Who is the Bancorp Bank, HSA Benefits for Employers and Employees, HSA Basics, Product Features, Opening Process and Investment Platform

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Health Savings Account Overview
Presented by The Nicole Stockamp

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Agenda
 Who is The Bancorp Bank?
 Review of HSA Features, Eligibility & Benefits
 Tax Benefits
 HSA Product Features
 Contributions, Distributions & Qualified Medical Expenses
 Processes for Opening and Funding Accounts
 Overview of Investment Service & Online Tools
 Resources

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Who is The Bancorp Bank?
 FDIC insured full-service financial institution
 Headquartered in Wilmington, Delaware
 Over 100,000 Health Savings Accounts
 $178 Million in HSA Deposits
 Clients Provide Services to 22 Million Members
 Publicly traded (NASDAQ NM: TBBK)
 Highly experienced banking and technology management team

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Why is The Bancorp Bank Different?
 Simple integration and workflow
 Competitive rates
 Open investment platform
 An end-to-end solution with no hidden charges or fees
 Only Bank dedicated 100% to private-label banking
 Superior customer service – dedicated to the needs of HSA customers

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Key Features of an HSA

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Key Features of an HSA
 The money is owned by the account holder
 The funds can be rolled over from year to year, there is no “use-it
or lose-it” rule
 Over a period of time, the accounts can accumulate significant assets
that can be used for healthcare tax free
 Funds in the HSA can be invested
 If an individual no longer has an HSA qualified HDHP, they
cannot contribute to their HSA, but they can continue to spend
or save the funds already deposited

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Who Is Eligible to Open an HSA?
 Participants must be enrolled in an HSA qualified high deductible
health insurance plan (HDHP)
 Cannot be covered by any other health insurance that reimburses for
health expenses, unless it is another HSA-qualified high deductible
health plan
 Cannot be enrolled in Medicare or Medicaid
 Cannot be eligible to be claimed as a dependent on another person’s
tax return
 Must be over 18 years of age

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Why choose an HSA?
A family with a $3,000 deductible, uses
50% of the account every year, saving
$1,500 a year. If you start at age 35,
with the 7% rule (7% average rate of
return every ten years) you could have
$50,000 in savings by age 65.
(Jerry Hurd, President of Benefits
Design Group (TPA), HSA Insider)
$1,500
$16,000
$33,200
$51,500
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Year 1 Year 10 Year 20 Year 30
Just like a 401(k), it is wise to start early to build up savings.

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Benefits to Employers
 High Deductible Health Plans dramatically lower healthcare costs for
employers, allowing many to provide health benefits they might not
otherwise be able to afford
 27% of HDHPs/HSAs in the small group market were sold to
employers that did not previously offer coverage for their employees
 HDHPs raise consumer awareness of the real costs of health care,
total health spending is reduced when consumers bear more
responsibility for their healthcare expenses
 HDHPs & HSAs are increasing in popularity with 40%-50% expected
annual growth over the next 5 years
 The superior product features of The Bancorp HSA can assist in
selling the viability of an HDHP to clients

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Benefits to Customers
 The money is owned by the account holder and may continue to grow
each year
 Customers can easily transfer or roll-over an existing HSA, FSA,
HRA, or IRA
 All amounts in the HSA are fully vested
 HSA funds can be invested
 HSAs remain with individuals through employment changes

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Tax Benefits
 Reduce federal income taxes by reducing adjusted gross income
 Reduce state income taxes (in most states)
 HSA contributions earn interest tax-free
 Deductions of HSA contributions do not need to be itemized on
federal income taxes
 Pay for qualified medical expenses with pre-tax dollars
 Pay Medicare part A & B expenses and long-term care insurance
with pre-tax dollars
 Annual tax documentation is issued for contributions &
distributions made during the year
.

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HSA Product Features
 FDIC Insured
 Monthly maintenance fee of $2.50
-waived for first 90 days after the account is opened
-waived for all customers with a balance exceeding $2500.00
-waived in any month an electronic deposit is made into the account
 Competitive interest rates paid on balances over $1.00
 FREE Visa debit card and free first order of checks, to access your funds
 FREE full online account access and toll free 24/7 customer service
 FREE ACH money transfer functions - over 20,000 deposit locations nationwide
 Ability to invest with our partner, National Financial Services
 Overdraft Protection on HSAs is available through a personal line of credit

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Contribution Guidelines
 Contributions are not subject to income tax
 Contributions can be made by the accountholder, employer
or another third party
 Contributions in excess of the allowable limits must be
withdrawn or incur a 10% penalty
 Individuals 55 or older may contribute “catch-up”
contributions to their HSA until they enroll in Medicare

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Contribution Limits
NOTE: The 2008 catch-up limits (for individuals 55 or
older) are $900 in 2008 and $1000 in 2009.

