Old National Health Savings Account Overview What is a Health Savings Account? A Health Savings Account (HSA) is an account that can be funded with your tax-exempt dollars, by an employer, or both, to help pay for eligible out-of-pocket medical expenses. As needed, you may withdraw the funds, tax-free, to pay for medical care for yourself, your spouse or your eligible dependents. HSAs are controlled by the individual owner of the account, not the employer or insurer. To qualify for an HSA, you must be covered by a High Deductible Health Plan (HDHP), not be covered under another medical plan that is not an HDHP, not be enrolled in Medicare, and not eligible to be claimed as a dependent on another person s tax return. What is a High Deductible Health Plan? The IRS defines a High Deductible Health Plan (HDHP) to be a plan with a minimum annual deductible and a maximum out-ofpocket limit. The current minimum and maximums are listed below and are subject to change upon annual review by the IRS. Type of Coverage Minimum Annual Deductible Maximum Annual Out of Pocket Individual $1,250 $6,250 Family $2,500 $12,500 Contribution Levels In 2013, you may contribute as much as $3,250 each year for single-coverage plans or $6,450 for family plans. These limits include the contribution to your HSA by Old National ($500 for individual, $1,000 for family for associates effective January 1). Individuals age 55 and over may make additional catch-up contributions of up to $1,000. Payment of Eligible Expenses After enrolling in the Old National HSA for the first time, you will receive a VISA debit card from ONB that you can use to pay your qualified expenses directly from your account. Your expenditures, however, cannot exceed the amount of your HSA balance. The unused balance in your HSA (including earnings) may increase without limit. You may continue to add to the HSA with contributions in subsequent years if you are enrolled in an eligible HDHP. However, if you are enrolled in Medicare, you may not contribute or receive company contributions to your HSA. Product Summary Old National's Health Savings Account is a tiered, interest-bearing checking account with interest tiers of: $0 to $2,499.99 $2,500.00 to $9,999.99 $10,000.00 to $19,999.99 $20,000.00 and over Your HSA includes free Online Banking, Bill Pay and free unlimited debit card usage. While there are normally fees associated with the maintenance of an HSA, Old National is waiving this fee for associates for 2013. For ONB Associates Only Member FDIC 1
More Information Full account information, including all account disclosures, is available online. If you would like more information about HSAs, the U.S. Department of Treasury site has information on regulations regarding the use and administration of HSAs at http://www.treasury.gov/resource-center/faqs/taxes/pages/health-savings-accounts.aspx. Frequently Asked Questions and Answers Account Information 1. How do I open my Old National HSA account? When you enroll in an HDHP, you will automatically be directed to a link where you will print the application, instructions and all disclosures. Print the packet, complete the application and send the form to: Deposit Operations CD Department; ONSD, 2nd Floor, Evansville; Mail Stop ONS-002. 2. Do I have to set up my HSA through Old National or can I use an HSA elsewhere? If your HSA is elsewhere, you will not receive the ONB contribution and you will not be able to make pre-tax contributions through ONB payroll. 3. Is an HSA portable? Yes. If you should leave Old National, your account balance is yours and is portable. 4. What happens to my HSA money if I die? Is there a beneficiary? Part of the account opening process on an HSA includes designating a beneficiary. You may designate multiple beneficiaries and also designate contingent beneficiaries in the event that the primary one(s) do not survive beyond your life time. Additionally, you may change these beneficiaries at any time by simply completing a change of beneficiary form. The form is included in the HSA application packet and should be sent to Deposit Operations - CD Department; ONSD, 2nd Floor, Evansville; Mail Stop ONS-002. Contribution Information 5. How much can I contribute to my HSA in 2013? For a single individual, the total of your contribution and Old National s may not exceed $3,250. For family coverage, your total contributions are capped at $6,450 including ONB s contribution. During the first week of January, Old National will deposit $500 to your HSA if you choose a single-member HDHP. In that case, you may contribute up to $2,750 on a pre-tax basis through payroll deductions. ONB will deposit $1,000 to your HSA if you have family coverage; you can contribute up to $5,450. Associates between the ages of 55 and 65 are eligible to make additional catch-up contributions. Catch-up contributions are allowed so that older individuals have the opportunity to build the balance in their account before turning 65 years old and, because of their eligibility for Medicare, became ineligible to make contributions. For 2013, individuals in this category may contribute an additional $1,000 to their HSA. If you enroll in an HDHP after January 1, you can contribute to an HSA the greater of: The annual maximum if you keep your HDHP through December 31 of the following year; 1 /12 of your annual maximum times the number of months you held an HDHP during the current tax year; If you contribute more than the maximum allowable amount during the current tax year, you must include the excess contribution in gross income in the following year and pay an additional 6% tax. For more details, please refer to Internal Revenue Service Publication 969. For ONB Associates Only 2
6. When will ONB deposit its contribution to the HSA? Associates enrolling during the benefits open enrollment period may expect the company contribution to be made during the first week of January 2013. For associates enrolling during the plan year, contributions will be made as soon as administratively feasible after the effective date of the plan. 7. Can I change my payroll deduction contribution to my HSA during the year providing I do not go over my maximum? Yes. You may increase, decrease or stop your pre-tax contribution during the year. It is your responsibility to adhere to the IRS limits. 8. I will turn age 55 in 2013. Can I make the full catch-up contribution? Yes, if you have HDHP coverage for the full year, you can make the full catch-up contribution regardless of when your 55th birthday falls during the year. If you begin HDHP coverage after January 1st, the same rules apply to the catch-up as the annual maximum. 