Health Savings Account (HSA)

Transcription

1 Health Savings Account (HSA) ENROLLMENT GUIDE Offering you more choices for managing your healthcare dollars 1 1

2 ConnectYourCare & Consumer-Directed Healthcare Congratulations you may now begin taking advantage of Consumer-Directed Healthcare with a Health Savings Account (HSA) from ConnectYourCare! Who is ConnectYourCare? ConnectYourCare is a leading administrator of Consumer- Directed Healthcare (CDH) accounts. ConnectYourCare was founded to advance consumers choice, convenience and control over healthcare. ConnectYourCare provides a healthcare payment card, giving you a convenient way to pay for qualified medical expenses. We also provide a member website, called the CDH Portal, where you can manage your account and access a wealth of health information, including care and disease guides, a medical encyclopedia and hospital and prescription comparison tools. What is Consumer-Directed Healthcare? Consumer-Directed Healthcare (CDH) is a new way of looking at health insurance. It was created to provide consumers with better access to reliable health information, improved resources for making healthcare decisions and more control over their healthcare dollars. Society teaches us to be savvy consumers. Researching products before buying has become an automatic step for the majority of our purchases. Our involvement in healthcare decisions, however, remains among the lowest of all our consumer purchases. With CDH, you become more engaged in your healthcare decisions and have access to tools that can help you make smart spending choices. How is Consumer-Directed Healthcare different from traditional healthcare? CDH provides you with greater control over your healthcare expenses through healthcare savings accounts, such as a Health Savings Account (HSA). These accounts let you choose how to spend your healthcare dollars. How can a CDH account help me and my family? You will have more control over how your healthcare dollars are spent, a better understanding of healthcare costs, access to reliable health education tools that enable you to make better healthcare decisions, and the potential to save thousands of dollars for retirement. 2 2

3 Health Savings Account Overview What is a Health Savings Account (HSA)? A Health Savings Account (HSA) is like a 401(k) for healthcare. HSAs are tax-advantaged accounts that accumulate interest and can earn investment returns. The funds can be used to pay for qualified medical expenses today or can be saved for future expenses. It is owned by you, is 100% vested from day one, and lets you build up savings for future needs. To be eligible to enroll in, you must be covered by a qualified High Deductible Health Plan (HDHP). Account Advantages Triple tax savings. Contributions, whether they are made by you or your employer, are not taxable to you, and investment growth is not taxed while it is in the account. Distributions are not taxable as long as they are spent on eligible healthcare expenses incurred after the HSA was established. Unlike traditional insurance where you only benefit if you use it, with, you can spend your HSA on today s expenses, or save and invest your HSA funds for future expenses or for retirement! Interest and Investments. Not only will your HSA balance earn interest each month, but once you meet the minimum balance, you will have the option to invest in nationally recognized mutual fund families. (Refer to additional investment information.) Multiple uses. There are literally hundreds of eligible healthcare expenses for your HSA funds, including prescriptions, over-the-counter medications, doctor office co-pays, health insurance deductibles and coinsurance. HSA funds may be used for any eligible healthcare expenses not covered by insurance or any other plan for yourself, your spouse or tax dependents. HSA funds can even be withdrawn for non-healthcare items, but will be subject to regular income taxes and a 10% excise tax penalty. Easy to access. Funds in the account are easily accessed with the ConnectYourCare healthcare payment card. Or, you can submit withdrawal requests online when using the card is not convenient. Take it with you. Because your HSA is owned by you, if you change jobs or health plans, your account stays with you. You can even use your account for retirement expenses when you reach 65. Try our online HSA Savings Calculators to see how much you can save: 3 3

