spend on future health care expenses.
     ACCOUNT WORKS (HSA)                                CONTRIBUTIONS
                                                        You can contribute to an HSA pre-tax through
                                                        payroll deduction.      Your maximum HSA
Enrollment in Medical Plan A qualifies you to           contribution depends on the level of medical
enroll in a health savings account, commonly            coverage you elect. For 2009 the maximum is
referred to as an “HSA”. You can make tax-free          $3000 for single coverage and $5950 for family
contributions to the HSA, similar to an individual      coverage. If you’re age 55 or older in 2009 you
retirement account, except that the balance can be      may make an additional “catch-up” contribution of
withdrawn tax-free to pay for eligible current and      $1000.
future health care expenses. Unused funds roll over
from year to year (there is no “use-it-or-lose-it”      Employer contributions count towards the annual
provision) and the account balance remains with         maximum. Hamline employees who choose single
you if you leave the organization or retire.            coverage under Plan A: Low Premium, Health
                                                        Saving Account (HSA) automatically receive a
You’re eligible to contribute money to an HSA if        $40/month HSA contribution ($480 annualized)
you meet all of the following requirements:             from Hamline, which means the employee is able to
                                                        contribute up to an additional $2520 to the HSA (or
•   You’ve selected Plan A as your medical              $3520 if age 55 or older in 2009) to reach the
    insurance plan option, and, and you’re not          annual maximum.          (Employees who choose
    covered by any other health plan that does not      single+one or family coverage receive the employer
    meet the federal requirements of an HSA             contribution in the form of a reduced monthly
    medical plan option..                               premium, and have the option to contribute
•   You’re not currently enrolled in Medicare or        premium savings to the HSA account, as an
    TRICARE.                                            employee contribution.)

•   You have not received medical benefits through
    the Department of Veterans Affairs during the       HOW THE HEALTH SAVINGS ACCOUNT
    preceding three months.                             (HSA) WORKS (continued)
•   You cannot be claimed as a dependent on
    someone else’s tax return.
                                                        HSA contributions are not subject to the same
You can use your HSA money to:                          “Change in Family Status” rules as the flex
                                                        spending account, so you can change your HSA
•   Pay for qualified medical, dental, vision and       contribution amount during the year, on a monthly
    certain over-the-counter drug expenses, as          basis. Complete a new benefit Election/Waiver
    defined in IRS Section 502 (available online at     form and return to the Human Resources ).                 department.

•   Pay for COBRA, Medicare or long-term care           YOUR RESPONSIBILITIES
    insurance premiums, as well as for medical
                                                        As the HSA accountholder, you are responsible for
    premiums during periods of unemployment.
                                                        ensuring that distributions are used for qualified
•   Supplement your income, but money withdrawn         medical expenses. Records of medical expenses
    and used towards something other than a             should be maintained as evidence that distributions
    qualified medical expense is taxable and, if        have been made for these purposes. Qualified
    you’re under age 65, subject to a 10% penalty.      medical expenses may only be reimbursed, tax-
                                                        free, if the expenses are incurred after the date
•   Build a nest egg by saving your HSA dollars for
                                                        your HSA account was established.
    the future. Your HSA balance rolls over from
    year to year, and can be invested so that it will   You’re also responsible for ensuring that your
    grow over time, giving you more dollars to          annual HSA contributions do not exceed IRS limits.

HDHP/HSA Summary Sheet Page 1 of 2
                                                         US BANK – ACCOUNT ADMINISTRATION
                                                         Hamline has chosen US Bank to handle its HSA
(HSA) WORKS (continued)
                                                         administration services.     After you elect to
                                                         contribute to the HSA, an account will be opened
                                                         for you, and contributions made through payroll
                                                         deduction. Contributions will be deposited to your
                                                         account at the end of each month. US Bank will
Tax reporting is required for the HSA. IRS form          send you a Welcome Kit that contains complete
8889 must be completed with your tax return each         information about how to activate and use your
year to report total deposits and withdrawals from       HSA. To activate the account, you’ll need to sign
your account (you do not have to itemize to              an account agreement, either electronically or by
complete this form).                                     returning a paper form to US Bank.

COORDINATING   WITH                  THE       FLEX
SPENDING ACCOUNT                                         Account services include:
                                                         •   Use of debit card to pay for qualified medical
Be aware that your use of the flex spending account
                                                             expenses, where the money comes directly out
option will be limited to dental and vision expenses.
                                                             of your account when used; second card
Although you can submit vision and dental
                                                             available for no additional fee;
expenses to your HSA for reimbursement, you may
choose to maximize your tax benefits by using the        •   Use of checks to pay for qualified medical
flex account for vision and dental. Spouses covered          expenses; first box of checks free;
under Hamline’s Plan A medical plan option, would
not be eligible to enroll in their employer’s medical    •   Online access to view balance, transaction
flex spending account while covered by Hamline’s             history and other account details;
plan, unless their employer offers a “limited use        •   Electronic monthly statements;             paper
flex plan” for dental and vision only.                       statements available for a fee;
                                                         •   Year-end tax reporting information mailed to
DOMESTIC PARTNER COVERAGE                                    your home;

If you cover a domestic partner under the Plan A         •   Customer Service support available Monday
medical plan option, remember that the HSA (a                through Friday, 8am to 7pm Central Time.
separate entity from the medical plan) is a tax              Contact the Health Savings Solution Center at
advantaged account. This means that under federal            877-HSA-6789 (877-472-6789).
rules it can only be used for family members who
are tax dependents, or a spouse. Partners are            If your average monthly balance is less than $2500,
eligible to open their own, separate HSA account at      a monthly maintenance fee of $3.25 will be
the financial institution of their choice, and fund it   charged to your account. Other fees may apply,
to the maximum allowed, which is driven by the           such as overdraft or account termination fees. The
level of coverage.                                       balance of your HSA will initially be invested in an
                                                         FDIC-insured, interest bearing deposit account with
                                                         US Bank. Interest rates:
                                                         $0-1999.99              0.75%
                                                         $2000-$4999.99          1.10%
                                                         $5000-$14,999           1.50%
                                                         $15,000+                4.00%

                                                         When your account balance exceeds $2500, you
                                                         will also have the option to invest dollars over that
                                                         amount into the mutual fund options, with no
                                                         additional fee.

HDHP/HSA Summary Sheet Page 2 of 2

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