9. If both spouses are 55 and older, can both make catch-up contributions? Yes, if both are eligible individuals and each of them has established an HSA in their name. 10. What is the maximum contribution from an IRA? The maximum contribution from all sources (Personal, ONB, IRA rollover) is the stated maximum of $3,250 for a single and $6,450 for a family (adding $1,000 for the 55-65 age group). For Example, a person under age 55 with family coverage could contribute as follows: ONB Contribution: $1,000 Personal Contribution: $3,650 IRA Contribution: $1,800 Total Contribution: $6,450 Note: An IRA rollover may only take place once during your lifetime. Eligibility for an HSA 11. Am I allowed to have other health insurance in addition to my HDHP and still have an HSA? Generally, you cannot have any other health plan that is not an HDHP. However, this rule does not apply if the other health plan only covers the following items: Accidents Disability Dental Care Vision Care Long-term Care Benefits related to workers compensation laws, tort liabilities, or ownership or use of property A specific disease or illness (such as cancer insurance) A fixed amount per day (or other period) of hospitalization 12. My child will be covered in my HDHP. Can I start an HSA for my child? No, you cannot establish separate accounts for your dependent children who are listed on your tax return or children who can legally be claimed as a dependent on your tax return whether you claim them or not. 13. I am 65 years old. Can I contribute to an HSA? No, you cannot contribute to an HSA if you are covered by any other plan such as Medicare A, Medicare B, or Medicaid. If you are automatically covered by one of these and do not formally decline participation, you cannot fund an HSA. If you decline this coverage, you may participate in an HSA. Otherwise, you cannot make contributions to an HSA beginning the month after you turn 65 years of age. For ONB Associates Only 3
14. What happens to my HSA after I turn 65 or I withdraw from my HDHP and obtain coverage under another plan? Money that was funded to your HSA while you were in an HDHP and not covered by other plans belongs to you. It can remain in your HSA and be used to fund qualified medical expenses indefinitely. 15. Can I have a Health Care FSA (Flexible Spending Account) and an HSA? If you have an HSA, Old National will allow you to have a Health Care FSA to cover only eligible Vision and Dental Expenses. You cannot use FSA funds to cover medical expenses if you have an HSA. There is no impact on your eligibility for a Dependent Care FSA. 16. If both spouses have family HDHP coverage but one spouse has other coverage, are both spouses eligible for an HSA? How much can each spouse contribute? The following examples describe how much can be contributed under varying circumstances. Assume that neither spouse qualifies for catch-up contributions. Example 1: Husband and wife have family HDHP coverage with a $4,000 deductible. Husband has no other coverage; wife also has self-only coverage with a $400 deductible. Wife is not eligible for an HSA. Husband may contribute $6,450. Example 2: Husband and wife have family HDHP coverage with a $3,500 deductible. Husband has no other coverage; wife also has self-only HDHP coverage with a $1,500 deductible. Both husband and wife are eligible for an HSA. Husband and wife are treated as having only family coverage. The combined HSA contribution by husband and wife cannot exceed $6,450 to be divided between them by agreement. Example 3: Husband and wife have family HDHP coverage with a $4,500 deductible. Husband has no other coverage; wife also has family HDHP coverage with a $2,500 deductible. Both husband and wife are eligible individuals. Husband and wife are treated as having family HDHP coverage with the lowest annual deductible ($2,500). The maximum combined HSA contribution by husband and wife is $6,450 to be divided between them by agreement. Example 4: Husband and wife have family HDHP coverage with a $4,500 deductible. Husband has no other coverage; wife also has family coverage with a $300 deductible. Husband and wife are treated as having family coverage with the lowest annual deductible ($300). Neither husband nor wife is an eligible individual and neither may contribute to an HSA. Eligible Expenditures 17. Can I use my HSA to pay for dental and vision expenses? Yes. You can pay for eligible dental, vision and other eligible health care expenses from your HSA, but only medical expenses that are covered under the HDHP will go toward meeting your medical plan deductible. 18. Can I pay for over-the-counter drugs with HSA funds? For the purposes of distributions from HSAs, qualified medical expenses will refer only to medication or a drug prescribed by a physician starting on January 1, 2011, with the exception of insulin. Insulin will not require a prescription to be considered a qualified medical expense. If a medication or drug is available over-the-counter (without a prescription), but it is prescribed by a physician, it will be considered a qualified medical expense. 19. Can ONB pay my medical premium from my HSA? No. Per the IRS regulations, as long as you are actively employed by Old National, your HSA cannot be used to pay for health insurance premiums. HSAs can fund: COBRA premiums; Health insurance premiums while receiving unemployment benefits; Qualified long-term care premiums; Any health insurance premiums paid, other than for a Medicare supplemental policy, by individuals age 65 or older For ONB Associates Only 4
20. Under the HDHP, does the deductible include prescription drug cost? Under the HDHP medical option, prescription drugs are subject to the plan deductible. For example, if you select the HDHP family medical option, you would have to incur $4,000 out-of-pocket covered medical and drug expenses before the plan begins to cover your prescription drugs. Tax information 21. What reports will I receive from the bank for tax filing purposes? In January, you will receive: 1099-SA form showing any distributions from your HSA and the reason code to describe those distributions. In May, you will receive: 5498-SA form showing your deposits for the tax year, any rollover deposits made in that tax year and the fair market value of your account on December 31. 22. What are the tax consequences if I withdraw the money from my HSA, for uses other than qualified medical expenses, before or after I am 65 years old? Before age 65, you must pay the required Income Tax plus a 20% penalty. After age 65, you will only pay Income Tax. 23. Will the interest earned on my HSA be taxed? It will not be taxed if used for covered medical expenses. 24. Can ONB withhold federal or state income tax from my HSA? No, Old National Bank s policy is not to withhold taxes on a Health Savings Account or on the contribution that the company makes. If you have additional questions, please contact the HSA Support Line at (812) 468-1000, Option 4. For ONB Associates Only Compliance# 5