Limited Scope FSA

1. Limited Scope FSA • Purpose: A savings option that allows participants to preserve and build up the balance in their HSA while still receiving the pre tax benefit for eligible dental and vision expenses • Works like a Health Care FSA: pre-tax contributions, lose-it-or-lose-it, expenses must be incurred within plan year • Contribution limits are same as HC FSA • Claims go to ASI • No debit card with LS FSA • Grace Period available

2. Transferring HSA balance to US Bank • Existing HSA balances may be transferred to US Bank starting in January • The State will be communicating with current Plan C members regarding the transfer of their funds very soon • Balance transfer not mandatory • Contributions going to US Bank are mandatory • US Bank will be absorbing the cost of transferring funds (if applicable) as long as the transfer request is made before January 1st.

3. US Bank fees

4. US Bank • Why US Bank? • Current State banking partner • Efficiency of one bank • Offers many up-to-date HSA features and online options: www.mycdh.usbank.com • Free debit card for member and dependents

5. HSA Funds: Investments • $1,000 minimum HSA balance • Interest rates listed on previous Fee slide • Automatic transfers available between HSA and Investment account • Investment options: Mutual funds, Target Maturity and Asset Allocation funds • Earning are not taxable • No front-end load fees or transaction fees

6. Standard Fund Options • Six types of funds (Index, Growth Asset Allocation Value Money Market, etc.) • Companies: Fidelity and Nuveen • Complete list: Contact US Bank or visit their website: www.mycdh.usbank.com

7. Things to consider • Take the premium difference of Plans A/B and C and contribute to your HSA • Long term goal: Use HSA funds for medical expenses in retirement

8. Now you know what I know • Thank you for your participation!!! • Please contact me with questions: • Benefits@KDHEKS.gov or • ZROOD@KDHEKS.gov

9. QUESTIONS • Q: When presenting the Limited Scope FSA, are you saying dental and vision expenses CANNOT be paid from an HSA account? • A: NO, dental and vision expenses can be paid from an HSA account. • Q: Does each dependent get a debit card? • A: Yes, extra debit cards are available at no extra cost. • Q: If dental and vision can be paid via the HSA, why would anyone need a Limited Scope FSA? • A: A Limited Scope (LS) FSA is an option for individuals that want to build up their HSA balance. The LS FSA allows an individual to do that and still be able to pay for dental and vision expenses on a pre-tax basis. The HSA balance rolls over from year to year and the LS FSA is a use-it-or-lose-it account. • Q: Why is the state of Kansas making the HSA so attractive? • A: Health Savings Account (HSA) plans can help you take control of your health, your medical decisions, and your medical spending. An HSA can increase your health insurance buying power by: • Lowering your health insurance premium, but still providing quality coverage • Gaining more control of your health care dollars • Paying your out-of-pocket health care expenses with tax-advantaged savings • Spending your HSA savings tax-free to help pay your health insurance deductible or for qualified medical expenses including prescriptions, vision or dental care • Q: Will the employer’s contribution be the same each year, or is it just for this year and may be different each successive years? • A: The Health Care Commission reviews all of the plan designs each year and future contribution amounts have not been determined • Q: Can withdrawals for long term care premiums be set up for automatic withdrawals from the HSA account? • A: Yes, they are “recurring transactions” and they can be set up online.