msaver & hsa basics1

Copyright 2008 First Horizon Msaver, Inc.

First Horizon Msaver First Horizon Msaver Overview &Overview &HSA BasicsHSA Basics

Session 1


– Brief History of First Horizon Msaver

– Health Savings Accounts Basics:

• The relationship of HSAs to High-Deductible Health Plans (HDHP)

• IRS contribution guidelines• HSA market snapshot

Today


March 1864 Memphis, TN- post civil war City economy at a standstill No Financial Infrastructure Frank S. Davis founds First

National Bank of Memphis Monthly building rent in

March, 1864: $75

Company Beginnings


Who is First Horizon Msaver?

A Free-Standing HSA Administrator, working with any Carrier with qualified HDHP’s

Pioneer in consumer driven healthcare since 1997

First to Market in MSA Administration

First to market in HSA Administration

Recognized within the industry for executive leadership and innovation

Exclusive provider of HSA’s to:American Medical Insurance Agency Inc.ADA Member Advantage

Purchased by First Horizon National Corporation April 1, 2005


Who is First Horizon Msaver?


What is an HSA?

Federally authorized, tax favored savings account.

Tax-free savings to pay for healthcare expenses.

Available to any size group.

For HSA contributions, presence of a qualified high deductible medical plan (IRS minimums) $1,100 Single $2,200 Family

HSA Contribution Limits (’08) Single: $2,900 Family: $5,800


How Does it Work?

Health SavingsHealth SavingsAccount PlanAccount Plan

High Deductible High Deductible InsuranceInsurance

Savings Savings AccountAccount

Protects YouProtects YouFrom Big From Big

Medical Claims Medical Claims

Helps Pay Helps Pay Your DeductibleYour Deductible

Tax-Tax-Deductible DepositsDeductible Deposits Interest Income Interest Income

Tax FreeTax FreeTax Free Tax Free

For Medical CareFor Medical Care


HSA Market In 2008, about 7 million Americans are expected to be covered

by an HDHP with an HSA 37% Previously Uninsured 40% Make Less Than $50,000 a year 53% Families with Children 57% Over Age of 40 92% Had funds rollover to the next year

The market size is to predicted to be 14 million participants according to Bearing Point and 15 million according to the Treasury Department by 2010.

By 2012, some 70 million Americans are expected to be participating in at least one of three financial CDH plans—HSA’s, flexible spending accounts (FSA’s) or health reimbursement accounts (HRA’s)—for a total of 40 million estimated accounts, which are projected to put total assets at over $60 billion by 2010.


“Consumer-Driven” Healthcare

Why are HSA’s with HDHP’s growing in popularity?

Introduces people to the actual cost of medical care

Encourages shrewder purchases of medical services, diagnostic tests and prescription drugs

Helps hold down the rising cost of health insurance


What does an IRS HSA Qualified High Deductible Health Plan look like this year?

Individual Coverage Minimum deductible of $1,100 Maximum out-of-pocket expense

of $5600 Family Coverage

Minimum deductible of $2,200 Maximum out-of-pocket of

$11,200


HSA’s - Choice & SavingsIn the traditional health care coverage

approach: Individual buys a standard health

insurance plan Once premium dollars are spent,

regardless of utilization, they are gone forever

There is no opportunity for premium savings or tax savings


HSA’s - Choice & Savings

HSA: Health Savings Account An HSA is an individual tax-exempt

account set up in conjunction with an IRS approved High-Deductible Health Plan

It is designed to pay for any qualified medical expenses and/or to provide savings for the future

Non-eligible expenses are taxed at a 10% penalty and claimed as income


HSA Eligible Individuals:

Must have an HDHP in place Not enrolled in Medicare Cannot be claimed as a dependent

on another’s income tax return Have not used VA benefits for past

90 days


Contributions

• Who may contribute?– Anyone may make a contribution

on behalf of any eligible individual– Eligibility to contribute to HSA is

determined by effective date of HDHP

– The full year’s allowable contribution amount may be placed into the account regardless of which month the HDHP becomes effective


May qualified HDHP planshave co-payments?

• Preventative Care– HDHP can have co-pay for preventative care– Safe harbor list of preventative care

• Periodic health evaluations (e.g., physicals)• Screenings (mammograms)• Routine pre-natal and well-child care• Tobacco cessation programs• Obesity weight loss programs• Certain drugs & medication• Treatment of related condition during procedure

if it would be unreasonable or impracticable to perform another procedure to treat condition


How can prescriptions work with HDHPs?

• If a plan has prescription drug benefits, – HDHP must apply cost of

prescription drug toward annual deductible or person may not contribute to HSA

– Prescription riders not permitted

– Prescription discount cards are permitted


HSA Eligible Individuals • May not be covered by any other

insurance except what is permitted– Specific disease or illness– Hospital Daily Income– Accident– Dental– Disability– Qualified Long-Term Care– Vision– Liabilities incurred under workers’ comp,

tort, relating to ownership or use of property


Quick Review:

Who may establish a Health Savings Account?

How much may one contribute?

What happens at HSA $ upon retirement?

Any qualified individual with a qualified HDHP

$2,900 (individual) or $5,800 (family)

HSA $ may be spent tax free for medical, just like before, or may be used for anything and taxed at the regular tax rate without penalty.


Next Steps & Sessions– Send email to [email protected] to receive credit for today’s session and be eligible for prizes!

–Future Sessions:

Session 2- HSA enrollment process and options- Broker compensations and promotions- Employer funding options

Session 3- Firsthorizonmsaver.com site review- Continuing education

Session 4- HSA Administrator Competitor Pricing- Why First Horizon Msaver Investments

msaver & hsa basics1

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