4 Health Savings Account Rules and Regulations Enrollment Eligibility Almost any taxpayer with a qualified High Deductible Health Plan (HDHP) is eligible to enroll in. However, certain individuals are not eligible to enroll in : If you can be claimed as a tax dependent on another person s taxes, you are not eligible. Generally, this excludes children under age 19 (or 24 for students), or other household members with limited income who are supported by the taxpayer. If you are enrolled in Medicare, you are not eligible. You become entitled to Medicare because of age, disability or end-stage renal disease. If you are covered by your own or a spouse s Flexible Spending Account, Health Reimbursement Arrangement and/or any other non-hsa-qualified health plan, you are not eligible. If you have received any Veteran's Administration health benefits in the last three months, you are not eligible. If you own and later become ineligible to make contributions, you can still receive distributions from your HSA. Only your ability to put additional money into your HSA is eliminated when you lose eligibility. Qualified High Deductible Health Plans To take advantage of all the benefits offered with, you must be covered by a qualified High Deductible Health Plan (HDHP). An HDHP usually has a higher deductible and lower premiums. It protects you from the cost of expensive, catastrophic medical expenses. To be HSA qualified, an HDHP must meet the following criteria. Deductible. HSA-qualified HDHPs must have a deductible of at least $1,100 for individual and $2,200 for family.* The deductible is the amount you or your family must pay each year before the health plan benefits become payable. Maximum Out of Pocket. For 2008, HSA qualified HDHPs must have an out-of-pocket maximum that does not exceed $5,600 for individual and $11,200 for family.* The outof-pocket maximum is the highest amount you could pay in a year. It includes the deductible, copays and co-insurance, but not premiums. *These amounts reflect IRS regulations and are indexed annually for inflation. 4 4

5 Health Savings Account FAQs How much can I contribute to my HSA? For 2008, you can contribute up to $2,900 or $5,800 per year into for individual or family respectively.* Both individuals and employers can contribute to HSAs. Unspent HSA funds roll over into the next year. Americans age 55 or older (and not yet enrolled in Medicare) can make additional "catch-up" contributions of up to $900 per person in 2008, which can provide extra help to many early retirees. How will I be able to access my HSA funds? You will receive a healthcare payment card from ConnectYourCare to access your HSA funds. You can also pay for eligible expenses with any other form of payment and request a withdrawal from your account. When can I request withdrawals from my HSA? You have access to the account when your plan becomes effective. What happens if I use the account for a non-eligible expense? If you use the account for a non-eligible expense, the funds used for that expense will be taxed since their initial contribution to the account was tax-free. In addition, if you are under the age of 65, you will also be subject to a 10% tax penalty. How can I find out my account balance and review transactions? Account Balance and Claims Status information is available 24 hours a day, 7 days a week: Log on to the Consumer-Directed Healthcare (CDH) Portal at and visit My Account for online account balance information. Call for automated balance information. If you need Customer Service assistance, representatives are available from Monday through Friday, 8:00 8:00 EST at Or for support at [email protected]. *These amounts reflect IRS regulations and are indexed annually for inflation. If you make a contribution for the entire tax year when you only have part-year then you must remain in an HDHP and subsequently eligible for the HSA through the next full calendar year or must include the amount of this contribution (above and beyond what they could traditionally contribute) in gross income and are subject to an additional 10% tax. Read More FAQs Online 5 5

6 HSA Interest Rates and Investment Options ConnectYourCare has partnered with UMB Bank n.a. to bring you competitive interest rates and investment options for your HSA. An HSA allows you not only to save money, but gives you the potential to earn money too! You can view interest payments and manage your investment options from the online Consumer-Directed Healthcare (CDH) Portal. Interest Rates With from ConnectYourCare, you will earn interest on your balance. And, the more you save, the more you earn. See the chart below for interest rates. Levels Balances Rate Level I $0 $ % Level II $1,000 - $4, % below 91-day T-Bill rate* Level III $5,000 and over 91-day T-Bill rate* Investment Options You may also invest HSA funds in a self-directed brokerage account that gives you the opportunity to manage your own investments. With seven nationally recognized mutual fund families and more than 175 individual funds from which to select, every investor should be able to design an investment plan to meet their individual needs. To be eligible to open investment Account through UMB Financial Services, you must have a required minimum balance of $1,000 in your HSA plus enough to make the initial minimum investment amount for the fund(s) you wish to purchase, usually $1,000 to $2,000 per fund. Once you open Investment Account, you will be subject to UMB trading and brokerage fees. *The T-Bill, or Treasury Bill, is a negotiable debt obligation issued by the U.S. government and backed by its full faith and credit. Funds held in mutual funds through UMB Bank, n.a. or UMB Financial Services, Inc.: NOT FDIC INSURED/NO BANK GUARANTEE/MAY LOSE VALUE Brokerage services are provided by UMB Financial Services, Inc., a registered broker-dealer and member NASD, SIPC, and not by UMB Bank. UMB Financial Services, Inc. is a subsidiary of UMB Bank, n.a. UMB Financial Services, Inc. is not a bank and is separate from UMB Bank, n.a. and other banks. UMB Financial Services, Inc. is not a registered broker-dealer in Hawaii or Puerto Rico. UMB Reg. U.S. Pat. & Tm. Off. 6 6

