Easy-to-understand mechanics of an HSA.

1. 1
UNDERSTANDING HSAS
PREPARED BY:
MANNY MANSO, RHU, ChHC, CDHC
No one accepts liability for the content of this presentation, or for the consequences
of any actions taken on the basis of the information provided or any errors,
misstatements, nor does it not constitute legal or tax advice. Please consult tax
accountant for better clarification.
Make the right turn today…
…know where you’re headed tomorrow!

2. 2
SIMILARITIES BETWEEN HSA ANDTRADITIONAL IRA
SIMILARITIESTO 401K AS WELL
MYTH OR FACT?
HSA FAVORS…
THEWEALTHY - AFFLUENT INDIVIDUAL: (TAX SHELTER)
TAX ADVANTAGED SAVINGS UP TO $3,350 INDIVIDUAL OR $6,750 FAMILY WITH
ADDITIONAL $1,000 CATCH-UP CONTRIBUTIONS FOR ANYONE 55 OR OLDER
THE MIDDLE-INCOME OR HEALTHY INDIVIDUAL: (SAVINGSVEHICLE)
HSA AFFORDS AN OPPORTUNITY TO ACCUMULATE TAX-FREE FUNDS FOR
FUTURE HEALTH-CARE NEEDS
THE LOWER-INCOME INDIVIDUAL: (AFFORDABLE HEALTH CARE)
HSA LOWER PREMIUMS WILL ALLOW A FORM OF CATASTROPHIC COVERAGE TO
THOSETHAT HAD OPTED OUT ENTIRELY DUETO PRICE
THE HEALTHY
LITTLE OR NO CLAIMS
THE CHRONICALLY ILL
AFTER-TAX PAYMENT FOR CO-PAYS FROM RECURRENT DR. VISITS AND
PRESCRIPTIONS MAY EQUAL OR EXCEEDTHE DEDUCTIBLE AMOUNT
BUT ALSO

3. 3
WHAT IS A HEALTH SAVINGS ACCOUT (HSA)?
AN INDIVIDUAL CAN PARTICIPATE IN A QUALIFIED HIGH DEDUCTIBLE
HEALTH PLAN (HDHP), TAKE ADVANTAGE OF THE LOWER PREMIUMS AND
MAY OR MAY NOT OPEN A SEPARATE HEALTH SAVINGS ACCOUNT UNTIL A
LATER DATE
A HEALTH SAVINGS ACCOUNT (HSA) IS A TAX-ADVANTAGED FUNDING
VEHICLE AVAILABLE TO TAXPAYERS ENROLLED IN A QUALIFIED HIGH
DEDUCTIBLE HEALTH PLAN HEREINAFTER REFERRED TO A HDHP THAT
MEETSTHE STATUTORY IRS LIMITS AND REGULATIONS
INSURANCE
POLICYTHAT
PROVIDES
INSURANCE
PROTECTION
BANK
ACCOUNT FUND
TO USE FOR
QUALIFIED
HEALTHCARE AND
OTHER QUALIFIED
EXPENSES
+
UNCLE SAM ALLOWED THESE TAX-ADVANTAGED MEDICAL SAVINGS
ACOUNTS TO MAKE HIGHER DEDUCTIBLES PLANS MORE PALATABLE TO
CONSUMERS
2017/18 PLAN DESIGN GUIDELINES
SELF-ONLY DEDUCTIBLE:$1,300 (2018 FOR $1,350)
OTHERTHAN SELF-ONLY DEDUCTIBLE:$2,600 (2018 FOR $2,700)
SELF-ONLY MAX OUT-OF-POCKET:$6,550 (2018 FOR $6,650)
OTHERTHAN SELF-ONLY MAX OUT-OF-POCKET:$13,100 (2018 FOR $13,300)
NON-GRANDFATHERED SELF-FUNDED OR ANY GROUP
HEALTH PLAN MUST APPLY AN EMBEDDED SELF-ONLY
$7,150 MAXIMUM OUT-OF-POCKET TO EACH PERSON
ENROLLED IN FAMILY COVERAGE TO COMPLY WITH
ACA’S INDIVIDUAL OUT-OF-POCKET MAXIMUM
OTHERTHAN SELF-ONLY DEDUCTIBLEAND MAXIMUM
OUT-OF-POCKET IS MOST LIKELYANAGGREGATEDAMOUNT
EXAMPLE
$7,350 FOR 2018

