Understanding Your Aetna HealthFund Health Savings Account (HSA)

Transcription

1 Understanding Your Aetna HealthFund Health Savings Account (HSA) Frequently Asked Questions (FAQs) THE BASICS What is a Health Savings Account (HSA)? An HSA is a tax-advantaged account that you own. With an HSA, you contribute funds on a pre-tax or tax-deductible basis. You then use the funds to pay for eligible medical expenses. To open an HSA you must have a qualified High Deductible Health Plan (HDHP). You must also meet other eligibility requirements. These FAQs will include the following information about the HSA. Contributing to your HSA Paying for eligible medical expenses Managing your account Understanding tax reporting Please read this information carefully. The accountholder website has more information about the HSA. After you read these FAQs, you may want to go to the website. If you do, click on the My Account tab. In the Quick Links section, click on the HSA 101 Video. If you have more questions, you may want to talk to your tax advisor. What are the benefits of having an HSA? By using HSA funds, you can save up to 30% or more on your health care costs. You can save your HSA funds. They are yours to keep, even if you change jobs. The account is FDIC-insured. This protects your savings. You can invest your funds. We offer a diverse range of mutual funds. Check with your employer to find out if these are available for you. Money you do not use stays in your account year after year. The funds continue to earn tax-free interest. ELIGIBILITY Am I eligible for an HSA? To be eligible for an HSA, you must meet certain requirements. You must have a qualified High Deductible Health Plan (HDHP). You cannot have any other health coverage. You cannot be claimed as a dependent on another person s tax return. You cannot have Medicare coverage. Note: If you contribute to an HSA, you cannot also have a health care Flexible Spending Account (FSA). You also cannot have coverage under a spouse s FSA. However, if your employer offers an HSA-compatible FSA then you may still be eligible for the HSA. An HSA-compatible FSA is limited to dental, vision and preventive care. It may also cover medical expenses after you have met your deductible. Please talk to your tax advisor if you have more questions. HSA_FAQ_AETNA Page 1 of 11

2 What is a Qualified High Deductible Health Plan (HDHP)? A qualified HDHP is a health care plan with the following requirements. A qualified HDHP has minimum deductible amounts. Here are the amounts for For self-only coverage, the deductible must be at least $1,300. For family coverage, it must be at least $2,600. The minimum deductible amounts may change each year for Cost-of-Living Adjustment (COLA). The HDHP must also have limits on out-of-pocket costs. For 2015, annual out-of-pocket expenses can be no more than $6,450 for self-only coverage. For family coverage, the out-of-pocket max is $12,900. These include deductibles and co-pays. A qualified HDHP can cover preventive care before you meet the deductible. Preventive care includes many shots, annual physicals and screening tests. The HDHP can have higher out-of-pocket limits (co-pays and co-insurance) for non-network services. CONTRIBUTIONS What is the most that I can contribute to my HSA? Each year, the IRS limits how much you can contribute to an HSA. Here are the limits for For individual coverage, the contribution limit is $3,350. For family coverage, the limit is $6,650. HSA accountholders age 55 and older can contribute an additional $1,000. This is the catch-up contribution. You can contribute up to the tax filing deadline (usually, April 15th). How much can I contribute if I do not have the HDHP for the entire year? How much you can contribute depends on when you had the HDHP. If you had the HDHP on December 1, then the Last-month rule applies. With the Last-month rule, if you are eligible on December 1 then you can contribute as if you were eligible for the entire year. If you contribute for the full year, then you will have to meet the Testing Period. This means that you must keep the HDHP through the end of the next tax year. Example: You have HDHP coverage starting on May 1. You still have that coverage on December 1 of the same year. You contribute the maximum amount allowed for your coverage level (self-only or family). You must have the HDHP through the month of December and all of the next year. This is the testing period. If you terminate the HDHP during the testing period, you will have to pay income taxes for the months that you were not actually eligible. In this example that would be for the months of January through April. You would also have to pay a 20% tax penalty on that amount. If you do not have an HDHP on December 1, then the Proration rule applies. Proration means that you will contribute just for the months that you are eligible. To prorate, you will first have to calculate your contributions on a monthly basis. The amount you may contribute for each month depends on what level of HDHP coverage (self-only or family) you have on the first day of that month. Here is the monthly break down for the 2015 limits. If you have self-only coverage, the monthly contribution is $ ($3,350/12 = $279.17) HSA_FAQ_AETNA Page 2 of 11

