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Considering a Considering a Health Savings Account? Health Savings Account?

(HSA)(HSA)

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Who is Eligible for an HSA?

Not covered by any other non HSA-compatible health plan

Not claimed as a dependent on another person’s tax return (excluding spouses per Internal Revenue Code)

Not enrolled in Medicare

Individuals who are covered by an HSA-compatible health plan are qualified if they are:

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Basic HSA Concept

Contributions

Contributions

EarningsTax-Deferred

Growth

Tax-Deductible/ Pre-Tax

Contributions

Tax-Free Distributions(For Qualified Medical Expenses)

HSA

Normal Tax(NON-qualified expenses if you are 65 or older)

- Compare to an IRA

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Basic HSA Plan Concept

Part II: Health Savings Account

HSA HSA ConceptConcept

Covers illness or injury after the deductible, and

certain preventive care services at no

cost to you.

Pays for Qualified Medical

Expenses not covered by the

health plan.

•Out-of-pocket includes deductible & co-insurance•Qualifying deductible ranges are limited by the maximum out-of-pocket.

2011 Single Family

Min. Deductible $1,200 $2,400

Max. Out of Pocket $5,950 $11,900

Part I: High Deductible Health Plan

Max. Contribution Single Family

For 2011 $3,050 $6,150

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Advantages of an HSA

» Funds roll over from year to year» No “use it or lose it” philosophy

» Tax benefits on contributions, earnings and distributions

» Contributions are either pre-tax (via paycheck) or tax-deductible

» Portability» Funds follow you » Tax-free withdrawals for Qualified

Medical Expenses even if qualifying coverage ends

» Long-term investment opportunities

» (Not FDIC insured)

» Control over healthcare dollars

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HSAs vs. FSAs

HSA FSA

Account Owner

Employee Employee

FundingEmployee,

Employer, OtherEmployee,

Possible Employer

Roll Over Year-to-Year

Yes No

Portable Yes No

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Online Tools

Available at www.hsabank.com

The Is an HSA right for me? calculation tool helps you decide which health plan is best for you.

The Future Value Calculator provides a personalized estimate of what your HSA could be worth in the future.

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Preventative Care Benefits

Many HSA-compatible health plans offer:» Periodic health evaluations» Routine prenatal and well-child care» Immunizations» Tobacco cessation programs» Screening services

Check with your employer or health plan provider to determine which benefits are offered at no cost to

you - before your deductible is met.

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Account & Investment Options

» Savings Account OptionInterest bearing* and FDIC insured

» Investment Account Option»You may elect to open an investment account that is linked to your HSA

» Not FDIC insured**

*Note: Interest rates are subject to change. Fees may reduce earnings. Current rates available at www.hsabank.com

**Investment products are not FDIC insured, are not a deposit or other obligation of or

guaranteed by the bank, and are subject to investment risks including possible loss of

principal amount invested.

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How To Contribute

» Online through Internet Banking» One-time or recurring from an

external account.

» Checks» Transfers or rollovers

» (MSA, HSA, IRA)

Accountholder Contributions from all sources count

toward the annual maximum.

How Are They Made?

Who Makes Contributions?

Year Individual Family

2011 $3,050 $6,150

Annual IRS Maximum(regardless of deductible)

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Internet Banking

For a demonstration of Internet Banking, visit: http://hsabank.com/~/media/Files/Flash/ibanking_demo.

swf

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Prorating Provision

» If HSA-compatible coverage begins after January 1st in a given year, you can contribute the annual IRS maximum as long as qualifying coverage continues through December 31st of the following year.» Exception--those who change from family to single plans will

need to prorate based on the number of months under each type of coverage.

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Catch-Up Contributions

Accountholders covered under an HSA-compatible health plan who are age 55 or older and not enrolled in Medicare are eligible to make an annual catch-up contribution.

Year Catch-up Amt.

2011 $1,000

An accountholder’s spouse must have their own HSA, be age 55 or older and not be enrolled in Medicare to be eligible to make the catch-up contribution.

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Tax Savings Example

Contribution $3,000 per year for 25 yrs

Annual Medical Expenses $500 per year

Tax Bracket 28% (Federal)

Average Interest Rate 2%

TAX SAVINGS ON CONTRIBUTIONS = $17,500.00

TAX SAVINGS ON DEFERRED GROWTH = $4,921.21

ACCOUNT BALANCE AT THE END OF 25 YEARS =$80,075.75

For illustrative purposes only. Actual savings may vary. Visit www.hsabank.com and click on Calculate Savings for a personalized estimate.

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Distribution Options

» Debit card from Visa®

» Reimbursement from Internet Banking to an external account

» HSA checks» Withdrawal Form

» Mail to HSA Bank

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Qualified Medical Expenses

» Doctor and hospital visits» Medical equipment» Dental care, braces, dentures» Vision care, glasses, contacts» Medications, including many

over-the-counter versions» Medical related transportation

A Qualified Medical Expense is incurred to maintain the health of the accountholder or the accountholder’s

spouse or dependents. The following are included:

*A list of Qualified Medical Expenses can be found in IRS Publication 502, http://www.irs.gov/pub/irs-pdf/p502.pdf. As described in IRS publication 969,

http://www.irs.gov/pub/irs-pdf/p969.pdf, over-the- counter medications are considered Qualified Medical Expenses for HSA purposes.

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Other Qualified Medical Expenses

» Premiums for long-term care insurance» Limited to amount listed in 213(d)(10)

of the Internal Revenue Code

» Premiums for COBRA

» Premiums for coverage while receiving unemployment compensation

» Premiums for individuals over age 65 » Retirement health benefits» Medicare premiums

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Employer Communication Kit

Ask your employer about educational employee materials that outline the benefits of an HSA and provide information on:

•Account use•Potential future value•Taxes…and more

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Spanish Resources

Forms & DocumentsEducational Items

Customer Service

www.hsabank.com/Spanish/

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Employees &Accountholders

Client AssistanceCenter

(800) 357-6246 askus@hsabank.com

M – F, 7 a.m. – 9 p.m., CT

Spanish LanguageSupport

(866) 357-6232

M – F, 7 a.m. – 9 p.m., CT

Service and Support

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For more information, please visit

www.hsabank.com

What Does Your Future Hold?