HSA/HDHP MEETINGS RCM&D. All Rights Reserved.

Transcription

1 HSA/HDHP MEETINGS August 22, 2016

2 What is a Health Savings Account? Pairs a compatible high-deductible health plan with a savings account for eligible individuals to help pay for qualified medical expenses Money goes in pre-tax, it grows tax-free, and comes out taxfree if used for qualified expenses, making it one of the best options for tax savings and retirement saving. DISCLAIMER: This is not a contract or policy. This overview of coverage is only a summary of benefits. If there are any differences between this policy and the group policies, the provision in the group policies will govern. Material regarding Health Savings Accounts discussed in this proposal is for general illustration and/or informational purpose only and is not to be construed as tax or legal advice. Therefore, the information should only be relied upon when coordinated with an individual professional. 1

3 What s an HSA? Health Savings Account - A savings account used in conjunction with a high deductible health plan (HDHP) that allows users to save money tax-free to pay for qualified healthcare expenses 2

4 Quick Facts About HSAs Very similar to a personal checking/savings account that is owned by the account holder, and can be used to pay for qualified medical expenses Individual or employer can fund the account Account balances can be carried over year-to-year (not use it or lose it ) You own the funds once money is deposited by your employer, it is yours The HSA is held at a trustee, bank, or insurance company. For Amherst County Public Schools, the product is called BenefitWallet (a Xerox subsidiary), custodial support of Bank of New York Mellon. 3

5 HSA Fees and Rates 4

6 How Does an HSA Work? Individual enrolls in an HSA compatible high deductible health plan (HDHP) Individual and/or employer make contributions to an HSA Individual accesses health care services Individual chooses whether or not to use money in their HSA to pay for out of pocket medical expenses Remaining HSA balances accumulate, earn interest and can roll over to be used for future medical expenses 5

7 What are the Advantages? Opportunity for eligible individuals to lower health plan premiums while still having the security of a health plan with an annual limit on out of pocket expenses More control over how to spend health care dollars Opportunity for eligible participants to save on taxes all money put into the HSA is tax-free and comes out taxfree if used for qualified expenses Opportunity to save for future medical expenses HSA belongs to YOU, is portable, and carries over year to year 6

8 Who may Participate? Must be covered by a compatible high-deductible health plan (HDHP) Cannot be enrolled in any part of Medicare (generally age 65) Cannot be covered by other health insurance that is not an HDHP (coverage for dental and vision is allowed) Cannot have a broad-based health Flexible Spending Account through employer or spouse s employer Cannot be eligible to be claimed as a dependent on another person s tax return joint filing is okay 7

9 What are the rules for HSA contributions? Must be made in cash can t pledge collateral like stocks and bonds Are not forfeitable can t use the account as collateral for a loan Contributions to the HSA are not subject to Federal Income Tax Your contributions will be taken out of salary pre-tax through the ACPS cafeteria plan Contributions can be made by the account holder, employer, or anyone else for eligible taxpayers 8

10 What are the rules for HSA contributions? Can contribute annually up to federal limit - contributions are not required. Maximum $3,350 ($3,400 for 2017) for Individual, $6,750 family for 2016 (no change for 2017) Additional catch-up contributions are allowed for those 55 years and older. ($1000 for 2016, pro-rated by months of eligibility) Can be made at any time throughout the year up to April 15 of the following year Can be invested and earn interest 9

11 How Can HSA Funds be Spent? Money spent is tax-free as long as it is used to pay for qualified expenses Can be used to pay qualified medical expenses that do not count toward the HDHP deductible, including vision, dental and other expenses. Can be used for spouse and tax dependents, even if they are not covered by the HDHP 10

12 What are Qualified Medical Expenses? Qualified Medical Expenses are described in section 213(d) of the Internal Revenue Service code Refer to IRS Publication 502 for examples: Health insurance premiums are not a qualified medical expense except: For HSAs, the following can be reimbursed tax-free: COBRA premiums Qualified long-term care premiums Health insurance premiums while unemployed and receiving unemployment Over 65 health premiums for employer sponsored plans 11

13 Can HSA funds be used for other things? Can also be used for non qualified medical expenses, but if the account holder is under 65, will be subject to income taxes and an additional 20% penalty. The account holder is responsible for keeping receipts and documentation to demonstrate to the IRS that the expenses were qualified medical expenses 12

14 HSA Distributions After Age 65 Individuals age 65 and older: HSA funds can be used, tax-free to pay: Medicare premiums (Including Medicare Advantage HMO) but not Medicare Supplement premiums out-of-pocket qualified medical expenses employee share of employer-based coverage HSA money can be used for non-medical reasons without the 10% penalty after age

15 HSAs and FSAs/HRAs Generally, a person who is covered by both a HDHP and an FSA or HRA is not eligible for an HSA Standard health FSAs violate the rule against having other coverage, you will not be able to rollover up to $500 for next year or file for reimbursement after unless: Exception: Limited purpose Health FSA (vision and dental only) ***ACPS will offer a limited purpose health FSA for anyone enrolling in the HSA through American Fidelity***Please see me after the meeting if this will potentially apply to you 14

16 At the Doctor s Office Member will show their Anthem ID card at physician s office Provider will bill Anthem for services rendered Once patient liability is determined, provider collects for balances owed Members can access their HSA to pay for out of pocket expenses or use another payment method of choice 15

17 At the Pharmacy Member goes to participating pharmacy and shows their Anthem card Member pays the full discounted cost of the prescription***with the exception of the preventive medications covered at 100% on the Lumenos HSA 977 plan offered*** Claim is automatically submitted to Anthem and processed against the medical benefit If deductible is not yet satisfied, the discounted cost is credited toward satisfying the deductible If deductible is satisfied, member pays 20% of the cost of medications until the out of pocket maximum is reached 16

18 Additional Considerations Individual is responsible for tracking expenses and monitoring HSA contributions and distributions Individual holds more responsibility for health care decisions. Anthem provides online tools to help with provider searches and comparative pricing of services Potentially may have more out of pocket expenses, especially if not fully funding the account You may also reference IRS Publication 969 for additional information: (select current product publication 969) 17

19 Questions? 18