7 CDH Portal: Online Account Information and Tools A major component of Consumer-Directed Healthcare (CDH) is providing consumers with the tools and education they need to make informed healthcare decisions. Our online CDH Portal puts the account information and health education tools you need to make wise healthcare decisions at your fingertips. Where to Begin: Go to Select the log in link from the upper right hand corner. Sign in with your user name and password. If it is your first time visiting the site, choose New User Registration to select your user name and password. online CDH portal Health Education Tools The online CDH Portal gives consumers access to valuable health education tools, including: Online Account Access ConnectYourCare makes it easy to access and manage your health savings accounts online. Use the CDH Portal to: Get Account Balance View Payment Card Charges View HSA Interest Payments Enter a Request for Withdrawal View Withdrawal Requests Manage HSA Investments Care Guides: Information on chronic conditions, such as asthma and high blood pressure Hospital Comparisons: Independent comparisons of area hospitals by procedure or diagnosis Prescription Center: Average costs for thousands of prescription drugs, cost effective prescription alternatives, and printable guides to take to a doctor Pregnancy Center: Important information for all stages of pregnancy Healthy Living Tips: Advice on living, eating and exercising Medical Encyclopedia: Detailed information on thousands of health topics, including symptoms, surgical procedures, medical tests, poisons, and injuries Diseases and Conditions: A - Z listing of over 1,500 ailments with treatment and prevention options Special Topics: A collection of health related topics from Aging to the Food Guide Pyramid and much more! 7 7

8 CDH Portal Account Online Access ConnectYourCare makes it easy to access and manage your Health Savings Account online at the Consumer-Directed Healthcare (CDH) Portal. Where to Begin: Go to Select the log in link from the upper right hand corner. Sign in with your user name and password. If it is your first time visiting the site, choose New User Registration to select your user name and password. Get Account Balance: Select My Account from the Home page. Balance displays for all healthcare accounts if you have more than one. Click on the Account Name to get details of the credits and debits to specific accounts. Open Investment Account: Once you meet the minimum balance ($1000) plus the initial minimum investment amount for the fund(s) you wish to purchase, follow these simple steps to open an account through UMB Financial Services: Select My Account from the Home page. Click on Investments. Click on My HSA Account. Select the Open Investments Account. Read the terms and follow the directions to open your account. Return to the Investments page regularly to manage funds. Monthly administrative fees and transaction charges will apply. Enter a New Claim: If you pay for an expense out of pocket (without using your healthcare payment card), you must enter a request in order to withdraw funds from your HSA. Entering a withdrawal request is easy. Select Claim Center from the Home page. Click on Add New Claim from the left-hand menu. Follow the four easy steps on the screen to enter information about your claim. Submit your request in the final online step. View Claim Status: At any time after your request is sent in, you can return to the Claim Center to see the status of your claim. Select Claim Center from the Home page. The status of all claims will be displayed. View Reimbursement Schedule: Requests are processed usually within two days of receipt and sent out reimbursements on your next scheduled reimbursement cycle as established by your employer. View your reimbursement schedule online: Select Claim Center from the Home page. Click View Reimbursement Schedule. Set Up Direct Deposit: You are eligible to receive funds by check or direct deposit. For quicker service, we suggest you sign up for direct deposit. Select My Account from the Home page. Click Direct Deposit and enter necessary bank information. Funds held in mutual funds through UMB Bank, n.a. or UMB Financial Services, Inc.: NOT FDIC INSURED/NO BANK GUARANTEE/MAY LOSE VALUE Brokerage services are provided by UMB Financial Services, Inc., a registered broker-dealer and member NASD, SIPC, and not by UMB Bank. UMB Financial Services, Inc. is a subsidiary of UMB Bank, n.a. UMB Financial Services, Inc. is not a bank and is separate from UMB Bank, n.a. and other banks. UMB Financial Services, Inc. is not a registered broker-dealer in Hawaii or Puerto Rico. UMB Reg. U.S. Pat. & Tm. Off 8 8

