1. ESB-727-0312

2. What is an HSA? Health Savings Account Retirement Accounts Checking Account Savings Account

3. ESB-727-0312 What is an HSA? Individually owned savings account Contributions, distributions, interest earnings – tax free No maximum on amount that can be accumulated Pay for qualified medical expenses for spouse & tax* dependents. (Tax dependents as defined by the IRS.) Portable

4. ESB-727-0312 Tax Free – Qualified Distributions “Qualified medical expenses” spouse & tax dependant children (even if not covered under HDHP)  Deductible  Co-insurance/Co-pay  Over the counter drugs (Over-the-counter medication and drugs will only be eligible if prescribed by a physician, without regard to whether the drug or medication is available without a prescription)  Dental Expenses  Vision Expenses

5. ESB-727-0312 “ Other qualified medical expenses”  Health plan coverage while receiving federal or state unemployment benefits.  COBRA continuation coverage.  Medicare premiums: Part A, B, C & D  LTC premiums (portion of)  Individuals are responsible for keeping supporting documentation as with any other tax deductions. Tax Free – Qualified Distributions

6. ESB-727-0312 Tax Free - Distributions Even if account holders have not saved enough in HSA to pay for an expense, can always withdraw funds later There is no deadline on reimbursements as long as expenses were incurred after HSA effective date There is no requirement to use HSA funds for all expenses It carries over through the years!

7. ESB-727-0312 Maximum Contribution Per Tax Year Contribution Limits Coverage2013 Individual$3,250 Family$6,450 Maximums indexed annually by Treasury Department $1,000 Additional Contribution if you are age 55 and older!

8. ESB-727-0312 How Does An HSA Work? Requirements to Contribute to an HSA: 1.Must have a qualified HDHP to contribute to an HSA 2.Cannot be enrolled in Medicare 3.Cannot be claimed as a tax dependent on anyone’s else’s tax return 4.Cannot have any other coverage that pays first dollar expenses below the deductible (Ex: GP-FSA through employer or spouse, HRA, access to an on-site clinic or Tribal clinic, Tri-Care or VA benefits)

9. ESB-727-0312 “Limited Purpose” Health FSAs &HSAs HSA Deductible Co-ins/Co-Pay Over-The-Counter “ Limited Purpose” Health FSA Vision Dental

10. ESB-727-0312 HSA vs. FSA Medical Reimbursement – FSA Account set up by employer Annual amount available first day of plan year No mid-year changes without a qualifying event Must use the annual amount within the plan year Receipts must be submitted and claims adjudication required Cannot accrue interest Subject to ERISA Unused FSA balances are forfeited HSA Tax-exempt trust/custodial account Funds must be deposited before using HSA contributions can be changed throughout the year ( IRS sets limits – indexed every year ) Balances roll year-to-year. No limit on accumulation. Account holder responsible for keeping receipts and determining eligibility Interest can be applied Not subject to ERISA unless employer takes action that triggers it. Account holder dies: Spouse becomes owner. Otherwise, beneficiary claims as income.

11. ESB-727-0312 HSA  Account balances above $2,500 Mutual funds investments available Minimum amount to move $50.00 AF Health Services Administration  Interest Rates BalanceRate $0.00 - $500.000.00% $501.00 - $2,500.000.10% $2,501.00 - $5,000.000.15% $5,000.00 - $10,000.000.70% $10,000.00+1.50%

12. ESB-727-0312 HSA AF Health Services Administration 2 Debit Cards Account Summary available 24/7. Account Statement mailed quarterly. Unlimited on-line withdrawal. Ability to upload your receipts to your account No overdraft fees Personalize customer service Some miscellaneous fees may apply

13. ESB-727-0312

14. American Fidelity HSAs

15. ESB-727-0312 American Fidelity HSAs ESB-662-0710

16. ESB-727-0312 American Fidelity HSAs Check your account frequently – keep information up-to-date.

17. ESB-727-0312 After enrollment  Welcome packet mailed 1-2 weeks prior to HSA effective date.  Debit card mailed within 1-2 days of HSA effective date. American Fidelity HSAs

18. ESB-727-0312 A debit card will be ordered Use it as a credit card Can only use at medical providers such as doctors, pharmacies, hospitals, etc. After Enrollment

19. ESB-727-0312 Learn more:  www.afhsa.com www.afhsa.com  www.irs.gov www.irs.gov  http://www.treas.gov/offices/public-affairs/hsa/ http://www.treas.gov/offices/public-affairs/hsa/ Contact us:  HSA-Support@af-group.com HSA-Support@af-group.com  405-523-5699  1-866-326-3600 American Fidelity HSAs

20. ESB-727-0312 Health Savings Accounts Thank You Neither Health Services Administration nor American Fidelity Assurance Company are providing tax advice. Individuals with an interest in HSAs should contact their tax advisor.