HSAs: Three Ways to Win

Major Benefits of an HSA  A tax-advantaged way to manage your healthcare costs  Increased choice over who you pay & how you pay for your services  A tax efficient tool for retirement savings

HSAs: The Brilliant Basics You own the account - account is ‘portable’ No ‘use it or lose it’ provision Employees can choose their healthcare professionals (including out-of-network)

The Brilliant Basics - continued Save with lower health insurance premiums Employees can manage their medical expenses more efficiently Plan ahead & save for large medical expenses No time limit to reimburse yourself for eligible expenses

Tax-Advantaged Savings Vehicle Pre-tax Post-tax cash contributions HSA Contributions can come from both the employer and employee/individual Tax-free interest or investment earnings

More Tax Advantages Tax-free distributions Contributions can be made until April 15 of following year (for prior plan year) Additional ‘catch-up’ contributions can be made by individuals aged 55 or older (until they enroll in Medicare) No income limits to contribute

Benefits for Participants with High Healthcare Expenses Optimize your HSA account benefits with pre-tax contributions. Plan ahead when you anticipate a large expense such as, surgical procedures or expensive medicines Enjoy HSA tax-free earnings and withdrawals, and reimburse yourself at any time

Benefits for Medium HSA Users Manage your medical costs more efficiently (use HSA debit card for co-pays, prescriptions; maximize deductible at year-end) Plan ahead for large medical expenses in future years with pre-tax contributions and enjoy tax-free earnings Can make prior year contributions until April 15 of following year & reimburse at any time

Advantages for Occasional HSA Account Users Enjoy tax-free earnings on the portion of your account that you don’t currently need Ability to plan ahead & save for future healthcare expenses with pre-tax contributions Take your account with you when you retire or change employers No time limit to reimburse yourself from HSA, even in retirement or if unemployed

Allowable HSA Expenditures Doctor’s office visits (deductibles/coinsurance) Lab fees Prescription drugs (incl. prescribed vitamins) Acupuncture; Chiropractic services Dental care, including braces Hearing aids Prescription eyeglasses; LASIK surgery Smoking Cessation & Weight loss programs See complete list in IRS Publication 502

Basics of Cash Flow Benefit Pay yourself first Make ‘catch-up’ contribution if 55 or older Plan ahead for large expenses Can ‘back-load’

Managing Cash Flow Impact Unused contributions can be invested and accumulate tax-free (like an IRA) If cash flow is tight, estimate the amount of out-of-pocket costs that need to be covered and contribute accordingly If you underestimate your expenses, you have until April 15 of the following year to fund H A S Can reimburse eligible expenses at any time

Nuts and Bolts of HSA Savings Bring HSA debit/credit card to doctor appointments (pay co-pays) & when filling prescriptions Keep track of receipts, distributions & record qualified expenses on a worksheet Maximize deductible Make doctor & dentist appointments (especially out-of-network) Fill prescriptions Make eligible purchases