4. 4
2017/18 MAXIMUM ANNUAL CONTRIBUTION LIMITS
SELF- ONLY
$3,400
OTHERTHAN SELF-ONLY
$6,750
PLUS
BOTH SPOUSES
OVER AGE 55
+
ONE FAMILY PLAN
$1,000 CONTRIBUTION
FAMILY MAX $7.750
TWO SEPARATE INDIVIDUAL
PLANS, $1,000 EACH
CONTRIBUTION MAX $8,750
ONE SPOUSE
OVER AGE 55
$1,000 CATCH-UP CONTRIBUTIONS FOR MEMBERS AGE 55 AND OVER
$3,450 FOR 2018 $6,900 FOR 2018
WHAT ARE EMPLOYEETHETAX ADVANTAGES?
HSA FUNDS BELONGTOTHE PARTICIPATING MEMBER
1. TAX-FREE CONTRIBUTIONS TOYOUR HSA 1
2. TAX-FREE DISTRIBUTIONS FROMYOUR HSA FOR
QUALIFIED MEDICAL EXPENSES & OTHER QUALIFIED
ITEMS
3. TAX-FREE / DEFERED EARNINGS FROM INTEREST &
INVESTMENTS 2 INYOUR HSA WITH NO CAPITAL
GAINSTAX
1 ACCOUNTHOLDERS SHOULD CONSULT ATAX ADVISOR
2 INVESTMENTS PRODUCTS ARE NOT FDIC INSURED HAVE NO GUARANTEE AND MAY LOSEVALUE
TRIPLETAX ADVANTAGE

5. 5
EXAMPLES OFTRIPLETAX ADVANTAGES
CONTRIBUTIONS ARETAX
DEDUCTIBLE AND GETS
ADDITIONALTAX FAVORED
TAXTREATMENT USING A
SEC 125 REDUCING FICA
TAXES AND DECREASING
THE NET COST
TAX-FREE DISTRIBUTIONS
SAVES EVEN MORE BY
PAYING CLAIMSWITH
BEFORE-TAX DEDUCTIONS
PLUS, EARNINGS GROW
TAX-FREE WITHOUT
CAPITAL GAINSTAX
* ACTUAL RESULTS WILLVARY
SAVERSVS. SPENDERS
WHAT ARETHE AFTER-TAX EARNINGS
REQUIREDTO MEET DESIRED SAVINGS RESULTS?
SAVERS
SPENDERS WHAT ARETHE AFTER-TAX DOLLARS
REQUIREDTO PAY BILLED SERVICES?
FIT 15% - FICA 7.655 = 22.65%

6. 6
PRE-TAX OR ABOVE-THE-LINE CONTRIBUTIONS?
LATER
MAXIMIZE SAVINGS WITH PAYROL REDUCTIONS
NOW
EMPLOYEE SAVINGS
TO SPEND $10.00
WOULD
YOU SAVE
$7.73
What can you buy
with these savings?
✓ Medical, Dental and
Vision Expenses for you
AND any tax
dependent, even if they
are not on your health
plan (age limits may
apply)
✓ Cobra and Medicare
Premiums - PLUS

7. 7
EMPLOYER PAYROLLTAX SAVINGS
✓ FICA - SOCIAL SECURITY RATE OF 6.2%, PLUS 1.45% FOR MEDICARE FOR
ATOTAL OF 7.65%
✓ SUTA - STATE UNEMPLOYMENT TAX AUTHORITY VARIES BY STATE AND
EACH EMPLOYER IS GIVEN A VARIABLE "EXPERIENCE" OR
"UNEMPLOYMENT INSURANCE" RATE, DEPENDING ON VARIOUS
FACTORS, INCLUDING WORKER RETENTION
✓ FUTA - FEDERAL UNEMPLOYMENT TAX ACT APPLIES TO THE FIRST
$7,000 OF GROSS EARNINGS OF EACH WORKER PERYEAR
✓ WC - WORKERS COMPENSATION INSURANCE RATES VARY BY STATE
AND REGION, AND AFFECTED BY EMPLOYEE CLASS, TYPE OF JOB AND
EMPLOYEE CLAIM EXPERIENCE
POTENTIAL EMPLOYERTAX SAVINGS
ENCOURAGE
EMPLOYEE PRE-TAX
CONTRIBUTIONSTO
HSA FUND
GREATER
PARTICIPATION
EQUALS
DECREASED
PAYROLL COSTS