3 If you have family coverage, the monthly contribution is $ ($6,650/12 = $554.17) Example: On January 1, you enroll in family HDHP coverage. On May 1, you end that coverage. You then have a non-hdhp plan. Your maximum contribution for the year is $2, ($6,650/12 = $ x 4 months). You have until the tax filing deadline to contribute to the HSA. You may want to speak with your tax advisor. He or she can help you to figure out your contribution limit. What happens if I change my level of HDHP coverage during the year? How much you can contribute depends on the coverage with which you start and end the year. If you have self-only HDHP coverage on January 1 and end the year with family coverage, the Last-month rule applies. You can contribute the maximum amount allowed for family coverage, as if you had family coverage all year. If you do this, you will then have to meet the testing period. With the testing period, you must keep the HDHP through the end of the next tax year. If you start the year with family coverage and have self-only coverage by December 1, the Proration rule applies. You would have to prorate the months for family coverage. You then prorate for the months of self-only coverage. When you add the two together, you have the maximum amount you can contribute for the year. There is no testing period. Example: On January 1, you have family coverage. On August 1, you change to self-only coverage. You have self-only coverage on December 1. We will base this example on the 2012 contribution limits. For January through July, you can contribute $3, ($6,650/12 = $ x 7 months). For August through December, you can contribute $1, ($3,350/12 = $ x 5 months). Your annual limit is $5, Please talk to your tax advisor if you have additional questions. How do I contribute to my HSA? You may contribute to your HSA in different ways. If your employer offers it, you can have your contributions deducted from your paycheck. You let your employer know the amount you want to contribute. If you do this as an annual amount, your employer will prorate that amount over the number of paychecks in the year. You can use Electronic Funds Transfer (EFT). With EFT, you set up contributions from your checking or savings account into your HSA. You can do this one-time or monthly. Go to the My Account page. Click on the Make Contributions link. From there, you can set up the EFT. You can also get there from the Transfers tab. You can arrange for an EFT up to the IRS contribution maximum. Prior to your first scheduled transfer, you will need to activate your bank account by accessing the accountholder website and entering 2 trial credit amounts that Chase will deposit to your account. You can send a check. You received deposit slips with your HSA debit card and welcome materials. You can also get a deposit slip online. It is in the Forms and Documents section of the site. Once we receive the check, we credit the funds to your account by the third business day. HSA_FAQ_AETNA Page 3 of 11

