Health Savings Accounts (HSAs)

1. This presentation will probably involve audience discussion, which will create action items. Use PowerPoint to keep track of these action items during your presentation • In Slide Show, click on the right mouse button • Select “Meeting Minder” • Select the “Action Items” tab • Type in action items as they come up • Click OK to dismiss this box • This will automatically create an Action Item slide at the end of your presentation with your points entered. Health Savings Accounts (HSAs)

2. Consumer Directed Plans • Develop Appreciation for Cost of Services • The Advantage is: • You are reducing your premium, and taking control of the rest • Flexibility • The Future of Healthcare is NOW! Support Services Alliance, Inc.

3. Main Objective of HSAs Reduce Fixed Premium Increase Possible Expense You only pay for services when you actually use the service! Support Services Alliance, Inc.

4. Definition • Deductible is the amount of money paid out of pocket before the insurance is used. Support Services Alliance, Inc.

5. Health Insurance XL2250H • Employee pays 100% of all medical expenses before the deductible • Policy pays 100% of all medical expenses after the deductible Unlimited $0 $2,250 Individual EE pays 100% Insurance pays 100% 2-Person Family $4,500 $0

6. Family Deductible HSA deductibles are aggregate • Aggregate deductible is twice the individual deductible, and must be met before charges are paid by the insurance carrier Individual DeductibleFamily Aggregate $2,250 $4,500 Support Services Alliance, Inc.

7. Health Insurance • Deductible covers • Physician’s visits & Services • Inpatient Hospital Services • Outpatient Hospital Services • Prescription Drugs • (*Detailed list on XL2250H brochure) • No Deductible required • Well child visits and routine immunizations for children up to age 19 Support Services Alliance, Inc.

8. Health Insurance Specifics • NO REFERRALS EVER • Underwritten by Univera Healthcare • Dependents covered until December 31st of the year they turn 23 Support Services Alliance, Inc.

9. Health Insurance • Freedom of Choice • In & Out of Network • Providers • WNY – Univera • CNY – Excellus BlueCross BlueShield • Outside NYS – Beech Street Network • Best way to find doctor/hospital • Smallbizgrowth.com • Then click “Find a Provider” Support Services Alliance, Inc.

10. 2 Separate Parts • High-deductible health insurance plans • Savings Account Support Services Alliance, Inc.

11. Tax Treatment of Contributions • Employer contributions • Contributions made by the Employer are NON-taxable to the employee • Employee contributions • May be an above the line deduction on form 1040 of federal income tax return or • Pre-tax deduction out of paycheck Support Services Alliance, Inc.

12. Accumulations • Interest earned in Savings account is tax-deferred • No maximum limit on account balance • NOT a “use it or lose it” account • Can always be used for out-of-pocket medical costs. • Account is 100% owned by the employee. • If the employee leaves their job, the account and the money in the account remains with the employee. Support Services Alliance, Inc.

13. Withdrawals • Withdrawals made for qualified medical expenses are tax free • Non-qualified expenses subject to 10% penalty plus taxes (penalty is waived for death or disability) • Non-qualified withdrawals for individuals age 65 and above are subject to income tax only • Accurate record keeping is employee’s responsibility • If audited, employee is responsible to prove withdrawals were qualified Support Services Alliance, Inc.

14. Claims • In-Network: You Pay a Reduced Rate • Doctors, hospitals, testing, etc. • Pharmacy • Claim Procedure • MD or Hospital – “Run the Claim” • Pharmacy – Use Debit Card or Check Support Services Alliance, Inc.

15. Office Visit • You go to the doctor and show your card but DON'T PAY ANY CO-PAY • Doctor sends claim to Univera • Univera tells the doctor the negotiated rate to charge the client • Doctor sends client the bill, Univera sends EOB to client • Client pays the doctor. • If there is money in the HSA you can use that money to pay the doctor. Support Services Alliance, Inc.

16. Prescription Drug • You go to the Pharmacy and show your Insurance card • If you haven’t reached your deductible you pay the full negotiated rate to the pharmacy • If there is money in the HSA you can use that money to pay the Pharmacy. Support Services Alliance, Inc.

17. How Will a HSA Save Me $$$ • Low Utilizing Person • Normal Utilizing Person • High Utilizing Person Support Services Alliance, Inc.

18. Low Utilizer • Example of Healthy Person Support Services Alliance, Inc.

19. Normal Utilizer • Example of Normal Person Support Services Alliance, Inc.

20. High Utilizer • Example of Very Ill Person 10 co-pay Avg. co-pay $25 Maxed out Support Services Alliance, Inc.

21. You May Use Funds For: • OTC Drugs • Dental • Vision • Portion of Long-Term Care Premiums • These Expenses WILL NOT Reduce Your Deductible • You Are Not Required to Use HSA Funds Support Services Alliance, Inc.

22. This presentation will probably involve audience discussion, which will create action items. Use PowerPoint to keep track of these action items during your presentation • In Slide Show, click on the right mouse button • Select “Meeting Minder” • Select the “Action Items” tab • Type in action items as they come up • Click OK to dismiss this box • This will automatically create an Action Item slide at the end of your presentation with your points entered.