9 Using Your Healthcare Payment Card ConnectYourCare also provides a convenient healthcare payment card to access account funds. You will receive this card in the mail. Use Your Card Use your healthcare payment card to directly pay for services at approved merchants (see sidebar). The money comes right out of your Health Savings Account (HSA), so use it like a checking account. Although your payment card says debit, you must select credit at your provider location, and no personal identification number (PIN) is required to use it. Know Your Balance By frequently checking your account balance online, you will have a good idea of how much is available in your account. When you swipe your payment card, the system makes sure that your is active and that you have sufficient funds in your account for the full transaction amount. If not, the transaction will be declined. Know What s Eligible Familiarize yourself with what is an eligible expense through the online Consumer-Directed Healthcare (CDH) Portal. When you purchase eligible items along with personal items, be sure you have them rung up separately. Save Your Receipts Although your healthcare payment card eliminates the need to file paper claims, the IRS may require that your charges be verified. Save your receipts in case you need them at tax time. Lost or Stolen Cards Report a lost or stolen card immediately to ConnectYourCare by calling toll-free Use Your Card At Approved Merchants Your card has been programmed to work only at designated healthcare merchant locations based on their merchant category code (MCC). Your card should only be used for eligible expenses, and it is required that you save your receipts. You will not be able to use your healthcare payment card at locations that are not eligible merchants. For eligible purchases at other locations, you can pay for items with other means and then submit a request for withdrawal through your CDH Portal: This card is issued by UMB Bank, n.a. pursuant to a license from Visa U.S.A. Inc. 9 9

10 Healthcare Payment Card FAQs Is this a regular credit card? No, the healthcare payment card is a debit card to access funds from your Health Savings Account (HSA). It is provided to give you quick access to the funds in your account and should only be used at qualified locations for eligible expenses. When paying for eligible expenses at a qualified merchant, simply swipe the card as you would a regular credit card; no personal identification number (PIN) is required. If offered the option, always select credit from the card terminal. Your card will be automatically activated the first time you use it. Where can I use my healthcare payment card? Your healthcare payment card can be used nationwide at qualified service providers that accept Visa debit cards. The card is programmed to work only at merchant locations that are designated as healthcare merchants based on their Merchant Category Code (MCC). Examples of qualified merchants include pharmacies, doctor and dentist offices, vision centers, and hospitals. Remember to only use it for qualified healthcare expenses and save your receipts! What are the benefits of the card? The main benefit of the healthcare payment card is convenience. It allows you immediate access to your healthcare funds. Rather than paying out-of-pocket for qualified expenses, filing a withdrawal request and then waiting for reimbursement, using the card will allow you to access your funds directly and pay the provider. The card also eliminates the need for you to fill out a withdrawal request form online or manually by paper. Do I still need to keep my receipts? YES! The IRS may require documentation to show the money was used for qualified expenses. Therefore, always hold on to your receipts. The receipt should contain the following information: Date of service; Name and address of service provider or merchant; Description of the service or expense provided; and, Amount charged. What happens if I use the card for an ineligible expense? If you use your Health Savings Account (HSA) to pay for an ineligible expense, you may be required to pay income taxes and an additional penalty tax. How many cards will I receive? You will only receive one healthcare payment card. You may order an additional card for a spouse or dependent, or if your card is ever lost or stolen, for a charge of $5.00 per additional card. Simply contact ConnectYourCare at to request a card. Read More FAQs Online