4 You can roll over funds from another HSA or Archer Medical Savings Account (MSA). You can get a rollover form in the Tools & Resources tab. Once there, click on the Forms and Documents link. You may also call Customer Service for a rollover form. Their phone number is on the back of your HSA debit card. Send the completed form to your current MSA or HSA custodian. The form tells that custodian to transfer the MSA or HSA funds into your new HSA. You can do a one-time trustee-to-trustee transfer from your Individual Retirement Account (IRA). This transfer is considered a contribution to the HSA, and therefore is subject to the annual HSA contribution limits. The IRA transfer form is available in the Forms and Documents section of the site. You may also call Customer Service to get the correct form. Complete the form and provide it to your current IRA custodian. The form tells your IRA custodian to transfer your IRA funds into your open HSA. You have until the tax filing deadline to contribute to your HSA (usually April 15th). Who can contribute to my HSA? Anyone can contribute to your HSA. This means that you, your employer, your spouse or anyone else may contribute. The total of all the contributions cannot exceed the annual contribution limit. What if I contribute too much to my HSA? You are responsible for making sure that you do not contribute more than your contribution limit. This limit is based on your HDHP coverage (self-only or family), when you are eligible (for the whole year or part of the year) and your age. When you contribute too much to your HSA, you have excess contributions in your account. You have until the tax filing deadline to withdraw the excess contributions. To do this, use the Request for Return of Excess HSA Contribution form. This form is online, under the Tools & Resources tab. From there, click on the Forms and Documents link. You will have to pay income taxes on this excess amount and any interest. If you do not correct the excess contributions by the tax filing deadline, you may have to pay a tax penalty on the excess amount. If you do have excess contributions, you may want to speak with your tax advisor. Can I make a contribution for the prior tax year? You have until the tax filing date to contribute for a particular year (usually April 15th). WITHDRAWALS What is a qualified expense? Why is that important? You should use your HSA only for qualified medical expenses. Qualified medical expenses are generally for medical, dental and vision care. IRS Publication 969 has a section to help you understand qualified medical expenses. This information is available on the Tools & Resources tab. There are also quick links on your My Account page. They will provide more information on qualified medical expenses. This is important because you are responsible for using your HSA for qualified medical expenses. If you use your HSA for non-qualified expenses, you will have to pay income taxes on the amount. You may also have to pay an additional 20% tax penalty. Make sure you keep all receipts. You may need them to show how you use the funds. You have an online tool to help you organize your expenses. Go to Aetna Navigator. From there you can use the Medical Expense Tracker tool. Please talk to your tax advisor for guidance. HSA_FAQ_AETNA Page 4 of 11

5 How can I withdraw funds from my HSA? There are numerous ways to make distributions from your HSA. Debit Card: You received an HSA Debit Card when your account opened. You can use it wherever Visa is accepted. You can also use it an ATM to pay yourself back for a qualified medical expense. If you use it at a Chase ATM, there is no fee. If you use your card at a non-chase ATM, that bank will probably charge a fee. (Those fees can be between $1.00 and $3.00.) You can find a Chase ATM near you. Go to the My Account page and click on Find a Chase ATM. Online Bill Payment: Go to the Payments tab. In just a few clicks, you can set up payees and schedule one-time or repeating payments. Refer to your fee schedule for any related fees. Checks*: The HSA also gives you the option to use checks. If your doctor does not accept Visa debit cards, this is a convenient way to pay your doctor. Please call the number on the back of your HSA debit card to request an application. Checkbook fees do apply. Go to the Tools & Resources tab. Click on the Fee Schedule link to see the complete list of fees for your HSA. * Checks are subject to preapproval. How do I use my Aetna HSA Visa Debit Card to pay for medical care? Most of the time, you will not pay at the time of service. You should wait for the medical claim to process through the insurance company s claim system. The doctor s office will send you a bill requesting payment for your medical responsibility. You can write your debit card number on the bill and send it back to the doctor for payment. You can also use an HSA check if you have them with your HSA. Does my Aetna HSA Visa Debit Card have a daily withdrawal limit? The Aetna HSA Visa Debit Card has a daily withdrawal limit of $3,000. This includes ATMs and PIN-based purchases. Some ATMs may limit the amount you can withdraw in one transaction. If that happens, you may have to use the ATM more than once to withdraw up to your HSA daily limit. For signature-based purchases and cash advances, the daily limit is $5,000. Can I use this account for non-medical items? You can use the funds for non-qualified expenses. However, you will have to pay income taxes on that amount. You may also have to pay a 20% tax penalty. The tax penalty does not apply once you reach age 65, if you have Medicare coverage, or if you become disabled. The amount would still be subject to income tax. Do I need to have funds in my account prior to a medical expense? You do not need to have the funds in your account prior to the actual medical expense. You can contribute to your HSA after your medical expense occurs. To reimburse yourself, your HSA must be open at the time of the expense. Remember to keep a good record of all receipts and related expenses. HSA_FAQ_AETNA Page 5 of 11

