Health Savings Account (HSA)

If you enroll in the Consumer Choice High Deductible Plan, you will be eligible for a Health Savings Account. A Health Savings Account allows you to save money in a tax-free account that can grow year after year. Because these accounts have certain tax advantages, you must meet the following IRS requirements to be eligible for an HSA:

 

• You participate in a qualified high deductible health plan (HDHP), such as Consumer Choice.
• You have no other medical coverage (unless it is also a qualified HDHP).
• You are not enrolled in Medicare.
• You are not claimed as a dependent on another person’s tax return.

 

An HSA provides a three-way tax advantage:

 

• You can contribute to the account on a tax free basis — and receive monthly employer premium rebate credits. You decide when to spend or save your deposits.
• Your account earns interest income right away — tax free! When you have a minimum account balance of $1,000, you can choose to invest in a wide selection of mutual funds .
• When you withdraw your funds to pay for eligible health care expenses, the funds are typically tax free.

 

Health Savings Accounts are administered by PayFlex.

 

• Contributions are held in an individual account in your name at Fifth Third Bank.  
• Your employer will contribute to your HSA account each month based on your Consumer Choice PPO Plan coverage tier as follows:

Coverage Tier	Monthly Employer Contribution
Employee Only	$30
Employere+ Spouse or Domestic Partner	$22
Employee + Child(ren)	$23
Family	$14

 

You may elect or change pre-tax contributions through payroll deduction at any time throughout the year.

The money in your HSA can be used on a tax-free basis to pay for:

• Your medical plan deductibles
• Eligible health care expenses not covered by insurance (IRS Publication 502)
• Health expenses during retirement
• Any purpose (subject to income and penalty tax if it’s not an eligible expense)
• Certain over the counter (OTC) drugs IF a prescription is provided otherwise OTC drugs are excluded for reimbursement

Beginning in 2011, adult children who are younger than age 26 may be covered under the Consumer Choice PPO option of the Medical Plan even if they are not your tax dependents. 

However, the rules for submitting expenses for reimbursement from your Health Savings Account are not changing.  Due to the way Congress drafted the law, an expense may not be reimbursed from your HSA unless the expense was incurred to provide medical care for yourself, your spouse, or your tax dependent (and, of course, the other conditions for reimbursing an expense must also be satisfied).  This means, for example, that, although you will be able to enroll to cover your 25 year old daughter under the Consumer Choice PPO option of the Medical Plan, you will not be allowed to be reimbursed from your HSA for any of her unpaid medical expenses.

 

After reaching age 65, you can use HSA savings for any purpose (subject to normal income tax).

 

Claims Filing Deadline

Claims must be submitted within 12 months from the date of service for medical and dental and 6 months for vision to be considered.  The claims filing deadline for the Health Care Flexible Spending Account (FSA), Dependent Care Flexible Spending Account (FSA), Limited Purpose Health Flexible Spending Account (FSA) is March 31 of the following calendar year for dates of service in the previous calendar year.

 

Changing Your HSA Contribution Amount

You can change your HSA contribution amount at any time. Be sure to review your HSA contribution election amounts so you stay within the IRS regulations. Visit the IRS website for more information on HSA contribution limits at www.irs.gov (Publication 969).

 

HSA Maximum Annual Contribution

The annual maximum HSA contribution allowed for 2012 is $3,100 for individual (employee only) and $6,250 for family coverage (all other coverage tiers). If you are 55 or older in 2012, you can contribute an additional $1,000 “catch-up” contribution.

 

Maximum contribution amounts include your employer medical premium rebates.  Money not used in the account will roll forward from year to year and does not count toward the annual maximum.

 

Tax Form Filing

The IRS requires you to file a Form 8889 with your federal tax return if you made contributions or took withdrawals from an HSA during the tax year.

 

A Health Saving Account Offers You

• Flexibility – Unused money rolls over from year to year
• Portability – Money in your account goes with you if you retire or leave the company
• Value – Account is tax-free and contributions up to the federal limit can be made each year. In addition, HSA money can be invested.