11 HSA Contribution Levels for Married People Wife: No of any kind Husband: No of any kind Husband: Self-only non-hdhp Husband: Self-only HDHP Husband is eligible and HSA; his maximum contribution is $2,900. His wife is not eligible and may not contribute to Husband: Family non-hdhp Husband: *Family HDHP Husband is eligible and may contribute to ; his maximum contribution is $5,800. His wife is not eligible and may not contribute to Wife: Self-only non- HDHP Husband is eligible and HSA; his maximum contribution is $2,900. His wife is not eligible and may not contribute to Husband is eligible and may contribute to ; his maximum contribution is $5,800. His wife is not eligible and may not contribute to Wife: Self-only HDHP Wife is eligible and HSA; her maximum contribution is $2,900. Her husband is not eligible and may not contribute to Wife is eligible and HSA; her maximum contribution is $2,900. Her husband is not eligible and may not contribute to Both people are eligible and each may contribute to ; maximum contribution for each is $2,900 unless the wife is not covered by the husband s family. In that case, the wife is eligible to contribute up to $2,900 Both people are eligible and are treated as having only family and HSA; maximum combined contribution is $5,800, to be divided between them by agreement Wife: Family non- HDHP Wife*: Family HDHP Wife is eligible and HSA; her maximum contribution is $5,800. Her husband is not eligible and may not contribute to * Wife is eligible and HSA; her maximum contribution is $5,800. Her husband is not eligible and may not contribute to or she contribute to an HSA Both people are eligible and are treated as having only family and may contribute to ; maximum combined contribution is $5,800, to be divided between them by agreement unless the wife is covered by the family. In that case, the wife is eligible and may contribute up to $5,800 or she contribute to an HSA Both people are eligible and are treated as having only family and HSA; maximum combined contribution is $5,800, to be divided between them by agreement Maximums shown refer to 2008 statutory HSA contribution limits: $2,900 for self-only and $5,800 family. *Family is any other than self-only. It does not necessarily cover the other spouse. For example, it might cover only one parent and the children. Code 223, the statutory rules governing HSAs, contains a special rule for married individuals, which provides that if either spouse has family, then both spouses are treated as having only that family. Consequently, family non-hdhp on the part of either spouse that covers both spouses would make both individuals ineligible for

12 Eligible HSA Expenses Sample Eligible HSA Expenses The following are eligible for tax-free purchase with your HSA funds. Acupuncture Alcoholism treatment Ambulance Artificial limb Automobile modifications for physically handicapped person Birth control pills Blood pressure monitoring device Braille books & magazines (above the cost of regular printed material) Chiropractic care Christian Science practitioner COBRA premiums Contact lenses & related materials Crutches Dental treatment Dentures Diagnostic services Drug addiction treatment Eye examination Eye glasses & related materials Fertility treatment Flu shot Guide dog or other animal aide Hearing aids Hospital services Immunization Insulin Laboratory fees Laser eye surgery Long-term care premiums or expenses Medical testing device Nursing services Obstetrical expenses Organ transplant Orthodontia (not for cosmetic reasons) Over-the-counter medications (see separate list for details) Oxygen Physical exam Physical therapy Prescription drugs Psychiatric care Retiree medical insurance premiums Smoking cessation program Surgery Transportation for medical care Weight loss program to treat obesity Wheelchair Sample Expenses that are NOT Eligible for HSA Funds These items are never eligible for tax-free purchase with HSA funds. Cosmetic surgery Exercise equipment Fitness programs Funeral expenses Hair transplants Household help Illegal operations and treatments Maternity clothes Teeth whitening Vitamins 12 12

