hsa rules and regulations presenter healthequity train-the-trainer copyright © 2013 healthequity,...

HSA Rules and Regulations HSA Rules and Regulations

Presenter

HealthEquityTrain-the-Trainer

Copyright © 2013 HealthEquity, Inc. All rights reserved. HealthEquity and the HealthEquity logo are registered trademarks and service marks of HealthEquity, Inc.Confidential and proprietary. Reproduction without express written consent is prohibited.

Copyright © 2011 HealthEquity, Inc. All rights reserved. HealthEquity and the HealthEquity logo are registered trademarks and service marks of HealthEquity, Inc.Confidential and proprietary. Reproduction without express written consent is prohibited. 2


Two Parts: Health Plan + Savings Account

• HSA-qualified plan through insurance• Preventative services covered at 100%• Office Visit, Rx, Deductible, Copays, and

Coinsurance ALL count towards Out of Pocket maximum

• HSA through HealthEquity • Tax-free savings for medical

expenses• Works in conjunction with the

HSA powered plan

3


HSA Qualified Health Plan

Maximum Deductible / OOPSingle: $6,550Family: $13,100

2016:

Minimum DeductibleSingle: $1,300

Family: $2,600

Note: Limits on deductibles and out-of-pocket expenses apply only to “in-network” providers

HSA-qualified Health Plan

4


HSA qualified plans

5

Lower premiums Preventive carecovered 100%

No copays


Why choose an HSA?

Easy win in today’s complex health care system:– Save now:

• Lower monthly insurance premiums• HSA deposits aren’t taxed• Typically lowers income tax liability

– Save for the future:• The average retired couple will need $220,000 to

cover medical expenses not covered by Medicare in retirement*

• HSA funds roll over from year to year• Tax-free interest earned• You keep the money even if you change

jobs or insurance plans• Comprehensive and easy investment options

– Same doctors, same network, same pricing

6* Source: Fidelity http://www.fidelity.com/inside-fidelity/employer-services/fidelity-analysis-reveals-extra-health-care


NOT use it or lose it

7


Funds roll over every year

Accounts grow over time as unused funds roll over from year to year and earn tax-free interest and/or investment income.

8


Employee owns account permanently

Even if employees leave the company, change health plans or retire, HSA funds remain theirs

9


Triple tax benefit

1. Contributions are tax deductible

2. Earnings/Growth are tax free

3. Withdrawals for qualified medical expenses are tax free

10


Eligible individuals

Being eligible means that a person is able to make contributions to a health savings account.

12


1: Cannot be claimed as a dependent

13


2: Must have an HSA-qualified health plan

14


3: Must not have other coverage

• Medicare • Medicaid• Full purpose FSA (including through a spouse)• Other Insurance Coverage

15


Permitted insurance coverage

Certain types of coverage will not jeopardize eligibility:

•Accident

•Dental

•Vision

•Specified Disease Coverage

•Hospital indemnity if it pays a fixed cost per day, per admission, or other period

•Long Term Care

•Disability

•Wellness programs offered by an employer, if they do not pay for significant medical benefits

•Worksite employee assistance programs, if they do not pay for significant medical benefits

16


Eligible for Entire Calendar Year

If an individual is eligible for the entire calendar year, January – December, then he or she may contribute the full contribution maximum depending on his or her age and coverage type.

17


Maximize your savings

18

Maximize your HSA contributions in 2016:

• Single-coverage: $3,350 (2015: $3,350) Save up to $1005 in Taxes!*

• Family-coverage: $6,750 (2015: $6,650) Save up to $2025 in Taxes!*

• Catch-up contribution, age 55+: $1,000

*Based on 30% tax rate. Actual results may vary.


How to contribute to your HSA

19

• Make pre-tax contributions through payroll deductions

• Change your payroll contributions at any time

• Make post-tax contributions directly to HealthEquity online or by sending a check

• Fully fund your HSA on day one

• Make contributions anytime after your HSA is open

• Can make contributions up until April 15th for the previous tax year


Contribution Planning

HSA contributions require a bit of planning•Participants should do their best to plan their payroll contributions according to their medical spending needs and history.

•Best case scenario is to contribute the annual maximum each year.– Single coverage – 2016: $3,350

– Family coverage – 2016: $6,750

•We recommend that participants should contribute at least an amount equal to your medical deductible.

– Keep in mind that the medical deductible is not dependent on the HSA balance – if participants are not making appropriate contributions to their HSA, their balance could be exhausted before they have met their deductible!

– Participants should also plan to contribute dollars for dental and vision expenses, if needed. These benefits do not apply to the medical deductible.

•Any contribution amount is better than none, but with a little planning, participants can cover their health care spending needs for the year.

20


Anyone Can Contribute

• Individual Account Holders• Employers• Family Members• For example, parents may want to help their children

that have recently graduated from college and are now on their own to fund their HSA accounts, assuming they are no longer being claimed as dependents on a parent’s tax return.

• In this case, the son or daughter receives the tax deduction on their income taxes.

21


IRA Rollover Rules

• IRA penalties and income tax penalty for early withdrawal waived• Maximum rollover equals the annual contribution limit for an HSA including

catch-up contributions.• Applies toward the calendar-year maximum contribution amount• Amount that can be contributed depends on coverage type during month of

contribution and age at end of tax year• A second contribution is allowed if the individual changes from single to family

coverage later in the year• Amount contributed to the HSA from the IRA is not deductible• Individual must own the IRA – can’t deposit to someone else’s HSA• Can be rolled over from traditional IRAs, Roth IRAs, and SEP and SIMPLE

IRAs that are not ongoing• Funds can’t be rolled over from ongoing SEP or SIMPLE IRAs, 401(k), or

403(b) accounts, or other retirement programs• Rollover must be a direct transfer and be completed by December 31.