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Deductible Limits

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Distributions
 Pay for eligible medical expenses for the account holder, spouse,
or any dependents
 Reimbursement can be taken from the HSA for expenses from
prior years, as long as the HSA was in place when the expenses
were incurred
 Withdrawals for non-medical expenses may provide tax advantages if
taken after retirement age, and they incur penalties
if taken earlier
 Account holder is responsible for ensuring HSA funds are used
for qualified expenses and to maintain records of these expenses

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Qualified Medical Expenses
According to the Internal Revenue Service (IRS), HSA funds
can be used to pay for:
 Most medical care and services, dental services, vision care, and some over-the-
counter drugs such as aspirin
 Health insurance premiums under COBRA continuation coverage
 Health insurance premiums while receiving unemployment compensation
 Medicare Part A or Part B premiums
 A qualified long term care insurance contract
NOTE: Qualified Medical Expenses must be incurred on or after the date the HSA
was established
Eligible medical expenses for HSA's are defined in Section 213(d) of the Internal Revenue
Code. A complete list is available from the IRS in Publication 502 (Medical and Dental
Expenses) by visiting www.irs.gov or by calling 800.829.3676

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HSA Opening Process
 The member enrolls in a High Deductible Health Plan
 They may open their Health Savings Account via a paper or
online application. Their employer may also open within the
“Group Enrollment” process
 Bancorp reviews the data for each individual and begins the
validation process
 The account may be opened once it is validated according to
Customer Identification Procedures outlined in The Patriot Act
guidelines

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HSA Opening Process (continued)

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HSA Opening Process (continued)
• Debit Cards, PIN, Login, Password and Checks are mailed
separately, and should be received within 7-10 business days

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New Account Funding - Employer
Employers may deposit money into employee accounts
using the following methods:
 HSA Employer Funding Tool
 Wire funds and send employer contribution form
 Check or money order
 Direct Deposit

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New Account Funding - Employee
Employees may also fund their HSA account using any of the
following methods:
 E-Money Mover
 Credit Card
 E-transfers
 Wire
 Check or money order
 Direct Deposit
 ATM
 UPS Store
 MoneyGram®ExpressPayment

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Direct Deposit Process
Employee’s may request for a pre-
set dollar amount to be deducted
from their paycheck and
electronically deposited into their
HSA account
 A direct deposit form is
downloaded from the website and
returned to their employer along
with a voided check from their
HSA account
 Employees will need to contact
their employer if they have any
changes to their direct deposit
contribution

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Investment Service Overview
 Able to invest equities and mutual funds via National Financial Services,
a wholly-owned subsidiary of Fidelity Investments
 Brokerage account may be opened after HSA balance exceeds $2,500
($1000.00 minimum required balance after account opened)
 Investment service is completely self-directed, allowing members to:
 Place trades
 Find stock quotes
 Retrieve reports & track their portfolio
 Research equities
 Chart stock options

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 Application can be downloaded from the www.thebancorpfloridahsa.com site
under “Investment Option”. Completed NFS applications are mailed to
Bancorp
 Bancorp sets up the investment account within 2 business days of receiving
completed application. The User ID & password are emailed to the member
 Individuals may log into their NFS account to:
– Research equities immediately
– Trade after 7 business days from receiving the user ID information
 All trades clear electronically through the participant’s HSA account
 Sales shares are deposited back into the member’s HSA account
Investment Account – Set-Up Process

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Website Tools
Online tools available to help consumers better plan and
monitor their healthcare savings and spending.
Online Calculators - found under the Customer Resources
button, calculator link. These tools help consumers to determine
what their healthcare spending patterns look, how much they
should budget for tax-exempt savings, and to see what the future
value of their savings is worth:
- Health Savings Account Contribution Calculator
- HSA vs. Traditional Health Plan Calculator
- HSA Savings Calculator
- HSA Goal Calculator
- HSA Business Calculator

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Website Tools (continued)
Account Snapshot - Allows participants to view a snapshot of their real time
account balance and both contributions and distributions for the current and
prior year. In addition, if they have an investment account they can see the
fair market value of their portfolio.

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Resources
For assistance with any Health Savings Account-related Questions:
• 24/7 customer service support:
- Phone: 866-271-2393
- email: bancorpflhsa@thebancorp.com
- Fax: 302-385-5099
• 24/7 online access: www.thebancorpfloridahsa.com
Questions on Investment Service:
• Phone: 800.650.5863
• eMail: hsainvestments@thebancorp.com
• Trade assistance: 866.580.6097
For detailed information on HSAs or Qualified Medical Expenses:
• Visit: www.ustreas.gov/offices/public-affairs/hsa
• IRS: 800.829.3676 or www.irs.gov