8. 8
POTENTIAL EMPLOYERTAX SAVINGS FICA ONLY
ENCOURAGE
EMPLOYEE PRE-TAX
CONTRIBUTIONSTO
HSA FUND
GREATER
PARTICIPATION
EQUALS
DECREASED
PAYROLL COSTS
ANOTHER WAYTO SHOW EMPLOYER SAVINGS!
HSA FUNDS PAY FOR QUALIFIED
✓ MEDICAL EXPENSES FOR YOU AND ANY TAX DEPENDENT, EVEN IF
THEY ARE NOT ONYOUR HEALTH PLAN (AGE LIMITS MAY APPLY)
✓ DENTAL EXPENSES
✓ VISION EXPENSES
✓ COBRA PREMIUMS
✓ HEALTH INSURANCE PREMIUMS – WHILE
RECEIVING UNEMPLOYMENT COMPENSATION
✓ LONGTERM CARE PREMIUMS
✓ MEDICARE PREMIUMS – BUT NOT FOR SUPPLEMENT “MEDIGAP” PLANS
AND FUNDS CAN BE WITHDRAWN TAX-FREE, PENALTY-FREE
AT ANY TIME FOR OTHER USES AS LONG DISTRIBUTIONS ARE
JUSTIFIED WITH UNREIMBURSED RECEIPTS, GREAT FOR
RETIREMENT AND DISTRIBUTION DO NOT IMPACT MAGI!
FUNDS FROM AN IRA OR 401K MAY BE WITHDRAWN PENALTY
FREE AFTER A CERTAIN AGE, BUT THE WITHDRAWALS ARE
TAXABLE INCONE – HSAS ARE ALWAYS TAX FREE, PENALTY
FREE FOR QUALIFIED EXPENSES

9. 9
HSA CAN ALSO REIMBURSE FOR…
Reference:
WWW.HSASTORE.COM
ELIGIBILITY
✓ MUST BE COVERED UNDER A QUALIFIED HIGH-
DEDUCTIBLE HEALTH PLAN (HDHP)
✓ MUST NOT BE COVERED BY OTHER HEALTH
COVERAGE INCLUDING GENERAL PURPOSE FSA,
EXCEPT FOR OTHER “PERMITED INSURANCE”
✓ MUST NOT BE ENROLLED IN MEDICARE
✓ MUST NOT BE CLAIMED AS A DEPENDENT ON
ANOTHER PERSON’S TAX RETURN

10. 10
EXCEPTED BENEFITS
✓ INSURANCE THAT PROVIDES A FIXED AMOUNT PER
DAY (OR OTHER PERIOD) OF HOSPITALIZATION
(NOT “GAP” PLANS)
✓ SPECIFIED DISEASE OR ILLNESS
✓ CANCER INSURANCE
✓ ACCIDENTS
✓ DISABILITY
✓ DENTAL CARE
✓ VISION CARE
✓ LONG-TERM CARE
✓ LIMITED PURPOSE FSA
EXAMPLES OF PERMITED COVERAGE MAY INCLUDE:
COMPARABILITY OR SECTION 125?
✓ IN GENERAL, EMPLOYER MATCHING CONTRIBUTIONS WOULD
LIKELY VIOLATE COMPARABILITY TESTING (I.E., THEY MUST
MAKE COMPARABLE CONTRIBUTIONS FOR ALL ELIGIBLE
INDIVIDUALS WITH COMPARABLE COVERAGE DURING THE
SAME PERIOD)
✓ MATCHING CONTRIBUTIONS UNDER A SECTION 125 CAFETERIA
PLAN IS NOT SUBJECT TO COMPARABILITY TESTING AND
INSTEAD IS SUBJECTTO 125 NON-DISCRIMINATION RULES
✓ THERE IS AN EXCEPTION TO THE COMPARABILITY RULES THAT
ALLOWS EMPLOYERS TO MAKE LARGER CONTRIBUTIONS TO
THE HSAS OF NON-HIGHLY COMPENSATED EMPLOYEES
Prepared by: Manny Manso, RHU, ChHC, CDHC
NOT APPLICABLE FOR EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENT

