HSA 101 A Quick Overview of the Health Savings Account Basics - PowerPoint PPT Presentation

HSA 101 A Quick Overview of the Health Savings Account Basics

Agenda  Health Savings Account Features  HSA Eligibility  Contributions  Tax Information  Distributions  HSA-Qualified Expenses  Paying for Medical Services  Resources

There are two components to the HSA solution: High gh-Ded Deductible H e Health I Insur surance P e Plan ( (HDH DHP) paired with a Health h Saving ngs a accoun unt ( (HSA SA) Protects you from big medical bills High Deductible Insurance (HDHP) Helps pay your deductible Health Savings + Account Plan Tax-deductible deposits Health Savings Account Tax-deferred growth (HSA) Tax-free for medical care Health Savings Accounts

HSA Key Features  Use HSA dollars to pay for medical expenses tax-free  Funds roll over year to year  Funds are portable  HSAs are owned individually  No “use it or lose it” rule  HSAs earn interest  Funds can be invested  HSAs can build up significantly – no balance limit Health Savings Accounts

HSA Eligibility To open and/or continue contributing to a Health Savings Account, the account holder must meet this criteria: Must be en e enrolled i in a an HSA-qu qualif lified ied H High-Deduc uctible ible • He Health th Pl Plan ( (HD HDHP) Cannot be cover ered ed b by a any o other er i insurance e that • reim imburses es f for h healt lth e h expe penses es (including a medical FSA) Cannot be enr nrolle lled i in any p part o of Me Medic dicare o or Me Medic dicaid id • Cannot be claim imed d as a a d depe epend ndent on another person’s • tax return Must be over 18 years of age • Health Savings Accounts

2019 HSA Contribution Limits 201 201 9 Self $ 3, 50 0 Fa Family $ 7,00 0 No Note: Individuals over 55 years old can contribute an additional $1,000 annually to their HSAs. Health Savings Accounts

IRS Contribution Rules  HSA Contributions are not subject to income tax  Contributions can be made by anyone  You can change your contributions at any time throughout the year  Contributions in excess of the allowable limits must be withdrawn (otherwise incur a 6% excise tax and claim as income)  Eligible individuals ages 55 or older may contribute “catch-up” contributions of $1,000 e 00 each ye year until enrolling in Medicare (one catch- up per account) Health Savings Accounts

How HSA Contributions Impact Taxes  HSA c contributions a ns are e exem empt f from t the he follo ollowing payroll ll t taxes: Social Security • Medicare • Federal income tax • State income tax/unemployment tax (with • the exception of California)  Pre-tax contributions facilitated by an employer are documented on an employee W-2 in Box 12 with a Code “W.” Health Savings Accounts

Annual Tax Documentation IRS Form 8889: 8889: Account holders utilize this form to file taxes. All information to file taxes is available through your bank account information and your employer W-2. IRS Form 1099 1099-SA SA: Details all distributions from the HSA. Customer and IRS receive by January 31. IRS Form 5498 5498-SA SA: Details all contributions into the HSA. Customer and IRS receive by May 31. Health Savings Accounts

What Can You Do with Your HSA Dollars?  According to IRS guidelines, funds within your HSA can be used fo for qualif ifie ied m medic ical expenses ex es (See https://www.irs.gov/pub/irs-pdf/p502.pdf Publication 502).  HSA dollars may y be used ed b by the a e account h holder er, t the a e account holder’s s spouse, e, a and a any t y tax ax depen enden ents.  Distributions can an b be taken en at at a any t y time; HSA reimbursements can be taken for expenses from prior years as long as the account was already established.  Save y your r receip ipts! ! Account holders are responsible for maintaining receipts to prove HSA funds were used for qualified medical expenses if audited by the IRS. Health Savings Accounts

Qualified Medical Expenses   Doctor and hospital visits Medical-related transport   Medical equipment Premiums for long-term care insurance  Limited to amounts listed in 213(d) 10 of IRS Code Dental care, braces, dentures •  Premiums for COBRA  Vision care, glasses, contacts  Premiums for individuals over the age of 65  Medications, including many Retirement health benefits • over-the-counter Medicare premiums • Health Savings Accounts

Non-Medical HSA Distributions Under er A Age 6 e 65: 65+ Yea ears Ol Old: It is possible to withdraw funds, No pe pena nalties f for no non-qua uali lifie ied d but not advisable. Mus ust pa pay di distribu butions ns. . Pay only income taxes inc ncome t taxes pl plus us 20% pe pena nalty o on n on those dollar amounts withdrawn the he no non-medic ical l doll llar amoun unt. for non-medical items. Health Savings Accounts

Payment Process Payment t to a Me Medic ical S l Servic ice P Provid ider ( (Doctor, L Lab or Ho Hospit ital, e etc.):  Provide your insurance card & explain you have an HDHP.  Most physicians allow you to pay after you receive their bill.  Match your bill to the EOB (Explanation of Benefits) sent by your insurance. Paym ymen ent at at t the P e Phar armacy:  Pharmacies immediately access the rate for prescriptions.  You can use your HSA debit card to pay for qualified expenses, or pay with another method and reimburse yourself later. SAVE YOUR RECEIPTS Paym ymen ent A Arran angem emen ents: in case of audit!  Medical bills can often be broken down into smaller payments.  Set up payments directly from your HSA as needed. Health Savings Accounts

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