13 Eligible Over-the-Counter Expenses Your HSA can also be used for some over-the-counter (OTC) medications. Sample Eligible Over-the-Counter HSA Expenses These OTC items are eligible for purchase with your HSA funds. Acne medications Allergy prevention/treatments Anesthetic mouth gels and rinses Antacids and acid reducers Anti-itch creams Antiseptics Bandages and dressings Cold and flu medicines Cold sore remedies Contact lens solutions Decongestants Eye drops Eye patches Oral pain relievers Pain and fever relievers Prenatal vitamins Reading glasses Sinus medications Smoking cessation products Sunburn creams/sun block The Maybe List These products have more than one purpose and may be eligible if prescribed by a doctor for a specific condition or disease. Fiber supplements Herbal supplements Orthopedic shoe inserts Snoring cessation aids Weight loss and dietary supplements Sample Over-the-Counter Expenses that are NOT Eligible for HSA Funds These OTC items are never eligible for tax-free purchase with HSA funds. Cosmetics Denture supplies Deodorant Lens cleaners Moisturizers and wrinkle creams Sun tan lotions Toothpaste, toothbrushes and mouth wash Tooth whitening products Vitamins taken to improve overall health 13 13

14 Quick Steps for Using Your Account 1. Enroll in a ConnectYourCare Health Savings Account. During your company s open enrollment, enroll in a Health Savings Account from ConnectYourCare. Make sure you total all your medical, dental or vision expenses that you would otherwise pay out of pocket to determine how much you should contribute to your HSA. 2. Use the online Consumer-Directed Healthcare (CDH) Portal to access health and account information. Visit and click on the log in link in the upper right hand corner of the screen. Once logged in, you can access health education tools and account information, including account balance, payment card charges, interest payments, investment management and withdrawal request information. 3. Use your healthcare payment card to pay for qualified expenses. Once you receive your healthcare payment card in the mail, you can begin using it to pay for any eligible medical expense, including prescriptions, over-the-counter medications, doctor office co-pays, health insurance deductibles and coinsurance. Remember to always save your receipts! 4. Submit withdrawal requests. If you pay for an expense out of pocket (without using your healthcare payment card), you must enter a request in order to withdraw funds from your HSA. Entering a withdrawal request is quick and easy online in the CDH Portal. 5. Manage your HSA investments. Once you accumulate the required minimum amount, an option to invest your funds appears in your account on the CDH Portal. 6. Return to the CDH Portal to manage your account. Use the CDH Portal any time of the day or night to access account information and health education tools. It s that easy! 14 14

15 About ConnectYourCare Top Reasons to enroll in a ConnectYourCare Health Savings Account HSAs offer triple tax savings: contributions go in pre-tax, earnings growth is untaxed, and qualified withdrawals are tax free. You can earn interest and make investments with your HSA funds. You can use your HSA to pay for hundreds of qualified expenses. The online CDH Portal puts account and health information at your fingertips. ConnectYourCare s healthcare payment card makes it easy to access your account funds. ConnectYourCare simplifies and speeds up the withdrawal process eliminating the need to mail in paper forms and decreasing the time for payment. With my ConnectYourCare account, I can pay for everything from prescriptions to over-the-counter medicines to doctor copays with the swipe of one card. There s no guessing about my account balance, because it s instantly updated online. - ConnectYourCare Member ConnectYourCare is focused on helping you become a better healthcare consumer. ConnectYourCare is a CDH solution provider that was founded to advance consumers choice, convenience and control over healthcare. ConnectYourCare delivers technology solutions with a consumer focus. ConnectYourCare is designed to help you manage your healthcare dollars while giving you access to valuable health education tools. With a ConnectYourCare account, you get a healthcare account, healthcare payment card, online account management, and health and wellness education. For more information on ConnectYourCare, please visit Questions? Visit our online FAQs ConnectYourCare Customer Service Representatives are available 8 am to 8 pm EST Monday through Friday at or at [email protected] 15 15