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2019 Open Enrollment “Best Value” Plans with Tax Advantaged Health Savings Account (HSA). November 13, 2018. Facts about the “ Best Value ” HDHP Plan & HSA. These plans provide a great opportunity for you to save money … Contributions are much lower – same Direct and Select networks.
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2019 Open Enrollment “Best Value” Plans with Tax Advantaged Health Savings Account (HSA) November 13, 2018
Facts about the “Best Value” HDHP Plan & HSA • These plans provide a great opportunity for you to save money… • Contributions are much lower – same Direct and Select networks. • Fallon “Best Value” HDHP is paired with a Fidelity Health Savings Account (HSA). • A great option for participants looking to maximize tax advantaged savings . • It’s your account – goes with you when you leave or change plans (portable). • Any remaining balance carries over to next year;no “Use it or Lose it”. • Can provide additional benefits in retirement; save and invest for the future! Refer to My 2019 Benefit Guide page 11 for additional details. 2
Unique Triple Tax Advantages of an HSA • Contributions are tax-free (federal and state). • Funds in an HSA grow tax-free. • Monies used for qualified health care expenses are taken out tax-free.
2019 Medical Plan Summary – Fallon Health 1Individual Embedded Deductible: An individual in a family will not pay more than $2,700 in deductible. This is a brief summary of benefits. If there are any discrepancies between this and the Fallon certificate, the Fallon certificate will always take precedence. 4
Health Savings Account - Contributions • Maximum contribution limits in 2019 • $3,500 individual / $7,000 family (all tiers) • Catch up contribution of $1,000 permitted for those age 55+. • Annual maximum includes the College and employee contributions. • College contributes $500 for single individuals and $1,000 for families (all tiers) each year in January. • Flexibility- You may start, stop, increase or decrease your voluntary contributions at any time during the year. • Must re-elect your voluntary contribution each calendar year.
Health Savings Account – Who is Eligible? IMPORTANT! • Your responsibility to determine if you are eligible to open an HSA. • You must be enrolled in a “Best Value” Fallon High Deductible plan: • You cannotbe covered by other health plan (i.e. Spouse) that is not HDHP • You cannotbe enrolled in Medicare (note: your spouse may be enrolled in Medicare) • You cannotbe claimed as a dependent on someone else’s tax return • Neither you or your spouse can be enrolled in a Flexible Spending Account • Your covered dependents must be considered dependents under IRS rules in order for their claims to be eligible for reimbursement from your HSA • You cannot have a balance in your Flexible Spending Account.
Health Savings Account - Other Considerations • HSA survives a change in health plans or employers. • You cannot contribute new money into HSA if not enrolled in a HDHP. • Continue to withdraw from your HSA account even if your new plan is not a qualified (HDHP) . • Consider paying for medical expenses out of pocket now and reimburse yourself later from HSA. • Keep receipts! No substantiation required - may need to prove to IRS that distribution from HSA was for qualified medical expenses.
Health Savings Account – A Retirement Account Can and should be viewed as a retirement account. • All money in the HSA is yours! • Funds can be invested - determine how much cash you need in your account to pay for expenses – invest the rest! • All monies including investment gains are not taxed as long as the money is used to pay for qualified health expenses. • You can access your funds for any reason after age 65. • If used for qualified health expenses (No tax) • If used for any other expenses (Taxed as ordinary income) *If expenses are used before age 65, taxed as ordinary income plus 20% penalty
Health Savings Account – Eligible Expenses • Expenses incurred on or after the date the HSA was established are eligible. • Qualified expenses include any medical, dental or vision care expense allowed in IRS Publication 502 – as long as it is not an itemized tax deduction on your tax return. • A HSA can be used to pay COBRA premiums • Medicare Part B and/or Part D premium payment as well as Medicare Advantage plan premiums once you are age 65 or older.
HSA Accounts and Your Taxes • HSA Administrator (Fidelity) will report all distributions annually to participants (Form 1099 SA). • Account holders must file Form 8889as part of their annual tax return; this reports the amount of distributions used for qualified health expenses.