11. 11
COMPARABILITY
ALL ELIGIBLE COMPARABLE PARTICIPATING EMPLOYEES
RECEIVE COMPARABLE EMPLOYER HSA CONTRIBUTIONS
Prepared by: Manny Manso, RHU, ChHC, CDHC
NOT APPLICABLE FOR EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENT
COMPARABILITY
PROMOTES
EQUALITY
IF EMPLOYER CONTRIBUTIONS DO NOT SATISFY THE
COMPARABILITY RULE DURING A CONTRACT PERIOD, THE
EMPLOYER IS SUBJECT TO AN EXCISE TAX EQUAL TO 35% OF THE
AGGREGATE AMOUNT CONTRIBUTED BY THE EMPLOYER TO
HSA'S FORTHAT PERIOD
MATCHING CONTRIBUTIONS
EMPLOYEE THAT CAN CONTRIBUTE MORE GETS MORE!
Prepared by: Manny Manso, RHU, ChHC, CDHC
NOT APPLICABLE FOR EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENT
HOWEVER,THIS MAY BE PERMISSIBLE IF CONTRIBUTIONS
ARE MADETHROUGH A CAFETERIA PLAN…
…BUT,THEY ARE SUBJECTTO SECTION 125 NON-DISCRIMINATION
RULES (ELIGIBILITY, CONTRIBUTIONS AND BENEFITTESTS
AND KEY EMPLOYEE CONCENTRATIONTESTS)

12. 12
COMPARABILITY
GENERALLY COMPARABLE CONTRIBUTIONS ARE:
Prepared by: Manny Manso, RHU, ChHC, CDHC
NOT APPLICABLE FOR EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENT
✓ THE SAME AMOUNT, OR
✓ THE SAME PERCENTAGE OFTHE ANNUAL DEDUCTIBLE
ADDITIONALLY
• EMPLOYEES WITH SELF-ONLY HDHP COVERAGE ARE TESTED SEPARATELY FROM
EMPLOYEES WITH FAMILY HDHP COVERAGE
• EMPLOYEES WITH DIFFERENT CATEGORIES OF FAMILY HDHP COVERAGE MAY BE
TESTED SEPARATELY
• AN EMPLOYER IS NOT REQUIRED TO CONTRIBUTE THE SAME AMOUNT OR THE
SAME PERCENTAGE OF THE DEDUCTIBLE FOR EMPLOYEES WHO ARE ELIGIBLE
INDIVIDUALS WITH ONE CATEGORY OF HDHP COVERAGE THAT IT
CONTRIBUTES FOR EMPLOYEES WHO ARE ELIGIBLE INDIVIDUALS WITH A
DIFFERENT CATEGORY OF HDHP COVERAGE
• THE CONTRIBUTION WITH RESPECT TO THE SELF PLUS TWO CATEGORY MAY
NOT BE LESS THAN THE CONTRIBUTION WITH RESPECT TO THE SELF PLUS ONE
CATEGORY AND THE CONTRIBUTION WITH RESPECT TO THE SELF PLUS THREE
OR MORE CATEGORY MAY NOT BE LESS THAN THE CONTRIBUTION WITH
RESPECTTOTHE SELF PLUSTWO CATEGORY
EXAMPLES
Prepared by: Manny Manso, RHU, ChHC, CDHC
NOT APPLICABLE FOR EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENT

13. 13
CONTRIBUTIONS
✓ EMPLOYEE PAYROLL CONTRIBUTIONS MAY BE CHANGED DURING THE
CALENDARYEAR
✓ TAX-DEDUCTIBLE CONTRIBUTIONS ARE ALLOWED UP TO THE TAX
FILING DEADLINE, EXCLUDING EXTENSIONS
✓ ANY PERSON MAY MAKE CONTRIBUTIONS ON BEHALF OF AN ELIGIBLE
INDIVIDUAL
✓ INDIVIDUAL MUST BE ENROLLED IN A QUALIFIED HDHP AS OF THE
FIRST DAY OFTHE MONTH
✓ CONTRIBUTIONS MAY NOT EXCEED ANNUAL LIMITS DEPENDING ON
• TYPE OF HDHP COVERAGE (SELF / OTHERTHAN SELF)
• YOUR AGE (OVER OR UNDER AGE 55)
• THE HDHP EFFECTIVE DATE, AND
• THE DATE ELIGIBILITY CEASES
✓ EXCESS CONTRIBUTIONS MAY BE REMOVED UP TO THE TAX FILING
DEADLINE INCLUDING ANY EXTENSION OR EXCESS CONTRIBUTIONS ARE
SUBJECTTO INCOMETAX PLUS A 6% EXCISE PENALTYTAX
CONTRIBUTIONS
✓ THE EFFECTIVE DATE OF THE HDHP PLAN AND THE ESTABLISHMENT OF
THE HSA ACCOUNT ARETWO SEPEREATE EVENTS
• EFFECTIVE DATE = WHEN CONTRIBUTIONS MAY BEGIN
• ESTABLISHMENT DATE = WHEN HSA ACCOUNT IS FUNDED AND
WHEN REIMBURSEMENT OF HSA FUNDS MAY BEGIN
EFFECTIVE & ESTABLISHED DATE
HINT: IF A MEMBER WHO DID NOT OPEN AN HSA LEARNS OF A NON-
EMERGENCY PROCEDURE, THEY CAN OPEN AND CAN PRORATE HSA
FUNDS RETROACTIVE TO THE HDHP EFFECTIVE DATE OR FUND FULL-
YEAR SUBJECT TO THE LAST MONTH RULE, TAKE A TAX DEDUCTION AND
PULL HSA FUNDSTAX FREE
FUNDS HERE

14. 14
CONTRIBUTIONS
✓ INDIVIDUALS ELIGIBLE ON DECEMBER 1ST ARE ELIGIBLE FOR FULL YEAR
CONTRIBUTION LIMITS BASED UPON THE TYPE OF HDHP COVERAGE (S
/ F) ONTHAT DATE, PLUS ANY CATCH-UP CONTRIBUTION
✓ INDIVIDUALS MUST REMAIN IN A QUALIFIED HDHP DURING A TESTING
PERIOD ENDINGTHE FOLLOWING DECEMBER 31ST
✓ FAILURE TO MEET THE TESTING PERIOD FOR ANY REASON OTHER THAN
DEATH OR DISABILITY WILL REQUIRE CONTRIBUTIONS MADE THAT
WOULD NOT HAVE BEEN POSSIBLE EXCEPT FOR THE LAST-MONTH
RULETO BE DECLARED AS INCOME, PLUS 10% PENALTYTAX
LAST MONTH RULE
QUALIFIED HSA FUNDING DISTRIBUTION
✓ YOU CAN MAKE ONE TAX-FREE QUALIFIED FUNDING DISTRIBUTION
FROMYOURTRADITONAL IRATO AN HSA ONLY ONCE INYOUR LIFETIME
✓ THE AMOUNT TRANSFERRED PLUS ANY CONTRIBUTIONS ALREADY
MADE CANNOT EXCED THE MAXIMUM HSA CONTRIBUTION FOR THE
YEAR
✓ THE DISTRIBUTION IS NOT TAXABLE, IS NOT TAX DEDUCTIBLE, AND
LIMITS OR REDUCES THE AMOUNT THAT CAN BE TAX DEDUCTIBLE BY
THE AMOUNT TRANSFERRED SO THAT A COMBINATION OF BOTH
AMOUNTS DO NOT EXCEEDTHE ANNUAL MAXIMUM LIMITS
✓ INDIVIDUALS MUST REMAIN IN A QUALIFIED HDHP DURING A TESTING
PERIODWHICH RUNS ON A 12 MONTH PERIOD
✓ FAILURE TO MEET THE TESTING PERIOD FOR ANY REASON OTHER THAN
DEATH OR DISABILITY WILL REQUIRE THE AMOUNTS TRANSFERRED TO
BE DECLARED AS INCOME, PLUS A 10% PENALTYTAX