6 MANAGING YOUR ACCOUNT How do I activate my card? You can activate your HSA debit card in one of two ways. You can go to the secure HSA accountholder website or call You will need the last four digits of the primary cardholder s social security number. You will also need his or her date of birth. Where can I use my debit card? You may use your debit card anywhere that Visa is accepted. This includes a doctor s office. You can also withdraw cash from your HSA. You can use the card at any participating ATM. How do I get my PIN? When you activate your debit card, we will give you directions for choosing your PIN. How do I change my PIN? If you forget your PIN, you cannot use your debit card at the ATM or for PIN purchases. You can still use it for signature purchases. You can change your PIN online. Under the Customer Center tab click on the Change PIN link. You can also change your PIN with the Card Activation Center. Their number is When prompted for the activation code, you will need to enter the last four digits of the primary cardholder s Social Security number. You will also need to enter his or her date of birth. Your next step will be to choose a new PIN. How can I get more cards for my family to use with this account? You may request debit cards for your spouse and eligible dependents. You can request the cards online. You can also call Customer Service at the number on the back of your HSA debit card. There may be a fee for the additional cards. Please refer to your Fee Schedule. It is online in the Tools & Resources section. Each additional cardholder will have access to all the funds in the HSA. They can also see certain information on the account. This includes transaction activity. Only the primary cardholder can see account transfers and online bill payments. How can I change the beneficiary on my account? A beneficiary will receive your HSA funds in the event of your death. You can add, remove or update your beneficiary online. Go to the Customer Center tab. From there, go to the Manage Account section. Select the Beneficiaries link. You can also use the Beneficiary Designation Form. Go to the Tools and Resources tab. Then click on the Forms and Documents link. HSA_FAQ_AETNA Page 6 of 11

7 What if I lose my HSA debit card or it is stolen? If your debit card is lost or stolen, immediately call This is the dedicated number for lost or stolen cards. This line is available 24 hours a day. Once you report your card as lost or stolen, HSA Customer Service will place a block" on the card. This will prevent any further card usage. We will also send you a new card with a new account number. There may be a fee for the new card. Please refer to your Fee Schedule. It is online in the Tools & Resources tab. My account has a debit card transaction that is not mine. What do I need to do? Please immediately call Customer Service using the number on the back of your HSA debit card. Can I set up a monthly EFT? You can schedule a recurring EFT for as long as needed. You can also set up a one-time EFT. You can do all of this on the secure HSA accountholder website. How can I change or cancel it a recurring EFT? If your EFT request has not yet processed, you can update or cancel the request online. Go to the Transfers tab. From there, go to the Account Transfer Activity screen. You can then add a new one if needed. When does an EFT post to my HSA? Once we process the EFT request, it can take up to three business days to complete. By the third business day, you should see the funds in your HSA. How do I start paying bills online? To use Online Bill Pay, you must first read and agree to the Online Bill Payment and Transfers Terms and Conditions. Once you agree to the terms and conditions, you will have access to Online Bill Pay. To schedule a payment, you must first add a Payee. A Payee is the entity to whom you want to send payment. Include all information about the Payee so we can properly deliver your payment. How often can I schedule an Online Bill Payment? You can schedule Online Bill Payment in different ways. The options are one-time, for a future date or repeating payments. You will set the process date. This is the date that you want us to start processing the payment. How long does it for a Payee to receive the Online Bill Payment? Funds are withdrawn from your HSA on the process date. If payment is with a paper check, it will take seven days to reach the Payee. If payment is electronic, it will take two days to reach the Payee. Please plan for this estimated delivery when setting the process date. HSA_FAQ_AETNA Page 7 of 11

