HSA Training Series

Trends in Rising Premiums & Impact of Obama Care

Year over year trends

Impact of Obama Care on premiums

Introducing HSAs as a solution

Health Savings Account Health Savings Accounts (HSA) were created so that individuals covered by high-deductible health plans (HDHP) could receive tax free savings for all qualified medical expenses prior to meeting their deductible and max out of pocket. These accounts enable individuals to save on their medical expenses and teach them to become better consumers of healthcare.

Triple Tax Benefits CONTRIBUTE TAX-FREE If Your employer offers payroll deduction through a Cafeteria Plan, you may make contributions to your HSA on a pre-tax basis or you can contribute to your HSA post-tax and recognize the same tax savings by claiming the deduction when filing your annual taxes. SPEND TAX-FREE Eligible medical purchases can be made tax-free when you use your HSA. Make this easy by using your Benefits Debit Card or online bill pay. You can also pay out-of-pocket for eligible medical expenses and then reimburse yourself from your HSA. EARN TAX-FREE Unlike most savings accounts, interest earned on an HSA is not considered taxable income when the funds are used for eligible medical expenses. You can also invest HSA dollars and interest earned is also tax free.

Additional Benefits of a Health Savings Account HSA accounts can pay for any qualified dependents expenses even if they are not on your medical plan. HSA accounts can be used to pay for Medicare Premiums, Long Term Care facility premiums, & Cobra Premiums Participants can save their HSA dollars to help them pay for medical expenses they will incur after retirement. Similar to a 401K. HSA accounts are fully portable, you will never lose funds contributed into the HSA and funds will continue to rollover year after year.

Eligibility for a Health Savings Account To be an eligible individual and qualify for an HSA, the participant must meet the following requirements: Covered under a high deductible health plan (HDHP) Have no other health coverage (such as other non-HDHP plans, Medicare, Military health benefits or first dollar coverage cafeteria plans such as FSA or HRA accounts. The participant cannot be claimed as a dependent on someone else's tax return. Must pass CIP

Customer Identification Program What is CIP Customer Identification Program US Patriot Act Anti-money laundering/Anti-Terrorist Verifies Name, Social, DOB & Address Participant must pass to open the HSA account.

Qualified HDHP IRS HSA Limits for 2016 - 2017 Contribution and Out-of-Pocket Limits  for Health Savings Accounts and High-Deductible Health Plans   For 2016 For 2017 Change HSA contribution limit(employer + employee) Self-only: $3,350 Family: $6,750 Self-only: $3,400 Self-only: +$50 Family: no change HSA catch-up contributions (age 55 or older)* $1,000 No change** HDHP minimum deductibles Self-only: $1,300 Family: $2,600 Self-only: no change HDHP maximum out-of-pocket amounts(deductibles, co-payments and other amounts, but not premiums) Self-only: $6,550 Family: $13,100 * Catch-up contributions can be made any time during the year in which the HSA participant turns 55. ** Unlike other limits, the HSA catch-up contribution amount is not indexed; any increase would require statutory change. *These limits do not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit is reached. ** Starting in 2015, out-of-pockets limits for HDHPs under the ACA were slightly higher than the IRS’s. The IRS limits are what determine if an HDHP is HSA-compliant for tax purposes.

Qualified Medical Expenses Medical deductible expenses Copay Co-Insurance Vision Dental Fertility Treatments Prescription drugs Chiropractor Psychiatrist Weight loss programs Monitoring devices Acupuncture Adoption Alternative Healers Addiction programs Physical Therapy Medicare, COBRA, & Long term care premiums Full detailed list: https://www.irs.gov/pub/irs-pdf/p502.pdf

NBS Affiliates

HSA and doTERRA Essential Oils Prior to 2010 all over the counter products were deemed to be eligible for reimbursement in either (FSA) or medical HSA’s. The Affordable Care Act changed that stance so over-the- counter medicines and drugs were eligible for reimbursement through a medical HSA only if they were prescribed by a healthcare professional to treat a specific medical condition. Research regarding the efficacy of the active ingredients in essential oils is ongoing throughout the world. This research indicates that the active ingredients of essential oils have the same efficacy as active ingredients found in other compounds for treating illness and disease. ​This research is allowing essential oil's to be identified more frequently as a mechanism for addressing illness and disease in the human body. For these reasons, it is believed that essential oil's fall in the category of eligible medical expense if there is a letter of medical necessity provided by a healthcare professional.

Future Expectations Increased acceptance of alternative therapies for the treatment of illness and disease is reflected in changes that are proposed to Internal Revenue Code Section 213 in the current healthcare legislation pending in Congress. Although, these are only proposals, they reflect the current attitude in Congress toward liberalizing the definition of medical care. This may move essential oils out of the category requiring a letter of medical necessity, into the medical care category up to expenditures of $1000 per person per year.

Health Savings Account Employee Sample Savings Individual Sample Savings No HSA With HSA Salary $36,000 Contribution — $3,350 Taxable Income $32,650 Taxes $9,954 $9,028 Healthcare Expenses Spendable Income $22,696 $23,622 No HSA With HSA Salary $36,000 Contribution — $3,350 Taxable Income $32,650 Taxes $9,954 $9,028 Healthcare Expenses Spendable Income $22,696 $23,622 Individual Savings On average individuals save between 25-30% by having contributions pulled pre-tax. That’s a HUGE tax savings. For every $1000.00 dollars contributed into the HSA, they are saving about $250 to $300 depending on their tax bracket. $926 in savings $926 in savings $926 in savings

During Retirement, the largest single expense for individuals will be HEALTHCARE $$$ An average retiree spends upwards of $250,000 on medical expenses alone after age 65.

Director of Business Development Questions? Camille Williams Director of Business Development 800.274.0503 x638 camillew@nbsbenefits.com