15. 15
DISTRIBUTIONS
✓ DISTRIBUTIONS FOR NON-QUALIFIED MEDICAL EXPENSES ARE
INCLUDED IN THE INDIVIDUAL’S GROSS INCOME AND SUBJECT TO AN
ADDITIONAL 20% PENALTYTAX
✓ THE ADDITIONAL PENALTY TAX DOES NOT APPLY FOR DISTRIBUTIONS
MADE AFTER DEATH, DISABILITY, OR WHEN THE INDIVIDUAL ATTAINS
AGE 65
✓ DISTRIBUTIONS FROM HSA TO PAY OR REIMBURSE QUALIFIED MEDICAL
EXPENSES INCURRED IN THE CURRENT YEAR MAY BE DEFERRED TO
LATER TAXABLE YEARS, AS LONG AS THOSE EXPENSES ARE
SUBSTANTIATED AND WERE INCURRED AFTER THE HSA WAS
ESTABLISHED.
✓ DISTRIBUTIONS FROM HSAS FOR QUALIFIED MEDICAL EXPENSES ARE
NOT INCLUDED INTHE INDIVIDUAL’S GROSS INCOME
✓ MEMBERS WITH SELF-ONLY HDHP MAY USE FUNDS IN THEIR HSA TO
PAY FOR UNREIMBURSED MEDICAL EXPENSES OF OTHER TAX
DEPENDENTS
MARRIED EMPLOYEE IN HDHP - HSA QUALIFICATIONS
EE SELF-ONLY EMPLOYEE FUNDS HSA UPTO SELF-ONLY LIMIT
AND ANY CATCH-UP AS NOT COVERED BY SPOUSE
EACH FUNDS SEPARATE HSA UPTO SELF-ONLY
LIMIT AND ANY CATCH-UP
CAN’T FUND HSA AS SPOUSE’S PLAN PAYS OTHER
SPOUSE’S EXPENSES BEFORE DEDUCTIBLE IS MET
BOTH CAN FUND HSA UPTO COMBINED MAX FAMILY
LIMIT AND CATCH-UP AS BOTH QUALIFY FOR HSA
EE FAMILY
SPOUSE WITH GENERAL PURPOSE FSA GENERALLY DISQUALIFIES ANY EMPLOYEE CONTRIBUTIONS
SPOUSE
SELF-ONLY
NON-HSA HDHP
HSA HDHP
SPOUSE
FAMILY
NON-HSA HDHP
HSA HDHP
SPOUSE
FAMILY
NON-HSA HDHP
HSA HDHP
CAN’T FUND HSA AS SPOUSE’S PLAN PAYS OTHER
SPOUSE’S EXPENSES BEFORE DEDUCTIBLE IS MET
BOTH CAN FUND HSA UPTO COMBINED MAX FAMILY
LIMIT AND CATCH-UP AS BOTH QUALIFY FOR HSA
SPOUSE
EE + CHILD
NON-HSA HDHP
EMPLOYEE FUNDS HSA UPTO MAX FAMILY LIMIT AND
ANY CATCH-UP AS NOT COVERED BY SPOUSE
HSA HDHP
BOTH CAN FUND HSA UPTO COMBINED MAX FAMILY
LIMIT AND CATCH-UP AS BOTH QUALIFY FOR HSA
AN HSA CAN NOT REIMBURSETHE SAME EXPENSE IFTWO SPOUSES HAVE SEPARATE HSAS

16. 16
MEDICARE EMPLOYEE & HDHP - HSA QUALIFICATIONS
EMPLOYEE NO
HSA CONTRIBUTIONSARE ALLOWED NOTTO EXCEEDTHE SELF-
ONLY COVERAGE HSA LIMITS, PLUS ANY CATCH-UP CONTRIBUTIONS
EMPLOYEEYES HSA CONTRIBUTIONSARE NO LONGER ALLOWED
EMPLOYEE NO
SPOUSE NO
HSA CONTRIBUTIONS,ARE ALLOWED NOTTO EXCEEDTHE FAMILY
HSA COVERAGE LIMITS, PLUS ANY CATCH-UP CONTRIBUTIONS
EMPLOYEEYES
SPOUSEYES
HSA CONTRIBUTIONSARE NO LONGER ALLOWED
EMPLOYEEYES
SPOUSE NO
EMPLOYEE HSA CONTRIBUTIONSARE NO LONGER ALLOWED, BUT
SPOUSE MAY OPEN OWN HSA ACCOUNT, CONTRIBUTE UPTOTHE
FAMILY COVERAGE HSA LIMITS, PLUS ANY CATCH-UP CONTRIBUTION
EMPLOYEE NO
SPOUSEYES
HSA CONTRIBUTIONSARE ALLOWED NOTTO EXCEEDTHE FAMILY
HSA COVERAGE LIMITS, PLUS ANY CATCH-UP CONTRIBUTIONS
DELAYING MEDICARE IF EMPLOYED BY EMPLOYER WITH 20 OR MORE EMPLOYES AND
IF NOT ON SOCIAL SECURITY IS ALLOWED AND MAY POSSIBLY BE SUBJECT TO SOME PENALTIES
EE SELF-ONLY HDHP
EE FAMILY HDHP
ACA – ADULT CHILD – AGE LIMIT
THE AFFORDABLE CARE ACT ALLOWS YOUNG
ADULTS TO STAY ON THEIR PARENT’S HEALTH
CARE PLAN UNTIL AGE 26
THE IRS DEFINES THE AGE OF A TAX-DEPENDENT,
QUALIFYING CHILD AS UNDER THE AGE OF 19 OR
UNDER AGE 24 IF A FULL-TIME STUDENT
THE YOUNG ADULT’S OUT-OF-POCKET MEDICAL
EXPENSES CANNOT BE PAID FROM THE
PARENTS ACCOUNT
THE YOUNG ADULT CAN SET UP THEIR OWN HSA,
CONTRIBUTE UP TO THE FULL FAMILY LIMIT AND
DISTRIBUTE FUNDS FROM THEIR OWN HSA TO PAY
FORTHEIR OWN MEDICAL EXPENSES