8 How can I update, cancel or stop an Online Bill Payment? If the payment request is still in a Pending status, you can update or cancel the payment. You can do this in the Bill Payment Activity screen. If the payment process has started, you will have to call HSA Customer Service. Their number is on the back of your debit card. You can ask them to stop the payment. There may be a fee for this. What if I do not have enough funds in my HSA to cover an Online Bill Payment? On the Process Date, we will verify if there are enough funds to cover all payments scheduled for the day. If you do not have enough funds to cover a payment, we will not process the payment. If that happens, we will charge a Payment Failure Insufficient Funds fee to your account. Are investment options available? To invest your HSA funds, you must have a minimum balance in the account. You are then able to invest in a number of mutual funds. Each fund offers different types of securities, risks and rates of return. Once you move funds to your investment account, that money is not available to pay for eligible medical expenses. You can only pay for medical care from your HSA Cash Account. If you want to use funds in the investment account, you will have to move the monies back to the cash account. You can manage your investments online. You can purchase funds; exchange balances between funds; set up repeating investments; transfer funds back to your cash account; and see your investment activity. You can also call our registered representatives to place trades and other transactions. There may be a fee for phone transactions. How can I get more information about investments? You can get more information online. Go to the Investments tab. From there, click on the Learn About Investments link. You can also call HSA Customer Service. Their phone number is on the back of your HSA debit card. Why should I routinely check my HSA transaction activity? Your HSA allows electronic transactions through your HSA debit card. It is your responsibility to review your account on a periodic basis. If you see anything suspicious on your account, you should tell us immediately. If you do see something that does not look right, you have 60 days to report it. If you do not report it in 60 days, we may not be able to recover those funds. There are many tools to help you manage your HSA. You can use the Transactions tab to search for transactions. You can see the transactions back to the beginning of your account. You can also view previous account statements online. You may want to use our Online Account Alerts Service. The alerts can help you track the activity on your account. There are a number of alerts from which to choose. Click on the Alerts tab and find out more today. Is my personal information safe? With whom do you share my information? HSA_FAQ_AETNA Page 8 of 11

9 We take the safety of your personal information very seriously. We take many steps to keep your information secure. We only use your information for your HSA. You can find more information in the HSA Privacy Policy. Go to the Tools & Resources tab. Then click on the Forms and Documents link. Other than ATM fees, what fees or penalties am I responsible for? You may be responsible for monthly banking and transaction fees. You can view your fee schedule online. You can also read tips on avoiding these fees. Go to the Tools & Resources tab. Then click on the Fee Schedule link. Where should I go to get a copy of a past statement? You can find past statements under the Statements tab. You can also search for specific transactions under the Transactions tab. How do you calculate the interest rate? How frequently does the interest rate change? Your HSA earns interest based on the account balance. We compound the interest rate daily and credit it to your account monthly. Market conditions set the interest rate. The rate can change every month, based on these conditions. Each month, we will report the current interest rate. We show the interest rate on your monthly statements. You can also see it when you look at your transaction activity. Do I need to file claims with an HSA? No. You pay for qualified expenses with your HSA debit card, checks or Online Bill Payment. However, we recommend that you keep your receipts, in the event the IRS requests them. TAX INFORMATION Do I have to pay taxes on the money in my HSA? You do not have to pay taxes on the contributions to your HSA. In addition, as long as you use the funds to pay for qualified medical care you do not have to pay taxes on the distributions. The interest in your account is also tax-free. If you withdraw funds for non-qualified expenses, you will have to pay income taxes on the amount. You may also have to pay a tax penalty. However, in the following situations you would not have to pay the penalty once you turn age 65; when you have Medicare coverage; if you become disabled; at time of death. You would still have to pay the income taxes. Do I have to file a tax return for my HSA? You do have to report your HSA as part of your federal tax return. You will have to complete Form 8889: Health Savings Accounts. You may also contribute on your own with after-tax money. If you contribute on your own, these contributions may lower your taxable income. You will report all of this on your tax return. You may want to speak with your tax advisor. He or she can help you to understand how to file your tax return. HSA_FAQ_AETNA Page 9 of 11

