Top 10 Reasons To Have A Health Savings Account (HSA) TAX SAVINGS You can deduct your HSA deductions from your gross income on your federal tax return, even if you do not itemize deductions. Many states also allow the deduction from state income taxes. EARNED INTEREST Funds in your HSA grow with tax-deferred interest. PORTABILITY You own your account, so even if you change jobs, your HSA funds go with you. AFFORDABLE HEALTH COVERAGE Use your Health Savings Account to cover 100% of the cost of routine medical expenses like office visits, lab tests, and over-the-counter drugs (with a prescription only). REDUCED INSURANCE PREMIUMS Your insurance premiums can be substantially lower when you change from a low-deductible plan to a high-deductible plan. LONG-TERM SAVINGS Because your funds can roll over from year to year, you can let the funds in your account grow tax-deferred. That’s why HSAs have been referred to as the “Medical IRA.” RETIREMENT BONUS After age 65, you may make withdrawals from your HSA for any reason without the 20% penalty imposed before age 65 for non-medical withdrawals. (Note: you’ll still have to pay taxes on the money.) SAFETY NET There is no “use it or lose it” provision, so you can build up the savings in your HSA to use for major health events. COVERAGE FOR THE “EXTRAS” You can also use your HSA funds for programs not usually covered by other health plans, including dental, optical, and much more. EMPOWERMENT Take control of your routine healthcare decisions - you get to choose the healthcare and providers that you want. DataPath Administrative Services, Inc. (DPAS) 1601 Westpark Drive Suite 9 Little Rock AR 72204 Voice 501.687.6954 Secure Fax 501.687.3282 www.idpas.com [email protected]
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Top 10 Reasons To Have A Health Savings Account (HSA)
TAX SAVINGSYou can deduct your HSA deductions from your gross income on your federal tax return, even if you do not itemize deductions. Many states also allow the deduction from state income taxes.
EARNED INTERESTFunds in your HSA grow with tax-deferred interest.
PORTABILITYYou own your account, so even if you change jobs, your HSA funds go with you.
AFFORDABLE HEALTH COVERAGEUse your Health Savings Account to cover 100% of the cost of routine medical expenses like office visits, lab tests, and over-the-counter drugs (with a prescription only).
REDUCED INSURANCE PREMIUMSYour insurance premiums can be substantially lower when you change from a low-deductible plan to a high-deductible plan.
LONG-TERM SAVINGSBecause your funds can roll over from year to year, you can let the funds in your account grow tax-deferred. That’s why HSAs have been referred to as the “Medical IRA.”
RETIREMENT BONUSAfter age 65, you may make withdrawals from your HSA for any reason without the 20% penalty imposed before age 65 for non-medical withdrawals. (Note: you’ll still have to pay taxes on the money.)
SAFETY NETThere is no “use it or lose it” provision, so you can build up the savings in your HSA to use for major health events.
COVERAGE FOR THE “EXTRAS”You can also use your HSA funds for programs not usually covered by other health plans, including dental, optical, and much more.
EMPOWERMENTTake control of your routine healthcare decisions - you get to choose the healthcare and providers that you want.
DataPath Administrative Services, Inc. (DPAS) 1601 Westpark Drive Suite 9 Little Rock AR 72204 Voice 501.687.6954 Secure Fax 501.687.3282 www.idpas.com [email protected]
HSA Frequently Asked Questions
DataPath Administrative Services, Inc. (DPAS) 1601 Westpark Drive Suite 9 Little Rock AR 72204 Voice 501.687.6954 Secure Fax 501.687.3282 www.idpas.com [email protected]
Can anyone open an HSA?No. You have to be enrolled in a High Deductible Health Plan. A High Deductible Health Plan is defined as a deductible of at least $1,200 for Employee Only health coverage or at least $2,400 for Family coverage.
How much can I contribute each year?IRS limits for 2013 are $3,250 per year if you have Employee Only coverage, or $6,450 for Family coverage. If aged 55 or older, you can also make “catch-up” contributions of up to $1,000 per year above those limits.
