Fortis HSA Plan

1. Fortis HSA Plan PO Box 22437Billings, MT 59104 1-800-333-0546 www.pibusa.com Professional Insurance Brokerage

2. Health Savings Account The Fortis Insurance Company Health Savings Account (HSA) is an excellent way to help fund medical expenses. The tax-favored treatment of HSAs was established under the 2003 Medicare legislation. The law authorizes both individuals and employers to use tax-advantaged HSAs in conjunction with high deductible health insurance plans.

3. Health Savings Account An HSA works like an IRA, except that money is used to pay health care costs. Participants enroll in a relatively inexpensive high deductible insurance plan. Then, a tax-deductible savings account may be opened to cover current and future medical expenses. The money deposited, as well as the earnings, is tax-deferred. The money can then be withdrawn to cover qualified medical expenses tax-free. Unused balances roll over from year to year.

4. Health Savings Account • How is the HSA Similar to IRAs? • Deposit funds into HSA • Accumulate Funds • Earn Tax-deferred interest • Income tax deduction

5. Health Savings Account • HSAs save 3 ways: • Premium savings • Income tax deductions • Tax-deferred earnings

6. Health Savings Account HSA contributions are 100% tax deductible 3.0% Interest $750 Minimum Balance (MSavers allows investing in stocks, etc.)

7. Contributions Fortis Health HSA Plan

8. Qualified Contributions Contributions can be made… • Monthly ($50 minimum) • Quarterly • Semi-Annual • Lump Sum ($500 Annual minimum) • Unscheduled Deposits

9. Qualified Contributions No Fees… • Administrative Fees • User Fees

10. Qualified Contributions • The Qualified Contributions Table indicates the maximum first year HSA contributions based on covered months and deductible. If you had prior qualifying coverage during the year, contributions are allowed for those months (Updated deductibles available 5-1-04) HSA Disclosure Statement You can find this Chart in your HSA Disclosure Statement, Form 28435

11. Eligibility Fortis Health HSA Plan

12. Eligibility Who can qualify? Everyone

13. Eligibility • You must either have an existing Fortis Insurance Company Individual Medical high deductible plan or be applying for one in conjunction with the Fortis Insurance Company HSA • You must not be covered by another health insurance plan (other than a plan providing certain limited types of coverage such as accident and scheduled benefit plans) To be eligible for an Individual Medical Fortis Insurance Company HSA

14. Eligibility • For 2004, a high deductible insurance plan is a health plan with a minimum deductible of $1,000 for self-only coverage and $2,000 for family coverage. The maximum out-of-pocket expenses for allowed costs must be no more than $5,000 for self-only and no more than $10,000 for family. What is a High Deductible insurance plan?

15. Eligible Expenses Fortis Health HSA Plan

16. Eligible Expenses • Withdraw anytime for eligible medical expenses. • Glasses • Dental • Deductibles and Co-insurance • RK or Laser Eye Surgery • LTC policy premiums

17. Non-Eligible Withdrawals Before Age 65 • Taxed as ordinary income • 10% penalty

18. Age 65 or Medicare Eligible Withdrawals • No penalty • Lower tax bracket

19. Eligible Expenses Withdrawal Methods • Automatic • Written approval

20. Eligible Expenses IRS Publication 502How to get it. • Call IRS 1-800-TAXFORM • Download from the web www.irs.gov

21. Tax Deductions Fortis Health HSA Plan

22. Tax Deductions* Contributions to an HSA are tax deductible up to certain limits. The deduction limit for individual coverage is the amount of the annual deductible under the health insurance plan or $2,600, whichever is lower. The deduction limit for family coverage is the amount of the annual deductible under the health insurance plan or $5,150, whichever is lower.

23. Tax Deductions The following deductibles are offered by Fortis Insurance Company to be written in conjunction with HSAs for Individuals:

24. Tax Deductions The following deductibles are offered by Fortis Insurance Company to be written in conjunction with HSAs for families:

25. Tax Deductions In addition, if you are age 55 or older, you may make an additional deductible contribution of up to $500 per person to your HSA.

26. HSA vs MSA Fortis Health HSA Plan

27. HSA vs MSA • HSAs are a significant expansion of the old MSA program. Unlike MSAs, HSAs provide the following: • Everyone with a qualified high deductible plan is eligible to participate (includes all size employers, the self-employed, individual and families who are not self-employed) • HSAs can be funded by the employer, employee or combination of both within the same calendar year • HSAs are permanent and portable • Larger tax-deferred contributions to custodial accounts • There are broader deductible ranges

28. The One Deductible Plan Fortis Health HSA Plan

29. One Deductible Plan Sell the Fortis One Deductible Plan to your HSA clients • All covered expenses, including prescription drugs, for all covered persons apply to one deductible. • Fights the rising cost of health care by leaving more money in your clients pocket.

30. Show Savings Fortis Health HSA Plan

31. Show Savings Tax Savingswww.irs.gov/forms_pubs/ This is the old MSA form, new HSA forms should be printed soon Form 8853

32. Show Savings Tax Savingswww.irs.gov/forms_pubs/ Form 1040 New tax forms will show HSAs here

33. Fortis Health HSA Plan Get More Information

34. Get More Information Call or e-mail your Agent Service Representative: 1-800-333-0546 • IndividualMichele Fox x 18 - michele@pibusa.comHeather Handlin x 12 - heather@pibusa.com • GroupBritton Deckard x 17 - britton@pibusa.com

35. Get More Information Join our e-mail list: • Professional Insurance Brokerage sends new product information and important updates by email. If you are not already receiving these email updates, send an email to:sales@pibusa.comand tell us you want to start receiving email updates.

36. Thank You PO Box 22437Billings, MT 59104 1-800-333-0546 www.pibusa.com Professional Insurance Brokerage