1. Health Savings Account

2. What is a Health Savings Account/High Deductible Health Plan (HSA/HDHP)?
An HSA is a tax-exempt savings account designed to save money to pay for your qualified health care expenses
It works in combination with a High Deductible Health Plan (HDHP)
A HDHP has a higher annual deductible
Typically, you will pay for all your medical expenses up to the deductible. The only exclusion is preventive care.
Preventive care is covered 100%, without paying the deductible, when received from an in-network provider
Once you have met your deductible, all expenses are covered 100%, after you pay the applicable co-pay
The district will contribute $100 per month into your individual Health Savings Account (accumulate $1,200 by the end of the year, leaving the employee portion of the deductible - $1,400)
The deductible for 2017 will be $2,600 for an individual and $5,200 for a family
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3. HSA Bank Account
When you choose an HSA, you will open a bank account with OPTUM bank. This is a virtual bank that is connected to your HSA account. (This will be done during Open Enrollment) Your account will accept deposits by Kirkwood School District and you, if you choose to do so.
The funds are used to pay for qualified medical expenses, including eligible dental and vision expenses. If you use the funds for non-qualified expenses, you would pay taxes on the money withdrawn, plus a 20% tax penalty.
All contributions are tax free, via payroll deduction. The funds may earn interest, which is also tax free
The HSA bank account is your account to keep, wherever you go. When you leave KSD for another job, or retirement, the money that you have in your HSA is yours and you will continue to use it for medical expenses, even if you are not covered by the Kirkwood School District insurance plans. It is not a “Use It Or Lose It” plan like the Flex Spending Account.
Your HSA is funded with employer money and employee money, if you wish to contribute.

4. Rate Comparison Cost to employee: Child $344.00 $516.60 $2,071.20
Monthly Premium
HSA KSF Annual Savings
Child $ $ $2,071.20
Spouse $ $ $2,158.20
Family $ $1, $4,229.40

5. Maximum Annual HSA Pre-Tax Contributions for 2017
Single - $3,350*
Employee w/Spouse - $6,750*
Employee w/Child - $6,750*
Family - $6,750*
Anyone on the plan, 55 years and older, can contribute an additional $1,000 under the catch up provision
*Need to include the District’s contribution in the maximum

6. Why would I want to have an HSA if the Kirkwood Self-Funded Plan only has a $300 deductible and I do not have to pay a premium?
Tax-free deductions to your HSA account, if you choose, up to the IRS annual maximum
Lower monthly premium for dependents (spouse & children)
Tax-free withdrawals for qualified medical expenses for employee, spouse or dependent(s), even if the spouse or dependent(s) are not covered by the HSA
Tax-free earnings on dollars accumulated in the HSA
You own the HSA account. If you change jobs, retire, etc., the money stays with you
The district will deposit $1,200 annually into your HSA to help off-set the deductible
No “use it or lose it” rules like in a FSA (Flexible Spending Account)

7. YOU MAY NOT PARTICIPATE IN AN HSA IF:
You are enrolled in any Medicare plan (Part A, B or D)
You enroll in a FSA (Flexible Spending Account) for Medical Reimbursement along with the HSA. Dependent Care reimbursement accounts are permissible
You are claimed as a dependent on another person’s tax return (possibly a parent’s tax return if you are under the age of 26)
You have other medical coverage (double covered, perhaps through a spouse or parent)

8. EXAMPLE 1 Employee only
Deductible ……………………………. ……………… $2,600 
KSD will contribute $1,200 Into your Health Savings Account
Employee elects $0 contribution into HSA account
Co-insurance after Deductible and Co-pay …… %
Preventive Care ……………………………………………………. 100%
Office Visit for annual physical …………………………… You would pay $0
Total Out-of-Pocket Expense for Year ……………………. ………. $0
Balance in your HSA account on 12/31/17…………………………. $1,200