How much can I spend each year?The only spending limit is your HSA account balance. You can only withdraw up to the amount in your account at that point in time. Any unused funds roll over from year to year. You do not lose any funds if they are not used by the end of the year.
What can I spend my HSA funds on?You can use HSA funds for any expense accepted by the IRS as a legitimate medical expense, such as doctor visits, therapy, hospitalization, prescriptions, vision care, dental, etc. To be eligible the expense must be incurred on or after the date the HSA account was opened. HSA funds can also be used for health insurance premiums such as COBRA and Tefra.
Can I spend HSA funds on family members who are not on my health plan?If you have Employee Only coverage, and your spouse or dependents have separate health coverage that’s not a high deductible plan, you can still use your HSA funds to pay their medical expenses as long as you file a Federal tax return that includes that person as a joint filer or dependent.
How do I access my funds?You will receive a mySourceCardTM MasterCard® Debit Card that is linked to your HSA account. This is a limited-purpose MasterCard® which is coded for medical providers only. Swipe the card just as you would any credit card; there is no PIN. The card lets you cover expenses without having to pay out of pocket first and then wait for reimbursement. If your medical provider does not accept credit cards or for whatever reason you did not use your mySourceCardTM to pay the expense, then you can submit a paper claim for reimbursement.
Do I have to keep up with receipts?DataPath Administrative Services offers an “electronic shoebox” to store receipts if you don’t want to have to keep up with them yourself. At this time, the IRS doesn’t require receipts for the HSA.
I’m going to become eligible for Medicare later this year. Can I still have an HSA?If any part of Medicare is elected, you cannot contribute any more money after your Medicare effective date. However you can continue to use up any funds previously contributed.
Any unused funds roll over from year to year and continue to earn interest tax-free.
Y ear after year, insurance premiums
continue to rise, while you
continue to need the security of a quality
health plan. Fortunately, you have a
powerful new option…
Health Savings AccountsHSAs are individual savings accounts that
you can use to pay for qualified health care coststax-free. Plus, any unused funds roll over from yearto year and continue to earn interest tax-free.
You can:
• Contribute to an HSA
Tax-Free.
• Earn money from interest
Tax-Free.• Get medical disbursements
Tax-Free.
An HSA …• Reduces insurance premiums paid by
you and your family.
• Saves you state, federal, and FICA taxes.
• Rolls over from year to year.
• Earns interest tax-free.
• Remains with you after retirement.
Tax Break!Paying your insurance premiums with pre-tax
dollars decreases your Federal and State income taxesand increases your take-home pay.
Lower Premiums!To open an HSA, you must have a High-
Deductible Health Plan, which means lower premiumsfor you and your family (sometimes up to 50% basedon your current plan).
The Personal SolutionIt is important to find an experienced partner who
can guide you through the process of establishing andadministering your HSA. The services that we provide willensure that you are up to date with the latest regulatorychanges and manage your HSA in accordance with the law.
Who We Are and What We Do• We are an independent administrator, so you can
change insurance plans without changing yourHSA administrator or HSA custodian.
• We can certify that your health insurance plan isHSA-compatible to ensure that your plan startsout on the right path.
• We provide you access to the Claims VaultSM, an electronic “shoebox” where you can store your receipts indefinitely for reimbursement at a later time. Expenses incurred today can be pulled out decades later, allowing you to build up interest tax-free.
• We can provide contribution management,reducing your exposure of over-contribution.
• We can provide certification of your medicalexpenses to ensure that your distributions are tax-free.
• We provide on-line access to your HSA foryour secure account transactions.
Get Started Today With the Health Care Plan
That Actually Makes You Money!
Benefit Administrationyou can
Depend On!
DataPath Administrative Services, Inc. • 1601 Westpark Dr., Suite 9 • Little Rock, AR 72204 • www.idpas.com • 877.685.0655
Important Change Regarding Over-the Counter (OTC) MedicationsEffective January 1, 2011, OTC medications require a doctor’s prescription to be eligible for FSA/HSA reimbursement.
