Health Savings Accounts (HSA) November 16, 2016

What is a HSA? What are some potential advantages of health savings accounts? You decide how much money to set aside for health care costs (medical, dental, vision, prescription, etc) Your employer may contribute to your HSA, but you own the account and the money is yours even if you change jobs. Any unused money at the end of the year rolls over (stays in your account) to the next year (unlike a FSA) You don't pay taxes on money going into your HSA HSA contributions are not subject to the irrevocable election rule, so employees are not locked in at their original contribution amount Contributions are excluded from federal income tax Withdrawals for eligible expenses are exempt from federal income tax Unused money is held in an interest-bearing savings or investment account Account can be used as a retirement plan for your health care expenses Debit cards can be used for expenses Funds can be used to pay for expenses of spouses and dependent children

Investing Employees can deposit funds into their account and earn tax-free interest and investment income year after year. With a HSA, as long as the funds are used for qualified medical expenses, account holders never pay taxes on the money – it’s not a tax-deferred account like an IRA or a 401(k), it’s actually a tax-free account. $2,000 minimum in HSA to invest Mutual Fund selection option managed by DEVENIR Self directed brokerage option powered by TD Ameritrade (trading fees may apply). Tax-free growth of interest or investment earnings* For either investment option, integrated, online access to trading, balance information, and much more is available on the HSA Bank website via myCigna.com

Eligibility Medical Basic Plan (High Deductible Health Plan) Features: In-network deductibles of $2,000/individual and $4,000/family Once deductible is met, the plan will cover in-network expenses at 80% and out-of-network expenses at 60% 100% coverage for in-network preventive care services (no copays or deductibles will apply) In-network out-of-pocket maximum of $3,500/individual Cannot have any other health coverage which is not also a qualified high-deductible plan Not covered by spouse’s medical or pharmacy plan (unless the plan is also a qualified HDHP) Must not be enrolled in Medicare (A, B or D), TRICARE, or a Full Purpose FSA (including a spouse’s Full Purpose FSA) Cannot be claimed as a dependent on another person’s tax return

The medical claims process DELIVERING VALUE. EVERY DAY. The medical claims process If you opt to have your claims displayed on the HSA Bank site, you can elect to have all or some of your claims paid directly from your HSA. You visit in-network doctor/hospital/ facility Cigna receives and processes the claim Cigna sends an explanation of benefits or EOB as your receipt You can log in to myCigna.com to build an on-demand health statement. If not, you have the option to pay the doctor bill using your HSA or pay out of pocket. Sick visit to an in-network doctor/hospital/facility – receive discounted rate for Cigna plan. Cigna receives the claim from doctor and processes it based on the HSA-qualified plan deductible, covered expenses and Cigna-negotiated discounts. If you opt to have your claims displayed on the HSA Bank site, you can then elect to have all or some of your claims paid directly from your HSA. If not, you have the option to pay the doctor bill using your HSA (debit card/checkbook/online bill pay/fund transfer) or pay out of pocket. Cigna provides an explanation of benefits or EOB (“receipt”) showing: doctor’s fee, Cigna discount, amount billed by the health care plan, amount paid to doctor and what you saved. You can log in to myCigna.com to build an on-demand health statement. You can customize your statement view according to: date range, claim type, transaction type, family member/self and more. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2016 Cigna

Your HSA web and mobile experience on myCigna DELIVERING VALUE. EVERY DAY. Your HSA web and mobile experience on myCigna Real-time HSA balances displayed on the Review My Coverage section of myCigna Mobile view of HSA account balance and transactions Welcome Guest Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2016 Cigna

HSA Contribution Maximums Under age 55 and not enrolled in Medicare (based on a 12-month period): Up to $3,400 individual coverage* Up to $6,750 family coverage* Age 55 or older: Maximum contribution increases by $1,000 (considered a “catch-up” contribution) Up to $4,400 individual coverage* Up to $7,750 family coverage* To make the maximum contribution in a calendar year, you must: Meet all requirements to be eligible for HSA contributions on January 1 Remain qualified through December 1 If these criteria are not met, maximum contribution is prorated = if 1/12 maximum contribution for each month then individual is qualified During Open Enrollment, the Benefits Portal will take into account the maximum CALIBRE contribution for you

Current Optum Participants Keep: $3 monthly maintenance fee if balance is less than $5000 No fee if balance is greater Transfer: $20 Fee Close Account Self-Transfer You will not be able to make payroll contributions into your Optum account

Current Optum Participants Transfer HSA Bank Direct Rollover form 5-10 mail $20 transfer Blackout period where funds cannot be used 5-10 days

Current Optum Participants Close Account Expenses you had, but did not yet reimburse yourself for Tax penalty Self-Transfer Optum Account Close Form 4-5 processing 7-10 processing by HSA Bank after mail receipt 30 day window to mail without penalty (45 total)

CALIBRE Incentives- S1 & S3 Enhancement for 2017 is CALIBRE is increasing the HSA contribution earning opportunity to $750 for Employee and $1000 for Family. The CALIBRE contribution DOES count against annual contribution maximum CALIBRE will contribute $250 for individuals who complete the UHC Health Risk Assessment In order to be eligible for the $500 for the family contribution, all covered adults must complete the Health Risk Assessment Cigna Health Risk Assessment The additional $500 CALIBRE HSA contribution is contingent on completion of a biometric screening (a physical by your Primary Care Physician will suffice) Additional instructions will be available in human resources. Biometric Screening

How to Sign Up Sign up during Open Enrollment using the new Benefits Portal CALIBRE & Cigna will create your account for you Must verify information within 60 days You may sign up later if you choose May change contribution at any point in time

HSA Regulations Expenses eligible for reimbursement from an HSA: Section 213(d) medical expenses (same list as Flexible Spending Accounts) Qualified long term care premiums COBRA premiums Health care premiums while receiving unemployment benefits If Medicare-eligible due to age, Medicare and retiree health insurance premiums (but not Medicare supplement policies) Non-qualified withdrawals are subject to tax and additional excise tax of 20% Substantiation does not need to be submitted for reimbursement; however, it is the taxpayer’s responsibility to keep it on file For each employee who enrolls in the Basic Plan and completes the Health Risk Assessment/Biometric Screening, CALIBRE will contribute $750/$1000 into their account (prorated based on date of hire and employment status)* Employees who are not eligible for an HSA or who are eligible but do not wish to establish an HSA can elect to take the $750/$1000 as taxable income Funds must be in the account in order for employees to access them Employees may change their contribution amount at any time throughout the year

Questions?