What is an HSA?

2. What is an HSA? Checking Account Health Savings Account Savings Account Retirement Accounts

3. What is an HSA? • Individually owned savings account • Contributions, distributions, interest earnings – tax free • No maximum on amount that can be accumulated • Pay for qualified medical expenses for spouse & tax* dependents. (Tax dependents as defined by the IRS.) • Portable

4. Tax Free – Qualified Distributions “Qualified medical expenses” spouse & tax dependant children (even if not covered under HDHP) • Deductible • Co-insurance/Co-pay • Over the counter drugs (Over-the-counter medication and drugs will only be eligible if prescribed by a physician, without regard to whether the drug or medication is available without a prescription) • Dental Expenses • Vision Expenses

5. Tax Free – Qualified Distributions “ Other qualified medical expenses” • Health plan coverage while receiving federal or state unemployment benefits. • COBRA continuation coverage. • Medicare premiums: Part A, B, C & D • LTC premiums (portion of) • Individuals are responsible for keeping supporting documentation as with any other tax deductions.

6. Tax Free - Distributions • Even if account holders have not saved enough in HSA to pay for an expense, can always withdraw funds later • There is no deadline on reimbursements as long as expenses were incurred after HSA effective date • There is no requirement to use HSA funds for all expenses • It carries over through the years!

7. Maximum Contribution Per Tax Year Maximums indexed annually by Treasury Department $1,000 Additional Contribution if you are age 55 and older!

8. How Does An HSA Work? Requirements to Contribute to an HSA: • Must have a qualified HDHP to contribute to an HSA • Cannot be enrolled in Medicare • Cannot be claimed as a tax dependent on anyone’s else’s tax return • Cannot have any other coverage that pays first dollar expenses below the deductible (Ex: GP-FSA through employer or spouse, HRA, access to an on-site clinic or Tribal clinic, Tri-Care or VA benefits)

9. “Limited Purpose” Health FSAs &HSAs HSA • Deductible • Co-ins/Co-Pay • Over-The-Counter “Limited Purpose” Health FSA • Vision • Dental

10. HSA vs. FSA Medical Reimbursement – FSA • Account set up by employer • Annual amount available first day of plan year • No mid-year changes without a qualifying event • Must use the annual amount within the plan year • Receipts must be submitted and claims adjudication required • Cannot accrue interest • Subject to ERISA • Unused FSA balances are forfeited HSA • Tax-exempt trust/custodial account • Funds must be deposited before using • HSA contributions can be changed throughout the year (IRS sets limits – indexed every year) • Balances roll year-to-year. No limit on accumulation. • Account holder responsible for keeping receipts and determining eligibility • Interest can be applied • Not subject to ERISA unless employer takes action that triggers it. • Account holder dies: Spouse becomes owner. Otherwise, beneficiary claims as income.

11. AF Health Services Administration • Interest Rates HSA • Account balances above $2,500 • Mutual funds investments available • Minimum amount to move $50.00

12. AF Health Services Administration • 2 Debit Cards • Account Summary available 24/7. Account Statement mailed quarterly. • Unlimited on-line withdrawal. • Ability to upload your receipts to your account • No overdraft fees • Personalize customer service • Some miscellaneous fees may apply HSA

14. American Fidelity HSAs

15. American Fidelity HSAs ESB-662-0710

16. American Fidelity HSAs Check your account frequently – keep information up-to-date.

17. American Fidelity HSAs • After enrollment • Welcome packet mailed 1-2 weeks prior to HSA effective date. • Debit card mailed within 1-2 days of HSA effective date.

18. After Enrollment • A debit card will be ordered • Use it as a credit card • Can only use at medical providers such as doctors, pharmacies, hospitals, etc.

19. American Fidelity HSAs Learn more: • www.afhsa.com • www.irs.gov • http://www.treas.gov/offices/public-affairs/hsa/ Contact us: • HSA-Support@af-group.com • 405-523-5699 • 1-866-326-3600

20. Health Savings Accounts Thank You Neither Health Services Administration nor American Fidelity Assurance Company are providing tax advice. Individuals with an interest in HSAs should contact their tax advisor.