Health Savings Account. Guide for Members

Transcription

1 Health Savings Account Guide for Members

2 Take Control of Your Health Care A Health Savings Account (HSA) is a new way to secure more affordable health coverage for you and your family while you save on taxes. Flexible and easy to use, an HSA plan empowers you to take charge of your health, your money and your future. Simple Idea. Smart Solution. An HSA makes it easier to afford your deductible on your High Deductible Health Plan (HDHP) because you can cover your deductible (and other applicable expenses) with funds from your HSA. The balance in your HSA rolls over year-to-year. Those dollars continue to be invested and continue to be available for medical expenses, even in retirement. Participating in an HSA To participate in an HSA, you must be enrolled in an HDHP. BlueShield offers HDHPs which are comprehensive health plans where the annual out-of-pocket maximum for in-network expenses cannot exceed the set amount determined by the Internal Revenue Service (IRS). The IRS reviews and updates this information each year. The requirements for 2010 are: A minimum annual deductible of $1,200 for individual coverage and $2,400 for family coverage. An annual out-of-pocket maximum for in-network expenses of $5,950 for individual coverage and $11,900 for family coverage. Preventive care (e.g. routine physicals, immunizations and well-child care) isn t subject to the deductible. You simply pay a copay for these services or they re covered in full when you see a participating doctor. Your copay will depend on the plan chosen by your employer. To participate in an HSA plan, you cannot be covered by another insurance plan that provides coverage for benefits covered by the HDHP. Please keep in mind when choosing an HDHP that these plans are not considered credible coverage under Medicare Part D. There are two other requirements that you must meet in order to participate in an HSA. You cannot: Be enrolled in Medicare. Be a dependent on another person s tax return. Contributing to Your HSA When you re enrolled in an HSA, you set aside money to pay for eligible out-of-pocket healthcare expenses. You and/or your employer can contribute money to your HSA up to the maximum amount determined by the IRS. Contribution maximums are based on a calendar year regardless of how many months you ve been enrolled in the HDHP. The 2010 maximum contribution amounts are $3,050 for individual coverage or $6,150 for family coverage. If you re 55 or older, you can make an additional contribution amount of $1,000. Contributions to your HSA account are tax deductible (tax deferred if made by your employer) and withdrawals aren t taxed as long as they re used to pay for qualified medical expenses. Contributions that your employer makes to your HSA account are yours. There are no vesting requirements or forfeiture provisions and, unlike a Flexible Spending Account, HSAs don t have a use-it-or-lose-it requirement. Your account balance rolls over from year-to-year and may earn interest tax-free. Investing Your Money Federal law requires that contributions be deposited with a qualified trustee or custodian. BlueShield will work with the chosen administrator to hold your HSA contributions exclusively for your benefit; ready for you to use whenever you have qualified medical expenses to pay. In the meantime, you have the opportunity to make your HSA account grow by investing it in any of the investment funds the chosen administrator may have available to you.

3 Using Your HSA Money in your HSA plan can be used to pay for a variety of healthcare-related expenses ranging from routine physicals to prescription drugs. The full list of qualified medical expenses can be found in IRS Publication 502. Examples of those expenses are listed in this brochure for your convenience. Keep Your Receipts Your HSA money is tax-free as long as it s used to pay for qualified medical expenses. If you use the money for any other reason, you ll be required to pay income tax and a 10% tax penalty on that amount (you won t pay a penalty if you re disabled or age 65 or older). It s up to you to keep the supporting records to show the Internal Revenue Service (IRS) how you used your HSA funds. How It Works When you incur an expense: A participating provider will submit a claim to BlueShield for processing. If the deductible hasn t been met, an Explanation of Benefits will be sent to both you and the provider indicating the balance you ll owe. You can pay with your debit card (if you have one set up for your HSA) and the amount is automatically deducted from your account, up to the amount available in your HSA. If the HSA isn t sufficiently funded to pay the claim, you re responsible for the remaining balance of the bill. You may also pay the provider by cash, check or credit card, and submit a paper claim to the chosen administrator for your HSA for reimbursement. After the deductible is met, a copay or coinsurance may apply. FREE Online Tools for Members at Our health plans allow you to take charge of your health. We provide you with useful tools and information on our web site to help you get the most value from our BlueShield plan. Link to Account Administrator Web site You can click on links to the web site for your HSA administrator to view information regarding your account. eservices Health plan customer service 24/7 including PCP changes, ordering an ID card, claims status and more. Health & Wellness Information and resources on the health topics that matter most to you, including wellness programs, interactive tools and health topics from A to Z.

4 Qualified Expenses Here s a partial list of benefits and services that can be paid with funds from your HSA. Abdominal supports Acupuncture Alcoholism treatment Ambulance Anesthetist Annual physical examination Arch supports Artificial limbs Autoette (when used for relief of sickness/disability) Blood tests Blood transfusions Braces Breast reconstruction surgery Cardiographs Chiropractor Contact lenses Crutches Dental treatment Dental x-rays Dentures Dermatologist Diagnostic devices Drug addiction therapy Drugs (prescription) Eyeglasses Fees paid to health institute prescribed by a doctor Fertility enhancement FICA and FUTA tax paid for medical care service Fluoridation unit Guide dog Gum treatment Gynecologist Healing services Hearing aids and batteries Home care Hospital bills Hydrotherapy Insulin treatments Insurance premiums Lab tests Laser eye surgery Lead paint removal Long-term care Metabolism tests Neurologist Nursing (including board and meals) Obstetrician Operating room costs Ophthalmologist Optician Optometrist Oral surgery Organ transplant (including donor s expenses) Orthopedic shoes Orthopedist Osteopath Over-the-counter drugs (except for vitamins and supplements) Oxygen and oxygen equipment Pediatrician Physician Physiotherapist Podiatrist Postnatal treatments Practical nurse for medical services Prenatal care Prescription medicines Psychiatrist Psychoanalyst Psychologist Psychotherapy Radium therapy Registered nurse Special school costs for the handicapped Spinal fluid test Splints Sterilization Stop-smoking aids Surgeon Telephone or TV equipment to assist the hard-of-hearing Therapy equipment Transportation expenses (relative to health care) Vaccines Weight-loss program Wheelchair X-rays