9. EXAMPLE 2 Employee only
Deductible ………………………………… $2,600 
KSD will contribute $1,200 Into your Health Savings Account
  Employee elects $0 contribution into HSA account
Co-insurance after Deductible and Co-pay …… %
Preventive Care ………………………………………… 100%
Office Visit for sick visit (cost $50) ……………………… You would pay $50
ER visit (cost $500) ……………………………………… You would pay $500
Prescription for antibiotic (cost $23) ……………………. You would pay $23
Total annual medical expenses …………………………. $573
Total Out-of-Pocket Expense for Year ………………… $0 (because KSD contributed $1,200 into your HSA)
Balance in your HSA account on 12/31/17 …………………………. $627

10. EXAMPLE 3 Employee only
Deductible ………………………………… $2,600 
KSD will contribute $1,200 Into your Health Savings Account
Employee elects $0 contribution into HSA account
Co-insurance after Deductible and Co-pay …… %
Preventive Care ………………………………………….. 100%
Office Visit for sick visit (cost $50) ………………………. You would pay $50
ER visit (cost $500) ………………………………………. You would pay $500
Inpatient hospital stay (cost $10,000) …………………. You would pay $2,350
(remaining $2,050 deductible + $300 hospital co-pay)
Generic Prescription for antibiotic (cost $23) ………….. You would pay $10 co-pay
Total annual medical expenses …………………………. $2,910
Total Out-of-Pocket Expense for Year …………………. $1,710 (because KSD contributed $1,200 into your HSA)
Balance in your HSA account on 12/31/17……………………………… $0

11. EXAMPLE 4 Family coverage
Deductible ……………………………… $5,200 ($2,600 individual, up to $5,200)
KSD will contribute $1,200 Into your Health Savings Account
  Employee elects $0 contribution into HSA account
Co-insurance after Deductible and Co-pay …… %
Preventive Care ………………………………………….. 100%
Office Visit for annual physical Employee………………. You would pay $0
Office Visit for annual physical Spouse………………..... You would pay $0
Office Visit for annual physical Child #1………………..... You would pay $0
Office Visit for annual physical Child #2………………..... You would pay $0
Total Out-of-Pocket Expense for Year …………………… $0
Balance in your HSA account on 12/31/17 ……………………………. $1,200
You have saved $ per month on the family premium, or $4, annually

12. EXAMPLE 5 Family coverage
Deductible ……………………………… $5,200  ($2,600 individual, up to $5,200)
KSD will contribute $1,200 Into your Health Savings Account
Employee elects $0 contribution into HSA account
Co-insurance after Deductible and Co-pay …… %
Preventive Care ………………………………………… 100%
Office Visit for sick child #1 visit (cost $50) …………. You would pay $50
Office Visit for sick child #2 visit (cost $50) …………. You would pay $50
ER visit for Employee (cost $500) ………………………. You would pay $500
Prescription for antibiotic (cost $23) …………………….. You would pay $23
Out-patient surgery for Spouse (cost $5,000) ………….. You would pay $2,600
Total annual medical expenses ……………………… $3,223
Total Out-of-Pocket Expense for Year …………………. $2,023 (because KSD contributed $1,200 into your HSA)
Balance in your HSA account on 12/31/17 ……………………………. $0
You have saved $ per month on the family premium, or $2, annually

13. EXAMPLE 6 Family coverage
Deductible ……………………………… $5,200 ($2,600 individual, up to $5,200)
KSD will contribute $1,200 Into your Health Savings Account
Employee elects $0 contribution into HSA account
Co-insurance after Deductible and Co-pay …… %
Preventive Care …………………………………………… 100%
Office Visit for sick child #1 visit (cost $50) ……………… You would pay $50
Prescription for antibiotic (cost $23) …………………….. You would pay $23
ER visit for Employee (cost $500) ………………………. You would pay $500
Hospital Stay for Employee (cost $50,000) …………….. You would pay $2,400
(remaining $2,100 deductible + $300 hospital co-pay)
Out-patient surgery for Spouse (cost $5,000) ………….. You would pay $2, (remaining $2,527 deductible)
Total annual medical expenses ……………………… $5,500
Total Out-of-Pocket Expense for Year ………………….. $4, (because KSD contributed $1,200 into your HSA)
Balance in your HSA account on 12/31/17………………………………. $0
You have saved $ per month on the family premium, so you have spent $70.60 for the year

