The document provides information about HSAs (Health Savings Accounts) including: - HSAs are paired with HDHPs (High Deductible Health Plans) and allow individuals to pay for qualified medical expenses. Funds roll over year to year and can be invested for growth. - HSA Bank offers penny funding to establish accounts, works with any insurance carrier, and can continue administering HSAs if the employer changes insurance carriers. - Eligibility, contribution limits, and qualified medical expenses are defined by the IRS. Funds can be used to pay expenses via debit card, checks, or reimbursements and have tax advantages.

1. Relationship
Management
HSA Education

2. About HSA Bank (cont.)
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
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3. Differentiators
• All accounts are penny funded to establish
the HSA, which ensures your employee can
reimburse themselves for eligible expenses
incurred from the date the account opened
• HSA Bank can work with any insurance
carrier
• Can continue administering HSAs for your employees
if you change insurance carriers
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
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4. What is an HSA?
• A tax-advantaged savings account that you use to pay for qualified medical
expenses not covered by the HDHP, including deductibles, co-pays, prescriptions,
vision and dental care.
• Paired with a qualified HSA-compatible health plan to help eligible individuals pay
for qualified medical expenses.
• Unused funds that will roll over year to year. There’s no “use or lose it” penalty.
• Potential to build more savings through investing. You can choose from a variety of
HSA self-directed investment options.
• Additional retirement savings. After age 65, funds can be withdrawn for any
purpose without penalty .
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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5. How the HSA works with a High Deductible Health
Plan (HDHP)
Use the account to pay for current or future healthcare expenses including
deductibles, co-insurance, prescriptions, vision, dental care, and more. As an added
benefit, after age 65, HSA funds can be withdrawn for any purpose without penalty.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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6. Advantages of an HSA
• Funds roll over from year to year
• No “use it or lose it” philosophy.
• Tax benefits on contributions, earnings and distributions
• Contributions are either pre-tax (via paycheck) or tax-deductible.
• Portability
• Funds follow the employee if they leave the company or change health
insurance.
• Tax-free withdrawals for Qualified Medical Expenses even if qualifying
coverage ends.
• Long-term investment opportunities
• Not FDIC insured
• Control over healthcare dollars
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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7. Tax Treatments of an HSA
• Contributions
• Employee payroll contributions are deducted from employee’s federal taxable
income.
• Employees in the state of CA, AL and NJ are subject to state taxes.
• Post tax contributions are tax deductible when employee files taxes.
• All contributions (employer and employee pre-tax) are reported on the
employee’s W-2 in box 12 with the code W.
• Earnings
• HSAs grow in the same tax-deferred manner as IRAs.
• Distributions
• Withdrawals for qualified medical expenses are tax-free.
• Before age 65, funds withdrawn for non qualified medical expenses are
penalized at 20% and considered taxable income.
• After age 65, funds may be withdrawn for any reason without penalty but
considered taxable income.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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8. Who is eligible for an HSA?
Individuals who are covered by an HSA-compatible health plan
are eligible if they are NOT:
Covered by any other non HSA-compatible health plan
Traditional health plans, FSA, HRA, Tricare and/or VA benefits
Claimed as a dependent on another person’s tax return
Excluding spouses per Internal Revenue Code
Enrolled in Medicare
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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9. HSA-Compatible Health Plans
• The employee generally cannot have any other health coverage that is not an HDHP.
However, the employee can still be eligible even if the spouse has non-HDHP coverage
provided the employee is not covered by that plan.
• The employee can have additional insurance that provides benefits only for the
following items.
• Liabilities incurred under workers’ compensation laws, tort liabilities, or liabilities
related to ownership or use of property
• A specific disease or illness
• A fixed amount per day (or other period) of hospitalization
• Accidents
• Disability
• Dental care
• Vision care
• Long-term care
• Prescription drug plans (if the plan does not provide benefits until the minimum
annual deductible of the HDHP has been met)
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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10. Non HSA-Compatible Health Plans
• Medicare: Mere eligibility for Medicare does not make an employee ineligible to
contribution to an HSA. Rather, the term “entitled to benefits under” Medicare
means both eligibility and enrollment in Medicare. An employee who is enrolled in
any part of Medicare is not an eligible individual.
• General Purpose FSA or HRA: HSAs and general purpose FSAs and HRAs are not
allowed in the same household. However, the following arrangements do work
with an HSA.
• Limited-purpose FSA or HRA
• Suspended HRA
• Post-deductible FSA or HRA
• Retirement HRA
• FSA Grace Period: Coverage during a grace period by a general purpose FSA is
allowed if the balance in the FSA plan is zero at the end of it’s prior year.
Otherwise eligibility for the HSA will begin the first day following the end of the
grace period.
• Example: John’s FSA grace period ends on 3/15 in which he carries over a
balance from the previous plan year. John is not eligible for the HSA until 4/1.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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11. Non HSA-Compatible Health Plans
• VA Benefits: An employee who is eligible to receive VA medical benefits but who
has not actually received such benefits during the preceding three months is
eligible for the HSA. An employee is not eligible for the HSA if they have received
medical benefits from the VA at any time during the previous three months.
• TRICARE: Coverage options under TRICARE do not meet the minimum annual
deductible requirements for an HDHP. Thus, an employee covered under TRICARE
is not an eligible individual and may not contribution to an HSA.
• Eligibility of the employee’s spouse and dependents will not affect the
employee’s eligibility for the HSA.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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12. HSA Open Date
• First of the month eligibility
• HSAs are opened based upon the effective date of the HSA-compatible health
plan.
• Example: John’s HSA-compatible health plan is effective 1/1. John’s HSA will
be open on 1/1.
• Mid-month eligibility
• If an employee’s HSA-compatible health plan effective date is any date other
than the 1st
of the month, the IRS stipulates that the HSA would open on the 1st
day of the following month. (IRS notice 2004-50 Q&A 11)
• Example: Alex’s HSA-compatible health plan is effective 6/15. Alex’s HSA
would be open on 7/1.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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13. 2016 Single Family
Minimum Deductible $1,300 $2,600
Maximum Out-of-
Pocket
$6,550 $13,100
Maximum
Contribution
Single Family
2016 $3,350 $6,750
Catch-up Contribution
(Age 55+)
$1,000
Intended to
cover serious
illness or injury
Can pay for
eligible medical
expenses not
covered the
health plan
HDHP
HSA
HSA Contribution Limits
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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14. Catch Up Contributions
• Catch up contributions
• Employees age 55+ are eligible for an additional $1,000 catch up contribution.
• Spouses age 55+ can make an additional $1,000 catch-up contribution
annually if they meet all HSA eligibility requirements. Spouses must open their
own HSA to make the catch up contribution.
• Contributions need not be prorated based on when in the year a person turns
55.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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15. Easy ways to contribute to the HSA
There are several ways employees may contribute to (fund) their HSA. In addition,
other people can contribute to the employee’s HSA - like a spouse, family member, or
employer.
• Payroll Deduction: HSA Bank will facilitate recurring pre-tax payroll deductions as
part of a Section 125 Cafeteria Plan.
• Online Transfers: Through HSA Bank’s Member Website, employees can transfer
funds from an external bank account (i.e., checking or savings accounts) to the HSA.
• Personal Check or Money Order: HSA Bank will accept a personal check with a
completed Contribution Form mailed to HSA Bank directly at PO Box 939, Sheboygan,
WI 53082.
• HSA & MSA Transfer; IRA Rollover*: A once-per-lifetime transfer can also be made
from an IRA; however, transfers are subject to the annual maximum contribution
limit.
*Before initiating a transfer or rollover of any kind, employees are encouraged to consult a
qualified tax advisor to understand any conditions or risks that may apply.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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16. Easy Employer Enrollment Options
• Enrollment via our electronic file will allow the employer to
send their enrollment via our standard file format which will
be provided to the employer during the implementation
process. This file will be PGP-encrypted and sent securely to
our FTP/SFTP server.
• Electronic Enrollment allows HSA Bank to open an account
based on an electronic file and the employer or third-party
demonstrating the employee’s intent to open an HSA.
• Individual Online Enrollment
• Paper Application
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
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17. Convenient Employer Contribution
• Contribution file sent to the secure FTP/SFTP server with
funds pulled by HSA Bank or pushed to a clearing account at
HSA Bank.
• Online through the Employer Administration Site to initiate
a pull of funds from a designated external account for the
purposes of contributing to the employees’ accounts; this
option would allow the employer to avoid creating an
additional file.
• ACH Direct: Much like a direct deposit, you can use your
current payroll provider to make contributions directly to
your employees’ HSAs.
• Paper Checks to HSA Bank
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
17

