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What is an HSA?

Health Savings Account

Retirement Accounts

Checking Account

Savings Account

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What is an HSA?• Individually owned savings account• Contributions, distributions, interest earnings –

tax free• No maximum on amount that can be

accumulated• Pay for qualified medical expenses for spouse

& tax* dependents. (Tax dependents as defined by the IRS.)

• Portable

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Tax Free – Qualified Distributions“Qualified medical expenses” spouse & tax dependant children (even if not covered under HDHP) Deductible Co-insurance/Co-pay Over the counter drugs (Over-the-counter medication and

drugs will only be eligible if prescribed by a physician, without regard to whether the drug or medication is available without a prescription)

Dental Expenses Vision Expenses

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“ Other qualified medical expenses” Health plan coverage while receiving federal or

state unemployment benefits. COBRA continuation coverage. Medicare premiums: Part A, B, C & D LTC premiums (portion of) Individuals are responsible for keeping supporting

documentation as with any other tax deductions.

Tax Free – Qualified Distributions

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Tax Free - Distributions• Even if account holders have not saved enough

in HSA to pay for an expense, can always withdraw funds later

• There is no deadline on reimbursements as long as expenses were incurred after HSA effective date

• There is no requirement to use HSA funds for all expenses

• It carries over through the years!

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Maximum Contribution Per Tax Year

Contribution Limits

Coverage 2013Individual $3,250

Family $6,450Maximums indexed annually by Treasury Department

$1,000 Additional Contribution if you are age 55 and older!

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How Does An HSA Work?Requirements to Contribute to an HSA:

1. Must have a qualified HDHP to contribute to an HSA2. Cannot be enrolled in Medicare3. Cannot be claimed as a tax dependent on anyone’s

else’s tax return4. Cannot have any other coverage that pays first

dollar expenses below the deductible (Ex: GP-FSA through employer or spouse, HRA, access to an on-site clinic or Tribal clinic, Tri-Care or VA benefits)

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“Limited Purpose” Health FSAs &HSAs

HSADeductibleCo-ins/Co-PayOver-The-Counter

“Limited Purpose” Health FSAVisionDental

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HSA vs. FSAMedical Reimbursement – FSA

• Account set up by employer• Annual amount available first day

of plan year• No mid-year changes without a

qualifying event• Must use the annual amount within

the plan year• Receipts must be submitted and

claims adjudication required• Cannot accrue interest• Subject to ERISA• Unused FSA balances are forfeited

HSA• Tax-exempt trust/custodial account• Funds must be deposited before using• HSA contributions can be changed

throughout the year (IRS sets limits – indexed every year)

• Balances roll year-to-year. No limit on accumulation.

• Account holder responsible for keeping receipts and determining eligibility

• Interest can be applied• Not subject to ERISA unless employer

takes action that triggers it.• Account holder dies: Spouse becomes

owner. Otherwise, beneficiary claims as income.

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HSA

Account balances above $2,500Mutual funds investments availableMinimum amount to move $50.00

AF Health Services Administration Interest Rates

Balance Rate$0.00 - $500.00 0.00%$501.00 - $2,500.00 0.10%$2,501.00 - $5,000.00 0.15%$5,000.00 - $10,000.00 0.70%$10,000.00+ 1.50%

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HSA

AF Health Services Administration 2 Debit Cards Account Summary available 24/7.

Account Statement mailed quarterly. Unlimited on-line withdrawal. Ability to upload your receipts to your

account No overdraft fees Personalize customer service Some miscellaneous fees may apply

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American Fidelity HSAs

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American Fidelity HSAs

ESB-662-0710

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American Fidelity HSAs

Check your account frequently – keep information up-to-date.

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• After enrollment Welcome packet

mailed 1-2 weeks prior to HSA effective date.

Debit card mailed within 1-2 days of HSA effective date.

American Fidelity HSAs

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• A debit card will be ordered• Use it as a credit card• Can only use at medical

providers such as doctors, pharmacies, hospitals, etc.

After Enrollment

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Learn more: www.afhsa.com www.irs.gov http://www.treas.gov/offices/public-affairs/hsa/

Contact us: HSA-Support@af-group.com 405-523-5699 1-866-326-3600

American Fidelity HSAs

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Health Savings Accounts

Thank You

Neither Health Services Administration nor American Fidelity Assurance Company are providing tax advice. Individuals with an interest in HSAs should contact their tax advisor.