Health Savings Account (HSA) for Retirees Updated 03/21/2019 - - PowerPoint PPT Presentation
IU Human Resources Health Savings Account (HSA) for Retirees Updated 03/21/2019 INDIANA UNIVERSITY Reality Check You may live much longer than you think. who are in their 90 & mid-50s today will live to be *Source: Society of
INDIANA UNIVERSITY
IU Human Resources
Updated 03/21/2019
You may live much longer than you think.
*Source: Society of Actuaries https://www.soa.org/research/age-wise/
who are in their mid-50s today will live to be
A healthy couple retiring at age 65 can expect to pay
in premiums, dental, vision, hearing and all other
*Source: HealthView Services – 2017 Retirement Health Care Costs Data Report
Health Plan (HDHP)
savings for Retirement
University makes a contribution each year:
You make contributions each year:
Maximums For 2019 (changes each year)
also enrolled in an HDHP)
Employee Only $3,500 Family (Employee+Child(ren), Employee+Spouse, or Family) $7,000 Age 55+ “Catch-Up” Contributions $1,000
̶ No Federal Income Taxes ̶ No State Income Taxes ̶ No Local Income Taxes ̶ No Social Security Taxes (OASDI) ̶ No Medicare Taxes (FICA)
̶ Cash Account earns savings interest ̶ Open an Investment Account
investment representative (FREE)
No Taxes on Withdrawals when Used for IRS-approved Health Expenses
̶ Medical ̶ Prescriptions ̶ Dental ̶ Vision ̶ Hearing Aids ̶ Acupuncture ̶ COBRA premiums ̶ Medicare premiums ̶ Medicare supplement plan premiums (i.e. The IU Blue Retiree Plan)
List of HSA eligible expenses at hr.iu.edu/benefits/medical-plans/hsa.html
Use for health expenses of any tax dependent:
̶ Spouse ̶ Child(ren) ̶ Dependent Relative, etc.
Flexibility of access:
– Use debit/Visa card at healthcare providers (physician offices, pharmacy, dental, vision providers) – Use online tools to pay bills directly – Use online tools to transfer money – Download the mobile app
Unused funds are always yours to keep:
– Even when you retire – Even when you leave IU employment – Even when you are no longer eligible to make contributions – Even when you pass away, your funds can pass to your beneficiaries (remember to review & update every year!)
Use funds to reimburse yourself for expenses incurred all the way back to the date the account was opened.
make tax-free contributions
healthcare expenses, otherwise IRS imposes:
– 20% penalty – Income taxes
expenses:
– NO penalty – Income taxes
̶ You must have a valid Social Security Number. ̶ You cannot be claimed as a dependent on someone else’s tax return. ̶ You must be covered under an HDHP. ̶ You must have NO other medical coverage.
D, Tricare, or VA medical
You can enroll in an HDHP plan and waive the HSA:
̶ No HSA account will be opened; No IU contribution ̶ No taxes or penalties to worry about ̶ Can still enroll in the TSB Healthcare Reimbursement Account
If you are ineligible and still enroll in the HSA:
̶ You will be required to contribute the $300 minimum to receive the IU Contribution to your account ̶ You are responsible for:
taxable income on your annual tax return
̶ Recommend consulting a tax advisor
Automatic Enrollment
– Age 65 and – Receiving benefits from Railroad Retirement Board (RRB); OR – Receiving benefits from Social Security
Initial Enrollment Period
̶ 7 month period around 65th birthday
Special Enrollment Period
̶ Any time while covered by an active group health plan ̶ During 8-month period after employment ends
Postponing Enrollment
̶ Must be in an active group plan
(i.e. IU’s medical plan)
̶ Use special enrollment period
̶ Part A enrollment effective date is backdated 6 months from the date you apply for Medicare or SSI
ANY enrollment in Medicare will make you ineligible to contribute tax-free dollars to your HSA. ̶ Part A ̶ Part B ̶ Part D
HSA
Date of enrollment will affect the amount of contribution allowed for that year: ̶ Prorated amount if partial year ̶ Full amount if December 1 or later
̶ Verify your IU Retiree Status eligibility date ̶ IU’s contribution is made with 2nd paycheck in January
(coordinate with your dept)
̶ Your HSA contributions are split out evenly over the number of paychecks in the year (assuming 12 months
Annual Contribution Maximum
– Prorated based on number of months you are an eligible individual.
Example: Retirement Date:
May 30 Eligible to Contribute: 5/12 of annual max
Each year you make excess contributions:
– Complete a Distribution Request Form
– Send to Nyhart before end of tax year (Dec 31) – Report amount on income taxes; pay taxes
HSA Account Stays with You
– IU automatically notifies Nyhart of retirement – Nyhart converts account to an ‘individual’ account
– Account can remain with Nyhart or later be transferred to another HSA account vendor (if you choose)
Login to your account to:
personal bank account
directly from account
Publications:
Other Tax-Favored Health Plans
Tax Forms:
The IU Human Resources Customer Care Team is here to assist you in all matters related to your employment at Indiana University. Starting from when you begin your career, continuing through your service, and providing a seamless transition as you complete your employment journey – we are here for you.