Confidential and proprietary. Reproduction without express written consent is prohibited. Copyright...

Confidential and proprietary. Reproduction without express written consent is prohibited.Copyright © 2010 by HealthEquity, Inc. All rights reserved.

Health Savings Accounts for Your Business and Employees


Contents

• The Health Savings Account Concept

• Top 5 Reasons to Choose an HSA Qualified Plan

• Why HealthEquity?

• How to Enroll

• Consumer and Customer Support

Health Savings Account: Concept

Lets employees “build equity” in their health plan

•Go to higher deductible

•Give savings to employee

•Unspent money rolls over year-after-year

•Over time, employees have enough saved to cover deductible and OOP


Qualified Plan Needed to Open an HSA

Qualified high deductible health plan (HDHP)• Minimum required deductibles :

– $1,200 for self-only coverage

– $2,400 for family coverage

• Maximum out of pocket limits:– $5,950 for self-only coverage

– $11,900 for family coverage

• Have no other unpermitted health coverage*

• Can’t be enrolled in Medicare

• Can’t be claimed as a dependent on someone's tax return

*Automobile, dental, vision, disability ,and long-term care insurance allowed; may also have coverage for a specific disease or illness as long as it pays a specific dollar amount when the policy is triggered. Employer wellness programs permitted if they don’t pay significant medical benefits.


Maximum Contribution Levels

Annual Contributions (subject to change every year, adjusted for inflation)

• Individuals: $3,050/yr

• Families: $6,150/yr

• 55 and over: Added “catch-up” contribution: $1,000/yr


Some Qualified Medical Expenses


Some Unqualified Medical Expenses

• Baby sitting, childcare, and nursing services for a normal, healthy baby • Dancing lessons • Diaper service • Elective cosmetic surgery • Electrolysis or hair removal • Funeral expenses • Future medical care • Hair transplant • Health club dues • Insurance premiums other than those explicitly included • Medicines and drugs from other countries • Nonprescription drugs and medicines • Nutritional supplements, unless recommended by a medical practitioner as treatment

for a specific medical condition diagnosed by a physician • Teeth whitening


Sample Worst-Case Scenario

In this example, a person spends less money in the HSA plan in the event of major medical expenses

Illustrative purposes only


Low Deductible Plan HDHP-HSA Plan

Plan Design 100 deductible $1,500 deductible

$1,000 co-insurance

$1,500 co-insurance

Annual Payroll Deduction for Insurance $1,000 $700

Co-Pays $400 $0

Deductible (or medical expenses paid by you)

$100 $1,500

Additional Out of Pocket (co-insurance - 80%)

$1,000 $1,500

Total Expenses $2,500 $3,700

Minus Employer HSA Contribution NA $1,050

Minus Tax Savings (Fed & State - 22%)

NA $385

Total Out of Pocket Costs $2,500 $2,315

Sample Average Medical Expenses

If a person has $500 in medical expenses, he/she can save money in an HDHP-HAS-based plan

Illustrative purposes only


Low Deductible Plan HDHP-HSA Plan

Plan Design 100 deductible $1,500 deductible $1,000 co-insurance $1,500 co-insurance

Annual Payroll Deduction for Insurance $1,000 $700

Co-Pays $400 $0

Deductible (or medical expenses paid by you) $100 $1,500

Additional Out of Pocket (co-insurance - 80%) $1,000 $1,500

Total Expenses $2,500 $3,700

Minus Employer HSA Contribution NA $1,050

Minus Tax Savings (Fed & State - 22%) NA $385

Total Out of Pocket Costs $2,500 $2,315

HSA Balance (Medical Expenses - HSA Contribution)

Medical Expenses ($500)

Employer HSA Contribution $1,050

HSA Dollars that Roll Over $550

Top 5 Reasons to Choose HSA-Qualified Plan

1. Save on premiums– Typically from 20-30 percent.

2. See a substantial drop in premium trend – Coverage kicks in for catastrophic care only, stopping the

spiral of increasing premiums for benefits vs. insurance risk

3. Earn employee goodwill and recognition of value– Instead of paying for unneeded coverage, invest the

difference in HSAs– The difference in premiums may cover annual deductible– Consider matching employee contributions to provide

superior benefit levels and cover employee’s risk up to the out of pocket maximum

• Research shows interest in HSAs increases when employees have account funds to cover deductible


Top 5 Reasons (Continued)

4. Help employees save for retirement – An HSA is a medical 401(k), but better– Put in pre-tax money in, earn interests or investment returns– Money used for healthcare expenses, or health premiums after age 65,

never taxed– After 65, use funds for anything without paying a penalty*

5. Let employees drive their own healthcare choices– Research shows people spend their own money more carefully.– You spend the same, but gain a partner in controlling costs—your employees!– By funding the HSA, you save without shifting inordinate

costs or risk to employee

*Funds used for non-medical purposes are taxed as income


Why HealthEquity?

Helping consumers understand and manage the financial side of healthcare

•One of the largest HSA administrators

•Proven quality and high-touch performance year-after-year

•Integrated enrollment and administration

• 24/7/365 live support for employers and employees—before and after enrollment

•Help members save and spend healthcare dollars

•Specialized in healthcare accounts—HSAs, HRAs, FSAs, VEBAs

•Servicing more than 12,000 employers, 40 health plans, and 259,000 accounts


Employer Services

• Employer portal – Easy-to-use online employer portal to manage employee accounts

• Add, edit, and delete employees from your HSA plan • Schedule contributions to your employees’ accounts • View your transaction history

• Employee reports – Generate reports for insight into employee account balances and

product usage

• Dedicated employer services – Dedicated to helping meet your needs


Account Services

• FDIC insured– Interest-bearing FDIC insured account

• Visa® Debit Card – Can be used at the point of service or when bills are received

• PayChoice™ payment platform – Proprietary bill pay system

– Manage account information

– See real-time balances

– Get reimbursements

– Make payments

– Schedule payments in advance

– Set up electronic funds transfers


Account Services Cont.

• Investments – Free investment options with no fees

– Minimum requirement balance of $2,000

• Lifetime claims vault – Permanent record keeping of claims and spending detail.

– Save the money until retirement, and then “reimburse” themselves tax free!

• Monthly statements and tax documents – Members will receive monthly statements and the appropriate tax

documents they need to report their HSA to the IRS


Member Services

• Available 24/7/365 • Help find safe, effective ways to save on healthcare in real-time

– Price comparisons for treatment options, including average costs by ZIP code and costs of in vs. out of network

• Help negotiate payment schedule with a provider, if account underfunded

• Get:– Tax tips

– Account balance inquiries

– Reimbursement requests by phone if wanted

• Also access online tools and information on medical and prescription costs


Sample Costs


Predicted Enrollment Set Up Account Fees Monthly Account Fee

Additional Pricing and Fees


Fee Description of Fee Charge

Debit Card Each account comes with 1 free debit card. Additional cards may be purchased by your employees

$5

Reimbursement by Check

Employees may choose to receive reimbursements from their account by EFT, which is free, or through a check in the mail for a small processing fee

$2

Insufficient Funds This fee is charged when the account has insufficient funds to cover a check

$25

Closed Account Charged at account closure. It can be paid by the employer or employee

$25

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