As a result, OTC medications cannot be purchased using the mySource card unless dispensed by a pharmacy the same as a standard prescription. If a manual claim is submitted for purchase on or after 1/1/11 of an OTC medication , a copy of the prescription and the purchase receipt must both be included with the claim in order to receive reimbursement.Non-medicated OTC products (gauze pads, diabetes test strips, saline solution, etc.) are not affected by this change in the law. You can continue to receive FSA/HSA reimbursement for such items in the same manner you did prior to 1/1/11.
FSA/HSA Eligible Health Care Expenses
FSA/HSA Eligible OTC Medications and Products
*if prescribed for a particular ailment or medical condition; provider letter required
Acupuncture •Alcoholism treatment •Allergy shots and testing•Ambulance (ground or air)•Artificial limbs•Blind services and equipment•Car controls for handicapped*•Chiropractor services •Coinsurance and deductibles•Contact lenses •Crutches, wheelchairs, walkers•Deaf services -- hearing aid/batteries, •hearing aid animal & care, lip reading expenses, modified telephone, etc.Dental treatment•Dentures •Diagnostic tests•Doctor’s fees •Drug addiction treatment & facilities•Drugs (prescription) •
Eye examinations and eyeglasses •Home health and/or hospice care•Hospital services•Insulin •Laboratory fees •LASIK eye surgery•Medical alert (bracelet, necklace)•Medical monitoring and testing •devices*•Nursing services •Obstetrical expenses •Occlusal guards •Operations and surgeries (legal)•Optometrists •Orthodontia •Orthopedic services•Osteopaths •Oxygen/oxygen equipment•Physical exams (except for employ-•ment-related physicals)
Physical therapy •Psychiatric care, psychologists, psy-•chotherapists Radial keratotomy •Schools (special, relief, or handi-•capped) Sexual dysfunction treatment •Smoking cessation •Surgical fees •Television or telephone for the hear-•ing impaired Therapy treatments* •Transportation (essentially and pri-•marily for medical care; limits apply)Vaccinations•Vitamins (prescription only)*•Weight loss programs* •X-rays•
Please note that DataPath Administrative Services does not intend this list to be comprehensive tax advice. For more detailed information, please consult IRS Publication 501 or see your tax advisor.
DataPath Administrative Services, Inc. • 1601 Westpark Dr., Suite 9 • Little Rock, AR 72204 • www.idpas.com • 877.685.0655
FSA/HSA NON-ELIGIBLE Health Care Expenses
FSA/HSA NON-ELIGIBLE Over-the-Counter ProductsThe following are examples of OTC medications & products which are NOT eligible for FSA/HSA reimbursement.
Additional items will join this list effective January 1, 2011, due to changes in the law brought about by the Patient Protection and Affordable Care Act (PPACA) of 2010. See reverse side for additional information.
Advance payment for services to be rendered •Automobile insurance premium allocable to medical •coverageBoarding school fees•Body piercing•Bottled water•Chauffeur services•Controlled substances•Cosmetic surgery and procedures•Cosmetic dental procedures•Dancing lessons•Diapers for Infants•Diaper service•Ear piercing•Electrolysis•Fees written off by provider•Food supplements•Funeral, cremation, or burial expenses•Hair transplant•Herbs & herbal supplements•Household & domestic help•
Health programs, health clubs, and gyms•Illegal operations and treatments•Illegally procured drugs•Insurance premiums (not reimburseable under FSA… •only PRA)Long-term care services•Maternity clothes•Medical savings sccounts•Premiums for life insurance, income protection, dis-•ability, loss of limbs, sight or similar benefitsPersonal items•Preferred provider discounts•Social activities•Special foods and beverages•Swimming lessons•Tattoos/tattoo removal•Teeth whitening•Transportation expenses to & from work•Travel for general health improvement•Uniforms•Vitamins & supplements without prescription •
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