees, custodians and health savings account
    administrators need to file two IRS forms, one
    for distributions from the HSA (1099-sa), and one
    for contributions to the HSA (5498-sa).

  • Website
  • HSA forms
  • 800 number
  • 10 hour customer service
  • hsa Rx Drug Card-Real Time Pricing
  • Investment options available optionsXpress
  • Section 125 plan
  • IRS updates 
  • Help with seminars and speakers

  • Letters
  • Brochures
  • IRS Updates
  • PowerPoint
  • Press releases
  • hsa Road Rules

Fees Interest Rates
  • HSA set up fee
  • Monthly Fee?
  • Interest Rates
  • Investment Options
  • You decide what's right for you.

  • Call 262-348-1300 to see how you could be
    offering HSA to your customers.
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