14. How do I use my HSA at the doctor’s office?
Show your insurance card so the claim will be filed with UHC. UHC will process the claim, apply the network discount and credit the deductible. Your claims will be processed toward the deductible in the order in which they are received, not necessarily by the actual date of service.
You will receive an Explanation of Benefits (EOB) from UHC, either via mail or electronically via The EOB explains how the claim was paid. Your doctor will also receive the claim information.
You may receive a bill from your doctor if you owe anything for your visit after UHC has processed the claim
You can pay your bill by using the funds in your HSA, by using your HSA debit card

15. How do I use my HSA at the pharmacy?
Show your insurance card to the pharmacist so the prescription can be run through UHC
The pharmacist will be able to confirm if there is any out-of-pocket expenses for the prescription
You can pay for your prescription bill by using the funds in your HSA, by using your HSA debit card
RX ‘n Go – still order generic
prescriptions with no co-pay

16. KEEPING RECEIPTS AND PAYING BILLS
No claims submission is required for an HSA
You MUST keep your own receipts as proof that your purchases were eligible expenses, in case of an IRS audit
You may use your HSA debit card or optional checks to pay for eligible expenses directly to the provider
You may save your bills for years and pay yourself back in the future, once your account has grown in value, provided all receipts are dated since account opening date
If you use the money in this account for a non-qualified health expense, you will pay a 20% penalty and tax. (At age 65, you can use the money in the account for any purchase, however if it is used for a non-qualified health care expense, you will pay tax on the purchase)

17. Eligible Expenses Below is a partial list of qualified medical expenses eligible for reimbursement under your HSA. For more detailed information, you can visit:
Artificial limb
Bandages
Chiropractic Care
Contact Lenses/solution
Deductible Expenses
Dental Treatment, including Orthodontia
Eye Exams/Glasses
Fertility services
Hearing Aids
Hospital and Emergency Room services
Insurance Premiums, including COBRA and Medicare
Laboratory fees
Long Term Care premiums
Nursing Home
Office visits
Physical Therapy
Pregnancy Test Kit
Prescription Drugs
Psychiatric Care
Smoking Cessation Programs
Weight loss programs (prescribed for illness)
Wig

18. More Examples

19. EXAMPLE A
2017
Based on Example 1, employee contributes $50 per pay period into HSA ($1,200 annually)
Only preventive care was obtained in 2017, so $0 out of pocket expense
Balance in your HSA account on 12/31/17 is $2,400 (KSD contributed $1,200 and the employee contributed $1,200)
2018
Based on Example 2, employee contributes $50 per pay period into HSA ($1,200 annually)
Employee has sick visit, ER visit and script totaling $573
You use your HSA card to pay the $573
No other claims in 2018
Out of pocket expense for employee is $0
Balance in your HSA account on 12/31/18 is $4,227 (KSD contributed $1,200 and the employee contributed $1,200 for 2 years less $573 bills)

20. EXAMPLE B
2017
Based on Example 4, employee contributes $ per pay period into HSA (from premium savings, funded at the IRS max)
Only preventive care was obtained in 2017, so $0 out of pocket expense
Balance in your HSA account on 12/31/17 is $6,750 (KSD contributed $1,200 and the employee contributed $5,550)
2018
Based on Example 6, employee contributes $ per pay period into HSA (from premium savings, funded at the IRS max)
Employee/Family has sick visit, ER visit, Hospital stay, Out-patient surgery and script totaling $5,500
You use your HSA card to pay the deductible plus co-pay totaling $5,500
Only preventative care was obtained for 2018
Balance in your HSA account on 12/31/18 is $8,000 (KSD contributed $1,200 and the employee contributed $5,550 for 2 years less $5,500 bills)

21. EXAMPLE C
2017
Based on Example 1, employee contributes $89.59 per pay period into HSA –funded at the IRS maximum
Only preventive care was obtained in 2017, so $0 out-of- pocket expense
Balance in your HSA account on 12/31/17 is $3,350 (KSD contributed $1,200 and the employee contributed $2,150)
2018
Based on Example 1, employee contributes $89.59 per pay period into HSA –funded at the IRS maximum
Only preventive care was obtained 2018, so $0 out-of- pocket expense
Balance in your HSA account on 12/31/18 is $6,700 (KSD contributed $1,200 and the employee contributed $2,150, for 2 years)

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