1. University of St. Thomas 2015 Health Savings Account and High Deductible Health Plan Education Take Charge Your Health, Your Money And Your Future 1

2. Health Savings Account (HSA) Basics 2

3. What Is An HSA? It is a funding program that must be combined with a medical high deductible health insurance plan 100% coverage for preventive care All other services (including office visits and prescription drugs) are subject to the plan’s deductible Allows you to put money aside to pay for eligible medical care expenses tax-free You can roll over unused dollars into the next year – there is no “use it or lose it” provision You retain control and you make choices about how to spend your health care dollars 3

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5. Who Is Eligible for a Health Savings Account? Participants in a qualified high-deductible health plan (HDHP) Must not be enrolled in Medicare Must not be covered by other medical insurance Must not have received VA medical benefits at any time in the past three months You and your spouse can not be contributing to/participating in a general-purpose FSA (healthcare reimbursement account) If you are currently participating in UST’s flexible spending account for 2014, you need to have a $0 balance in that account on 12/31/14 or you will not be eligible to contribute to an HSA account until 4/1/15 (IRS rule) 5

6. How Much Can You Contribute? For 2015, the federal government has established the following employee maximum contributions: Single: $3,350 Family:$6,650 Annual maximum limits tied to cost of living adjustments Catch-up contributions available for individuals over 55 and older ($1,000) Contributions maximums are subject to the number of months that you are eligible to make HSA contributions. If you lose HSA eligibility, certain tax ramifications may apply to the amount you have over-contributed. 6

7. Eligible Expenses Most out-of-pocket health care expenses: Deductibles Eyeglasses and contacts Out-of-pocket dental expenses Prescription costs The incurred date of the expense must be after the Health Savings Account has been established and funded It is important to maintain all receipts for distributions you take from your HSA. You are responsible for proving to the IRS that you used your HSA funds for eligible expenses. 7

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9. How are contributions made to an HSA? Employees can make pre-tax contributions through regular payroll deductions Employees can make direct contributions on an after-tax basis Employees can make a one-time transfer to their HSA from an IRA (no greater than the annual contribution allowed) Employees can send in contributions throughout the year and up until April 15 th of the following year 9

10. How are contributions accounted for at tax time? If contributions are made through payroll deductions, contributions are excluded from gross income If contributions are via a direct submission, employee will be able to deduct this from taxes – even if employee does not itemize Employee will receive forms 5498 and 1099 from Alliance Benefit Group to support contributions and withdrawals and to aid in tax preparation. Form 8889 is required to be filed 10

11. HSA Advantage: Long-Term Savings Save for future medical needs Earnings on an HSA are tax-free Your unused balance rolls over from year to year HSA Advantage: Tax Savings Tax-Free Contributions: Deductions from your pay can be made on a pre-tax basis Tax-Free Earnings: At a nominal interest rate for as long as the money stays in your HSA Tax-Free Withdrawals for qualified healthcare expenses 11

12. HSA Advantage: Ownership You control how you spend the money in your account Use it for eligible expenses today Save it for the future You can change health care coverage in the future and still keep the money in your account If you enroll in a different plan at UST in the future, or move to another employer, you can always continue to spend down the amount that is in your HSA on any qualified medical expense As a consumer, you become actively involved in the entire healthcare process 12

13. Non-Qualified Withdrawals Under age 65 Ordinary income tax plus a 20% penalty Over age 65 Subject to income tax, but likely at a lower rate 20% penalty does NOT apply 13

14. In-NetworkOut of Network Deductible (Per Calendar Year) $2,600 Individual; $5,200 Family $2,600 Individual; $5,200 Family Out-of-Pocket Limit (Per Calendar Year) $2,600 Individual; $5,200 Family $3,400 Individual $6,800 Family Preventive Care Well child care, preventive medical evaluations Immunizations and vaccines Cancer screenings Prenatal care Well woman coverage as mandated by HC Reform Preventive hearing and vision exams 100%70% after deductible All Other Services Office visit, urgent care, chiropractic, physical therapy Inpatient and outpatient hospital and emergency room Lab, x-ray, MRI Prescription drugs, etc. 100% after deductible 70% after deductible High Deductible Health Plan Benefits All benefits displayed are a summary only. If there is a discrepancy between this summary and the contract, the contract shall prevail. Out-of-network subject to accepted fee for in-network charges. 14

15. Cost of the HDHP Plan $2600/$5200 Deductible Plan - HDHP Total Monthly Cost UST Monthly Subsidy Your Monthly Cost Your Bi-Weekly Cost Employee Only$ 571.28$ 471.06$ 100.22$ 50.11 Employee +Spouse$1,028.26$ 741.88$ 286.38$ 143.19 Employee + Child(ren)$ 942.56$ 680.08$ 262.48$ 131.24 Family$1,485.25$1,071.62$ 413.64$ 206.82 15

16. 2014 and 2015 Medical Plan Rate Comparison $500/$1000 Deductible + Copay Plan 2015 Bi-Weekly Cost 2014 Bi-Weekly Cost Employee Cost Difference 2015 UST Bi-Weekly Cost 2014 UST Bi-Weekly Cost UST Cost Difference Employee Only$86.86$83.37$3.49$235.53$212.81$22.72 Employee +Spouse$209.34$197.94$11.40$370.94$335.16$35.78 Employee + Child(ren)$191.89$181.44$10.45$340.04$307.24$32.80 Family$302.37$285.91$16.46$535.81$484.13$51.68 $1250/$2500 Deductible Plan 2015 Bi-Weekly Cost 2014 Bi-Weekly Cost Employee Cost Difference 2015 UST Bi-Weekly Cost 2014 UST Bi-Weekly Cost UST Cost Difference Employee Only$57.53$53.15$4.38$235.53$212.81$22.72 Employee +Spouse$156.53$143.65$12.88$370.94$335.16$35.78 Employee + Child(ren)$143.48$131.67$11.81$340.04$307.24$32.80 Family$226.10$207.49$18.61$535.81$484.13$51.68 2014: $2500/$5000 Deductible Plan - HDHP 2015: $2600/$5200 Deductible Plan - HDHP 2015 Bi-Weekly Cost 2014 Bi-Weekly Cost Employee Cost Difference 2015 UST Bi-Weekly Cost 2014 UST Bi-Weekly Cost UST Cost Difference Employee Only$50.11$45.01$5.10$235.53$212.81$22.72 Employee +Spouse$143.19$128.89$14.30$370.94$335.16$35.78 Employee + Child(ren)$131.24$118.15$13.09$340.04$307.24$32.80 Family$206.82$186.18$20.64$535.81$484.13$51.68 16

17. Questions? Thank You! 17