22


Qualified medical expenses

24


OTC drugs no Longer eligible

As of January 1, 2011, over-the counter medications and medical supplies are no longer a qualified HSA expense unless you have a prescription.

25


Adult children – age 26 rule

• Children who will not have reached age 26 by the end of the calendar year can be covered on their parents’ health plan even if:

• Not a full-time student• Not living at home• Not a tax dependent• Married

• If the child is not a tax dependent, the parents cannot use their HSA money to pay for the adult child’s expenses.

• However, the adult child is an eligible individual with family HDHP coverage, so he can set up his own HSA and contribute the family amount.

• His parents can still contribute the family amount to their HSA.

26


Domestic partners

• Domestic partners may be covered by one HSA-qualified family policy, but they would not be eligible for reimbursement out of each other’s accounts unless they meet the IRS definition of a “qualifying relative”.

• In most cases, it is preferable for domestic partners to have separate HSA accounts to avoid a problem with reimbursement

• The good news: if the domestic partner does not meet the definition of a “qualifying relative”, each spouse can set up his or her own account and contribute the full family amount since they have family HDHP coverage.

27


Taxes + 20% penalty

HSA funds spent on ineligible expenses must be reported as income and are subject to a 20% penalty (unless the account holder is 65 or older).

28


Account Holders Keep Track of Expenses

• Not the employer’s responsibility

• Not the HSA administrator’s responsibility

• Keep organized

– Documentation library

– Integrated claims

29


Substantiation not required

• Substantiation of claims is required with an FSA or HRA – the employer is responsible for ensuring all dollars reimbursed are for eligible expenses.

• With an HSA, the account holder is responsible for keeping track of expenses.

• No receipts to IRS unless audited

30


Form W-2: wage & tax statement

Combined in box 12, code W: •Employer contributions +•Employee contributions through cafeteria (125) plan

31


Form 1099-SA: HSA distributions

• Sent by HSA administrator in late January / early February• Shows total distributions from Health Savings Account• Must be filed with your taxes

32


Form 5498-SA: HSA contributions

• Sent by HSA administrator in May• Shows total contributions to HSA between January 1 and tax filing deadline (usually April 15th)

33


No need to itemize

• HSA contributions reduce a person’s taxable income – itemizing deductions is not required

• Contributions are also deductible from state income taxes (if a state has an income tax) in all states except Alabama, California, and New Jersey

34


Form 8889: Health Savings Accounts

HSA account holders are responsible for filing form 8889 each year. The purpose of this form is to determine how much of their HSA contributions are eligible to be deducted from their gross income on their income taxes and to determine if any taxes or penalties are owed to the IRS.

35


How to use your HSA

36


Convenient Access

37

• Convenient access– Debit card– Online– Using our free mobile app– By telephone

• Use your HealthEquity account to– Check your balance– Review transactions– Review claims – Submit new claims or documents– Send payments and reimbursements– Access tax documents


Options for Paying your Medical Expenses

HSAs give participants the choice to pay using any method they like!

•Use the HealthEquity HSA Debit Card – funds will come directly out of your HSA balance

•Use the HealthEquity member portal to pay the provider directly from HSA – visit the claims listing

•Pay out of pocket – you can choose to keep saving your HSA dollars or reimburse yourself from your HSA at a later date

•Link a personal bank account to the HealthEquity Member Portal and pay the provider directly from your bank account – you always have the option to reimburse yourself from your HSA at a later date

38


HSA How To: Doctors’ Visits

*This card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. The Bancorp Bank; Member FDIC.

No co-pays

Insurance carrier adjusts price based on discounts

Pay doctor from HSA funds, if funds are available. Pay out of pocket if funds aren’t available and reimburse yourself later.

Go to the doctor

Doctor sends insurance carrier the bill

Optional: Enter claim in member portal

3

2

1

39


HSA How To: Pharmacy Prescriptions

Show your Health Plan ID card

Pay with yourHSA card

Insurance carrier applies amount to your deductible—no paperwork needed

*This card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. The Bancorp Bank; Member FDIC.

Go to pharmacy

Pharmacy applies discount

Pharmacy sends claim to insurance carrier

3

2

1

40


HealthEquity mobile app

• On-the-go access for all account types• Take a photo of documentation with

phone and link to claims and payments• Send payments and reimbursements

from HSA• Manage debit card transactions• View claims status

Available FREE for iOS and Android

• On-the-go access for all account types• Take a photo of documentation with

phone and link to claims and payments• Send payments and reimbursements

from HSA• Manage debit card transactions• View claims status

Available FREE for iOS and Android

Convenient, powerful tools:


Trusted Advisors

42

Always availableOur member services are taking calls 24 hours a day, every day of the year

Call todayLet us conduct a personal assessment of your plan options

866.346.5800 www.healthequity.com

hsa rules and regulations presenter healthequity train-the-trainer copyright © 2013 healthequity,...

Documents

healthequity logo

service marks of healthequity

healthequity taxfree

registered trademarks

express written consent

hsa powered plan

qualified plans

hsa funds