Optional Health Care Plan H S A Q&A Fall 2013

Optional Health Care PlanH S A Q&AFall 2013 A Qualified High Deductible Health Care Plan (QHDHCP) with a Health Savings Account (H S A)

Optional Plan – H S A Q&A Who owns the H S A? A: You do Note: The account is portable

Optional Plan – H S A Q&A Are employee contributions pre-tax? A: Yes, up to the IRS maximum Note: Employees over age 55 may make catch-up contributions

Optional Plan – H S A Q&A How much can I contribute to my H S A? A: In 2014: Single individual $3,300 Family $6,550 55+ catch up amount $1,000

Optional Plan – H S A Q&A Is there a deadline for H S A contributions? A: Contributions for current taxable year may be made until April 15 of following taxable year

Optional Plan – H S A Q&A Can money be taken out of the H S A at any time? A: Yes, tax free to pay qualified medical expenses Note: non-qualified expenses are taxable income and incur a 20% penalty

Optional Plan – H S A Q&A What is a qualified medical expense? A: Expenses that would generally qualify for IRS medical and dental expenses income tax deduction

Optional Plan – H S A Q&A Whose medical expenses can the plan be used to pay? A: Any family member reported as a dependent on your tax return Note: If the family member is not covered under your plan, the expenses will not be applied to your deductible Note 2: Adult children up to age 26 may qualify as a dependent for insurance purposes but cannot qualify for the H S A if they are not dependents on the parent’s tax return

Optional Plan – H S A Q&A Who can put money into your H S A? A: Anyone Note: Only employee’s contribution is tax-free Note 2: Only account holder may receive tax deductions

Optional Plan – H S A Q&A Does the H S A account balance earn interest? A: Yes, and tax-free

Optional Plan – H S A Q&A Is the account balance FDIC insured? A: Yes, except for funds in investments

Optional Plan – H S A Q&A What are the tax benefits of the H S A? A: There is triple tax savings Contributions are not taxed and reduce your taxable income Withdrawals are not taxed Earnings are not taxed

Optional Plan – H S A Q&A What happens to unused funds at the end of the year? A: Funds are rolled over year to year without penalty

Optional Plan – H S A Q&A Can I rollover my HRA funds into the H S A? A: A one-time rollover can be made by the employer Note: The rollover does not affect the annual limit for H S A contributions

Optional Plan – H S A Q&A Are there other ways to fund the H S A? A: A one-time rollover may be made from a Roth IRA to the H S A Note: The transfer is limited to the H S A maximum annual contribution for that year

Optional Plan – H S A Q&A Can married couples who are employees have different coverage? A: Yes, but if one employee elects an FSA the other cannot elect an H S A

Optional Plan – H S A Q&A Can an employee participate in the H S A with a spouse covered under a different employer’s plan? A: Yes, as long as the spouse does not participate in an FSA Note: a limited scope FSA, such as for vision/dental benefits only, is permitted

Optional Plan – H S A Q&A Can employee and spouse access H S A funds if spouse has coverage with a different employer? A: Yes, a spouse would be considered a dependent as long as the spouse is a dependent for tax purposes

Optional Plan – H S A Q&A What happens if employee leaves job or retires? A: Since the account is portable, you take it with you wherever you go Note: Must have HDHP to continue to make contributions to H S A

Optional Plan – H S A Q&A What if I die? A: The beneficiary receives the H S A account to continue use as an H S A if it is a spouse Note: If the beneficiary is not a spouse the value of the H S A is taxable to the beneficiary or estate

Optional Plan – H S A Q&A How do I access the H S A account? A: A debit card will be issued to pay providers directly Also, expenses may be submitted for reimbursement after the provider bills you

Optional Plan – H S A Q&A What happens if my H S A account does not have enough funds to pay a bill? A: The account will not issue funds prior to deposit of funds Note: Scheduled payments can be set up to the provider from the H S A

Optional Plan – H S A Q&A Should I pay the doctor at the time of service if my deductible is not met? A: Your bill may be sent by the provider to the insurance company first for repricing. Then it will be returned to you for payment at the discounted rate. Note: The provider may require partial or full payment up front

Optional Plan – H S A Q&A How will I track my H S A funds? A: The H S A administrator will make a periodic statement available to you

Optional Plan – H S A Q&A Other Questions? Let us know and we’ll get an answer!!

Optional Health Care Plan H S A Q&A Fall 2013