5 Disallowed Expenses Advance payment for services to be received next year Athletic club membership Automobile insurance premium allocable to medical coverage Boarding school fees Bottled water Commuting expenses of a disabled person Cosmetic surgery and procedures Cosmetics, hygiene products and similar items Diaper service Domestic help Funeral, cremation or burial expenses Health programs offered by resort hotels, health clubs and gyms Household help Illegal operations and treatments Illegally procured drugs Maternity clothes Premiums for life insurance, income protection, disability, loss of limbs, sight or similar benefits Scientology counseling Social activities Special food or beverages Specially designed car for the handicapped other than an autoette or special equipment Supplements (unless used to treat a specific medical condition) Swimming pool Travel for general health improvement Tuition and travel expense for a child with special needs at a particular school Vitamins (unless used to treat a specific medical condition) Weight-loss programs This is not a comprehensive list. If you use your HSA for non-qualified expenses (or any others not listed in IRS Publication 502) you must pay taxes on the funds and a 10% penalty. Taking the Next Step To enroll in your high deductible health plan and open your HSA account, simply complete a BlueShield membership enrollment form and the HSA enrollment form from the chosen administrator. Once your application is processed, you ll receive your plan documents and medical identification cards. Other materials may be provided by the administrator.

6 Frequently Asked Questions Q: What types of insurance and other coverage can I have and still be eligible to take advantage of an HSA? A: Permitted insurance includes workers compensation, property insurance, insurance for a specific disease, such as cancer coverage and insurance that pays a fixed amount per day of hospitalization. Coverage for dental, vision, long-term care, accidents and disability are also permitted. Q: Can I use the money in my HSA account to pay medical insurance premiums? A: Generally, you cannot use your HSA account to pay premiums for health insurance coverage. Exceptions include COBRA premiums, long-term care premiums, Medicare Advantage premiums or premium payments that allow you to retain health coverage while you are receiving unemployment compensation. Q: What is a qualified medical expense? A: Qualified medical expenses are services typically covered by a healthcare plan, such as office visits, emergency room services and hospitalization. Qualified medical expenses also include prescription drugs and many over-the-counter drugs, vision expenses including eyeglasses and contact lenses, medical plan deductibles and co-pays, as well as non-cosmetic dental expenses. The covered items are defined by IRS code 213(d) and are listed in IRS Publication 502. A list of examples is available in this brochure. Q: What if I use my HSA to pay for something other than a qualified medical expense? A: You will need to include that amount in your gross income when you file your taxes. It will be treated as regular income, and if you are less than age 65, it will be subject to a 10% excise tax.

7 Q: Can I change investment funds, or will I need to keep my money in the same fund until it is withdrawn? A: This may vary based on who has been chosen as the qualified trustee for your HSA. Contact your HSA administrator for more information. Q: Can I be enrolled in an FSA and still be eligible for an HSA? A: It depends on whether you are enrolled in a general or a limited FSA. If you are enrolled in a general FSA that provides reimbursement for all medical expenses, you would be ineligible to make contributions to an HSA. If you are enrolled in a limited FSA that only provides coverage for vision and/or dental, you would still be able to make contributions to an HSA. FSA Grace Period If you enroll in an HDHP while still covered under the grace period of an FSA, you will still qualify for an HSA if the balance in your FSA is zero, or if the year-end balance in the FSA is transferred directly to the HSA. Q: Can I roll over funds from my IRA to my HSA? A: Yes. A one-time rollover from an IRA to an HSA can be made without being subject to a tax or penalty. The transfer amount is limited to the maximum HSA contribution for that year. For detailed assistance it is suggested that you contact your tax advisor and your HSA administrator. Q: Do I have to open an HSA? A: No. You are not required to open an HSA. Q: What happens to the money in my HSA if I leave my current employer? A: The money in the HSA is yours and will go with you. If you join another employer that also offers an HDHP, you can continue to contribute to your HSA. You can leave the HSA with your current administrator, or you can choose to roll it over to a new administrator. If your new employer does not offer an HDHP, you can no longer make contributions to the HSA. However, you can still withdraw funds from the HSA or leave the funds in your HSA to earn interest.

8 Although BlueShield is working with the chosen administrator to make HSAs available, BlueShield is not responsible for the qualification of the account as an HSA under the Internal Revenue Code. BlueShield makes no representation regarding the investment options made available under the HSA, nor is BlueShield responsible for the investment performance of funds contributed to the HSA. In facilitating the relationship with the administrator, BlueShield is not acting in a fiduciary capacity under ERISA or otherwise. A Division of HealthNow New York Inc. An Independent Licensee of the BlueCross BlueShield Association. NENY 1352_Rev 04_10 BS 457