RIGHT for YOU???
HSAs were authorized under the
Medicare Reform Act of 2003 and
were made available to consumers,
beginning in 2005.
Although HSAs offer major
"premium" savings, they're NOT for
everyone - especially those who
prefer a medical plan with low
Deductibles ($1,500 or less), and
expect their plan to cover most of
the costs for Routine Wellness Care,
Diagnostic, Prescriptions, etc.
HSAs were designed and are best
suited for the cost-conscious
healthcare consumer who prefers to
utilize every opportunity to assume
control, management and
responsibility for their healthcare
expenses by taking full advantage of
professional healthcare advocacy
services offered by their insurance
carrier and the 100% tax-deductibility
for all out-of-pocket (OOP) medical
expenses.
HSAs are "coming of age" in today's
consumer-driven healthcare market
primarily because 30-50% of your
premium dollars remain in your HSA
account for low-end expenses, while
your insurance company assumes
100% of the responsibility for large
($3,000-$5,000 or higher) expenses,
depending on selected deductible.
Unlike the waning Medical Savings
Accounts popularized in the '90s that
were essentially a "use it or lose it"
proposition, unused calendar year
HSA deposits roll over to the next
calendar year, etc., etc.
Any funds remaining in the HSA
at retirement can supplement your
retirement income, as an annuity.
You are probably NOT
a candidate for an HSA if:
1. your ANNUAL OOP expenses
(including wellness care, dental,
optical, prescriptions, total
less than $1,500.
(While some consumers have the financial
means to utilize additional Wellness and
Preventive Care (such as health screenings),
annual physicals, dental & vision, for some
reason they choose not to - even though a
100% tax deduction can be declared)
OR,
2. you have little or no interest in
assisting your insurance carrier with
"cost accountability" measures by
your healthcare providers, as the
Advocacy Program is an integral
"cost-control" benefit of
most HSA programs.
Your CPA may, or may not
recommend consideration of an HSA.
If so, your medical expense records
should clearly validate the
recommend. More and more CPAs
are getting licensed to write
insurance products that offer them.
Hopefully, no question regarding a
conflict of interest will arise.
Q. What is an HSA?
A. An HSA is a tax-favored, interest-bearing savings account which allows funds to be accumulated to pay for
your current and future qualified health care expenses. It helps you save money tax free, which lowers your
premium costs.
Q, How much can be contributed to an HSA?
A. As of January 1, 2006, the maximum contribution for a single person is either $2,700 or an amount equal to
the insurance plan deductible — whichever is less. The maximum contribution for a family is either $5,450 or
an amount equal to the insurance plan deductible — whichever is less. The minimum is $1,500.
For persons over 55, there is a $600/yr. "Catch-Up" option.
Q. What happens to the HSA balance at the end of the year?
A. Unspent HSA funds roll over each year and belong to you. There is no "use it or lose it" provision with
HSAs. These funds can continue to be used for qualified medical expenses, along with any new contributions.
Q, What can I do with the funds if they are never used?
A. At age 65, the unused funds may be rolled over into an IRA, used to pay your healthcare supplement
premiums or other out-of-pocket medical expenses.
How To Use an HSA Account
A free HSA Visa® Debit Card can be issued to conveniently pay for prescription drugs at point of service and
for other medical expenses not discounted by the network.
- Pay for prescriptions and other medical expenses
- Is valid wherever Visa debit cards are accepted
- Claim forms are not needed
- No transaction fees
- Monthly account statements outlining contributions and disbursements
Visa Debit Card Q & A
Q. What can I purchase with my card?
A. Use your Health Savings Account Visa debit card to pay for qualified medical expenses. It should only be
used at health-related locations.
Q. What happens if my healthcare provider does not accept Visa debit cards?
A. Your HSA Administrator may also provide you with a checkbook for another convenient way to pay
providers.
Q. What are qualified medical expenses?
A. Typical expenses include:
• Insurance deductibles, co-pays, and other eligible expenses not covered by insurance
• Hospital charges
• Prescription drugs
• Medical supplies
• Over-the-counter drugs
• Eyeglasses, contact lenses, solutions and eye surgery
• Vitamins, dietary supplements, weight loss drugs if approved by your doctor
• Dental services, orthodontics and psychologist's fees
• Smoking cessation programs and related over-the-counter drugs
Q. Can I use my card to buy healthcare related items from Internet merchants?
A. Yes, as long as your purchases are for qualified healthcare expenses.
Q. Is this card like other Visa debit cards?
A. No, the HSA Visa debit card should only be used for qualified healthcare expenses. There is no cash
access. This card can only be used at specific healthcare-related merchants that accept Visa debit cards.
Q. What if my card doesn't work at the point of sale, or the cashier tells me my
transaction has been declined?
A. You may be required to pay with another form of payment. The decline could be due to any of the following
reasons:
1. Your purchase wasn't considered a qualified medical expense under your health savings account plan.
2. Your purchase has non-qualified items, remove these items, then try your purchase again with only
qualified items.
3. Your Health Savings Account balance was too low to cover the transaction.
Q. What if I don't have enough funds in my Health Savings Account to cover the
qualified medical purchases I want to make?
A. Your transaction will be denied if there are insufficient funds in your account. You can either use a different
payment method and submit a claim for reimbursement, or tell the cashier how much you want to pay for part
of the transaction with the funds remaining in your account, and pay for the balance using a different payment
method.
Q. Can I withdraw cash from an ATM with my Health Savings Account Visa debit card?
A. No. The card should only be used for qualified healthcare medical expenses. You cannot access cash with
this card from an ATM or get cash back from a merchant.
Q. When asked by a merchant or directed by a point of sale system to choose a payment
method, should I select "Debit" or "Credit"?
A. When making a purchase using a keypad or screen, select "Credit". The card does not have a PIN, and you
must sign for the transaction. If there's no keypad or screen, give the card to the merchant. When asked if you
want to make a credit or debit purchase, say "Credit". No PIN number is required.
Q. Do I need to save my itemized receipts?
A. Yes, it is always a good idea to save your receipts for tax purposes.
DO YOU HAVE A QUESTION ABOUT HSAs? EMAIL US.