17. 17
HSA & FSA ELIGIBILITY
YEAR-END FSA OPTIONS
✓ CARRYOVER/ROLLOVER: ALLOWS UP TO $500 IN FSA CONTRIBUTIONS
LEFT AT THE END OF THE YEAR TO USE IN THE NEXT PLAN YEAR (DOES
NOT REDUCE NEW PLANYEAR MAXIMUM ALLOWED)
✓ GRACE PERIOD: ALLOWS EMPLOYEES TO ROLL OVER THEIR ENTIRE
UNUSED ACCOUNT BALANCE INTO THE FOLLOWING YEAR TO PAY FOR
QUALIFIED EXPENSES
➢ A GRACE PERIOD CAN BE AS LONG AS TWO-AND-A-HALF MONTHS,
BUT EMPLOYERS DECIDES ON THE GRACE PERIOD AND HOW LONG
IT LASTS
ONLY ONE OFTHETWO OPTIONS APPLY:A CARRYOVER/ROLLOVER OR GRACE PERIOD,
BUT AN EMPLOYER IS NOT REQUIREDTO USE EITHER OFTHESE OPTIONS
✓ RUN-OUT: A RUN-OUT PERIOD IS HOW LONG IS ALLOWED TO FILE A
CLAIM FOR QUALIFED EXPENSES INCURRED DURING THE PRIOR PLAN
YEAR
➢ RUN-OUT PERIODS TYPICALLY LAST 90 DAYS AFTER THE END OF THE
PLANYEAR
HSA & FSA ELIGIBILITY
ALLOWABLE HSA CONTRIBUTIONS WITH FSA OPTIONS
✓ FSA WITH CARRYOVER/ROLLOVER: SEE GENERAL RULES BELOW
✓ FSA WITH GRACE PERIOD: SEE GENERAL RULES BELOW
✓ FSA CARRYOVER/ROLLOVERTO LIMITED PURPOSE FSA: YES
✓ FSA CARRYOVER/ROLLOVERWITH FORFEITURE OF ROLLOVER: YES
GENERAL CONTRIBUTION RULES WITH FSA OPTION
HSA ELIGIBLE PARTICIPANTS WHO HAVE FUNDS FROM A GENERAL PURPOSE FSA FOR
THE IMMEDIATELY PRECEDING CAFETERIA PLAN YEAR ARE NOT ELIGIBLE TO
CONTRIBUTE TO AN HSA UNTIL THE FIRST OF THE MONTH FOLLOWING THE END OF
THE GRACE PERIOD (HSA CONTRIBUTIONS ARETHEN PRO-RATA)
FUNDS MAY BE ROLLED FROM A GENERAL PURPOSE FSA TO A LIMITED PURPOSE OR
POST DEDUCTIBLE FSA (IF OFFERED BY THE EMPLOYER) TO ALLOW FOR
CONTRIBUTIONSTO BE MADETO AN HSA
IF A PARTICIPANT WAIVES THE ROLLOVER FUNDS PRIOR TO THE NEW PLAN YEAR
BEGINNING,THEY MAY CONTRIBUTETO AN HSA DURINGTHE NEW PLANYEAR

18. 18
QUESTIONS