HSAs: Three Ways to Win

Major Benefits of an HSA

A tax-advantaged way to manage your healthcare costs

Increased choice over who you pay & how you pay for your services

A tax efficient tool for retirement savings

HSAs: The Brilliant Basics

You own the account - account is ‘portable’

No ‘use it or lose it’ provision

Employees can choose their healthcare

professionals (including out-of-network)

The Brilliant Basics - continued

Save with lower health insurance premiums

Employees can manage their medical expenses

more efficiently

Plan ahead & save for large medical expenses

No time limit to reimburse yourself for eligible

expenses

Tax-Advantaged Savings Vehicle

Pre-tax

Post-tax cash contributions

HSA Contributions can come

from both the employer and

employee/individual

Tax-free interest or

investment earnings

More Tax Advantages

Tax-free distributions

Contributions can be made until April

15 of following year (for prior plan

year)

Additional ‘catch-up’ contributions can

be made by individuals aged 55 or

older (until they enroll in Medicare)

No income limits to contribute

Benefits for Participants with High Healthcare Expenses

Optimize your HSA account benefits with pre-tax contributions.

Plan ahead when you anticipate a large expense such as, surgical procedures or expensive medicines

Enjoy HSA tax-free earnings and withdrawals, and reimburse yourself at any time

Benefits for Medium HSA Users

Manage your medical costs more efficiently (use HSA debit card for co-pays, prescriptions; maximize deductible at year-end)

Plan ahead for large medical expenses in future years with pre-tax contributions and enjoy tax-free earnings

Can make prior year contributions until April 15 of following year & reimburse at any time

Advantages for Occasional HSA Account Users

Enjoy tax-free earnings on the portion of your account that you don’t currently need

Ability to plan ahead & save for future healthcare expenses with pre-tax contributions

Take your account with you when you retire or change employers

No time limit to reimburse yourself from HSA, even in retirement or if unemployed

Allowable HSA Expenditures

Doctor’s office visits (deductibles/coinsurance) Lab fees Prescription drugs (incl. prescribed vitamins) Acupuncture; Chiropractic services Dental care, including braces Hearing aids Prescription eyeglasses; LASIK surgery Smoking Cessation & Weight loss programs

See complete list in IRS Publication 502

Basics of Cash Flow Benefit

Pay yourself first

Make ‘catch-up’ contribution if 55 or older

Plan ahead for large expenses

Can ‘back-load’

Managing Cash Flow Impact

Unused contributions can be invested and accumulate tax-free (like an IRA)

If cash flow is tight, estimate the amount of out-of-pocket costs that need to be covered and contribute accordingly

If you underestimate your expenses, you have until April 15 of the following year to fund H A S

Can reimburse eligible expenses at any time

Nuts and Bolts of HSA Savings

Bring HSA debit/credit card to doctor appointments (pay co-pays) & when filling prescriptions

Keep track of receipts, distributions & record qualified expenses on a worksheet

Maximize deductible Make doctor & dentist appointments

(especially out-of-network) Fill prescriptions Make eligible purchases