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spend on future health care expenses.
HOW THE HEALTH SAVINGS
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withdrawn tax-free to pay for eligible current and $1000.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
www.irs.gov/pub/irs-pdf/p502.pdf ). 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
HOW THE HEALTH SAVINGS ACCOUNT
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
TAX REPORTING
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
