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Hsa Presentation 2010 For Bni

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Sterling Savings Bank

Sterling Savings Bank

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Hsa Presentation 2010 For Bni Hsa Presentation 2010 For Bni Presentation Transcript

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  • Health Savings Accounts 2010 UPDATES
    • What is a Health Savings Account (HSA)*?
      • An account that lets you save and pay for medical expenses using money that’s tax-deductible. Used for qualified medical expenses, the money also stays tax free when it’s withdrawn.
  • HSA 2010 UPDATES ELIGIBILITY
    • Eligibility
      • Must be enrolled in a qualified high-deductible health plan (HDHP) on the first day of the month that the HSA is opened
      • Cannot be covered by another healthcare plan (with certain exceptions)
      • Cannot be enrolled in or eligible for Medicare or receiving Veterans Administration benefits
      • Cannot be claimed as a dependent on someone else’s tax return
  • HSA 2010 UPDATES ROLLOVERS
    • Rollovers from health FSAs and HRAs allowed into HSA’s (through 2011)
      • Employers can transfer funds from Flexible Spending Arrangements (FSA’s) or Health Reimbursement Arrangements (HRA’s) to an HSA for employees switching to coverage under an HSA compatible plan.
      • Maximum contribution is the balance in the FSA or HRA as of September 21, 2006 or the balance on the date of transfer (if less)
  • HSA 2010 UPDATES ROLLOVERS
      • (Continued from previous slide)
      • Limited to one distribution per FSA/HRA account per individual
      • IMPORTANT: If the individual transferring funds becomes ineligible (ex. individual changes or drops eligible plan ) for the 12 months following the month of transfer, the transferred amount is included in stated income and subject to a 10% additional tax. Always recommend that the customer “consult their tax advisor” when communicating this information.
  • HSA 2010 UPDATES CONTRIBUTIONS
    • Increase in annual HSA contribution
      • For 2010, the maximum contribution for an eligible individual with self-only coverage for those under the age of 55 is $3,050. This is an increase from $3,000 last year.
      • Maximum for eligible individual with family coverage for those under the age of 55 is $6,150. This is an increase from $5,950 last year.
  • HSA 2010 UPDATES CONTRIBUTIONS
    • (Continued from previous slide)
    • Example: If an individual becomes eligible in July, they can still contribute as if they were eligible from January 1 st . This increases the $ amount they can save .
    • Individuals are now eligible to contribute the maximum HSA contribution for the calendar year no matter what month they become eligible. ( Previous rule was a pro-rated amount.)
  • HSA 2010 UPDATES CONTRIBUTIONS
    • (Continued from previous slide)
    • If the individual does not remain in the eligible plan through December of the following year, the amount contributed for the months previous to becoming eligible will be included in income and subject to a 10% additional tax. Always recommend that the customer “consult their tax advisor” when communicating this information.
  • HSA 2010 UPDATES ONE TIME TRANSFER FROM IRA to HSA
    • New rules allow for a one-time contribution of amounts distributed from an IRA. The contribution must be made in a direct trustee-to-trustee transfer.
    • The transfer will not be included in income or subject to the early withdrawal additional tax.
    • Amount is limited to the maximum HSA contribution for the year and the amount contributed is not allowed as a deduction.
    • Individuals must maintain plan eligibility for 12 months following the month of the contribution or be subject to a 10% additional tax. Always recommend that the customer “consult their tax advisor” when communicating this information.