Consumer plan is a no-brainer for healthy individuals/families as you pay less for services you don’t really use, and preventatives are free on both plans.
HSA Basics and HSA Financial Strategies
HSA BASICS AND FINANCIAL STRATEGIESUnderstanding Health Savings Accounts (HSAs) andMaximizing their Financial Potential
Consumer Plan vs. PPO Plan Consumer Plan PPO Plan• Type: PPO network • Type: PPO network• Basic Concept: Lower • Basic Concept: Higher premiums with higher premiums with lower deductible deductible• Health Savings Account: • Flex Spending Account: Money not spent by the end of the calendar year Money MUST be spent by rolls over to the next year end of calendar year or and accumulates you lose it• Limited Flex Spending Account
HSA vs. FSA HSA – Health Savings Account FSA – Flex Spending Account• All money contributed pre-tax • All money contributed pre-tax• Available for use for IRS • Available for use for IRS qualified medical expenses qualified medical expenses• Contribution rate can be adjusted during year • Contribution rate fixed and• Can reimburse yourself later non-adjustable in year• Savings Tool: If you don’t • Fully funded day 1 spend the money during the • Spending Account Only: No calendar year, it rolls over to the next. savings function. Use it or• Can be used for medical lose it. expenses in retirement, including long term care premiums.
How Much Can You Contribute? 2013 Amway Max for Bi-Filing Status Weekly IRS Max. Base Employee Weekly Single $3250 $1250 $24 $48 Family $6450 $2000 $4450 $86 $171> 50 Catch up $1000 $1000 N/A N/A FSA $2500 N/A $2500 $48 $96 • Not required to contribute • Permitted to make HSA contribution rate changes during year
Notes: Combining HSA & Limited FSA inConsumer Plan• FSA is limited until plan deductible is met• Only need both if: • you know you will need more than IRS HSA limit, or • you want to maximize your HSA rollover/accumulation• Use for specific, planned expenses• Be conservative with funding your FSA
IRS Qualified Medical Expenses• Applies to both the HSA and FSA accounts• From Acupuncture to Chiropractor to Dental Treatments to Eye Exams/Glasses to Home Care• To Learn More, Google: • HSA Qualified Medical Expenses • IRS Publication 502 (starting on page 5) for a complete list from the IRS
HSA StrategiesHealth Savings Account • Save little • Take advantage of $2000 Amway contribution • Not required to contribute at all • Consider the difference in premiums as a minimumSave little
HSA StrategiesHealth Savings Account • Save little • Take advantage of $2000 Amway contribution • Not required to contribute at all • Consider the difference in premiums as a minimum • Save enough – enough to cover potential out-of-pocket costsSave little Save enough
How Much to Cover the Out-of-PocketMaximum?Filing Amway Employee Bi- OPM WeeklyStatus Base Total WeeklySingle $2500 $500 $10 $19 $2000Family $5000 $3000 $58 $115 Purpose To have enough pre-tax money to cover expenses until Consumer Plan pays 100%.
HSA StrategiesHealth Savings Account • Save little • Take advantage of $2000 Amway contribution • Not required to contribute at all • Consider the difference in premiums as a minimum • Save enough – enough to cover potential out-of-pocket costs • Save as much as possible – roll over and accumulateSave little Save enough Save AMAP
Which Bucket is Most Efficient for MedicalExpenses in Retirement? HSA Roth IRA / 401(k) NEVER TAXED 401(k) Principal taxed at time when used for qualifiedAll distributions taxed of contribution; growth medical expenses. is not taxed. MOST EFFICIENT
HSA Accumulation Strategy• Goal – Accumulate maximum you can by rolling over as much as possible each year.• Strategy • Fund HSA – Fully, if possible • Pay small expenses using taxed money, not the HSA. • Establish the maximum amount you are comfortable paying out of pocket instead of with HSA. Any expenses over that amount, use HSA.
Out-of-Pocket Max StrategyFiling Amway Employee Bi- OPM WeeklyStatus Base Total Weekly Single $2500 $500 $10 $19 $2000Family $5000 $3000 $58 $115HSA Accumulation Strategy IRS Amway Max for Bi-Filing Status Weekly Max. Base Employee Weekly Single $3250 $1250 $24 $48 Family $6450 $2000 $4450 $86 $171> 50 Catch up $1000 $1000 N/A N/A
HSA Accumulation StrategyThe HSA as longer-term investmentvehicle Max OOP• Multi-year strategy• Base • $2500 Base $2500
HSA Accumulation StrategyThe HSA as longer-term investmentvehicle Max OOP• Base • Remains at $2500• Tier 1 - Cash • Automatically refills Base Tier 1 • OPM account OPM Single $5000 • $2500 Single Family $7500 • $5000 Family Base $2500
HSA Accumulation StrategyThe HSA as longer-term investmentvehicle Single $5000• Base Tier Family $7500 • Remains at $2500 2• Tier 1 • Automatically refills Base • OPM account Tier 1 • $2500 Single OPM • $5000 Family Single $5000• Tier 2 Family $7500 • Conservative Investments Base $2500• Tier 3 & Beyond • Riskier investments
What We Have Learned• If you/family are healthy, the Consumer plan is a clear choice.• The Consumer Plan’s maximum out-of-pocket cap may save you money if you: • regularly take expensive non- preventive prescription drugs • have an unusual & expensive medical condition or need
Your Life – Your Plan• Transition to proactive consumer of medical services• How you fund and spend your HSA is specific to you and your family’s situation.• You can always adjust your contribution level during the year.• Our take: Take advantage of free money. Amway is being extremely generous with the $2000.
Unsure? BeManaged Can Help.• Nov. 12th – Dec. 10th – Free onsite and online consultations.• Online Tools Available: PlanAdviser helps determine which plan is most advantageous financially. Amway.bemanaged.com Online Tools > Estimate Medical Expenses• Prescriptions Questions? Connect with Express Scripts• Claims or Expense Questions? Connect with Encompass.
Schedule a Consultation Visit us - Amway.BeManaged.com Call us - (616) 871-0751 or (888) 738-8780
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