10 Will you send me any forms that I can use with my tax return? We will report all of your HSA activity to you. We will also send this information to the IRS. By the end of May, you will receive Form 5498-SA. This form will show contributions for the previous calendar year. This allows any contributions made after January 1st for the prior tax year, to be included. Remember, you can contribution for the previous year until the tax filing deadline. If you use any of the funds in the HSA, we will send you Form 1099-SA. You can use these forms to complete Form You can also rely on the W-2 from your employer, as well as your own records. Information is also available online. Go to the Tools & Resources tab. There you will find Form 8889 and its instructions. The site also has other IRS information. Under the Transactions tab, you will find your year-todate contributions, distributions and tax summary. You will also be able to see the tax forms that we mailed to you. They will be available under the Statements tab. WHAT-IFS What if I do not spend all of my HSA funds? The funds in your HSA remain in the account. The funds will carry over into the next year. The funds will also continue to earn interest. If you have funds in the HSA Investment Account, they will also remain there year-toyear. What if I terminate with my current employer? Your HSA funds are yours to keep. This is true if you change jobs, retire or change medical plans. Funds in your HSA remain in the account. They carry over from year to year. You can continue to use your HSA to pay for qualified medical expenses for you, your spouse and your tax dependents. If you still have a qualified HDHP (maybe under COBRA or with a new employer), you may be able to continue contributions to your HSA. How much you can contribute depends on when you have the HDHP. If you have the HDHP on December 1, then the Last-month rule applies. If you do not have an HDHP on December 1, then the Proration rule applies. Refer to the question earlier in this FAQ list: How much can I contribute if I do not have the HDHP for the entire year? You may want to speak with your tax advisor. He or she can help you to figure out your contribution limit. What if I no longer have an HDHP? The funds in your HSA remain in the account. They carry over from year to year. How much you can contribute depends on when you have the HDHP. HSA_FAQ_AETNA Page 10 of 11

11 If you have the HDHP on December 1, then the Last-month rule applies. If you do not have an HDHP on December 1, then the Proration rule applies. Refer to the question earlier in this FAQ list: How much can I contribute if I do not have the HDHP for the entire year? You may want to speak with your tax advisor. He or she can help you to figure out your contribution limit. What if I want to close my account? To close your account, please call Customer Service. Their number is on the back of your HSA debit card. They will send you a form. You will have to complete this form to close the account, even if it no longer has a balance. If you have any questions with the form, you can call the number listed on the form. After we receive the form from you, we will close the account. Please allow 11 days for any remaining transactions to post to your account. If you have a balance left on the account, we will send a check or an electronic payment. We can send the funds to you or to your designated HSA custodian (if you have another HSA). With a check, please allow 7-10 days for it to arrive through the mail. Please note: Funds returned to you are distributions. Unless you have qualified medical expenses that equal the distribution amount or you deposit the funds into another HSA within 60 days, you may have to pay tax penalties. If you want to keep your HSA open, you can still use the funds to pay for qualified medical expenses. You can also save your funds until age 65. Once you are age 65, you can generally withdraw funds for non-qualified expenses without penalty. You should talk with your tax advisor for details. For more complete information about any of the mutual funds available within the HSA Investment Account, please visit the accountholder website or contact a J.P. Morgan Institutional Investments Inc. registered representative at Investors should carefully consider the investment objectives, risks, charges, and expenses of the fund. Please carefully read the prospectus, which contains this and other important information, before you invest or send money. Health Savings Accounts are administered by JPMorgan Chase Bank, N.A. Member FDIC. Mutual funds are introduced by, and HSA investment accounts are offered by, J.P. Morgan Institutional Investments Inc., member FINRA and SIPC, and an affiliate of JPMorgan Chase Bank, N.A. This service is available only to U.S. persons (including U.S. Citizens and U.S. Resident aliens) residing in the U.S. Mutual fund shares are: NOT FDIC INSURED, NOT PRODUCTS OF OR GUARANTEED BY THE BANK and MAY LOSE VALUE JPMorgan Chase & Co. All rights reserved. HSA_FAQ_AETNA Page 11 of 11