18. HSA Contribution Prorating Provisions
• Last Month Rule
• If HSA-compatible coverage is effective after January 1st in a given year,
employees can contribute the annual IRS maximum as long as the HSA-
compatible plan is effective on or before December 1st
and fulfills the testing
period. (IRS Publication 969)
• If employee does not maintain eligibility during testing period, excess
contributions are subject to a 6% penalty and considered taxable income.
• Testing Period
• Qualifying coverage must continue through December 31st of the following
year from when HSA-compatible plan was effective.
• Example
• Shelly’s HSA-compatible plan is effective 12/1/14. She can fund the annual IRS
maximum as long as she remains HSA eligible through 12/31/15.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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19. Seamless Transferring of Accounts
• Establish New HSAs: An HSA Bank Business
Relations specialist will help you select the
enrollment and contribution options that best meets
your needs.
• Complete Transfer Forms: Once the HSAs have been
established, you can communicate the transfer to
your employees and distribute the transfer forms
provided by HSA Bank.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
19

20. • HSA funds can help cover some medical expenses not covered by
the health insurance.
• Medical expenses can be paid with an HSA Visa®
Health Benefits
Debit Card (provided when opening account) or by writing an HSA
check (optional when opening account, fee applies).
• Eligible medical expenses can be paid out-of-pocket and then
reimbursed from the HSA – tax free.
Paying for
Healthcare
expenses
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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21. HSA Distributions
• Account establishment date
• Employees can expense eligible medical expenses incurred after HSA is
established. IRS recognizes an HSA as established upon the account opening
and initial funding. (IRS Notice 2004-50 Q&A39 and IRS Notice 2008-59 Q&A
38)
• HSA Bank funds every new account with $0.01 to establish the HSA on the day
it is opened. (Note: The transaction description will read “HSA Bank deposit to
establish account”)
• Eligible medical expense auditing
• Unlike FSAs, HSA custodians are not required to determine whether HSA
distributions are used exclusively for eligible medical expenses.
• Employees determine if expenses are qualified and should maintain records of
expenses.
• Employees are responsible for reporting non qualified HSA distributions when
filing taxes.
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.
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22. Debit Card Capabilities
• Present the debit card for
direct payment of medical
expenses to any provider
who accepts VISA® and
provides medical products
and services
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
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23. Check Writing
• Optional HSA Checks
– No minimum balance requirements to order checks
– Unlimited check writing at no charge
– Or, transfer funds to an external account to use personal
checks to pay for eligible medical expenses
– See the HSA Bank Fee and Interest Schedule for check
fee amount
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
23

24. Opportunity to Invest HSA Funds
• No minimum HSA cash balance required to invest in
self-directed investment options (for most Partners)
• TD Ameritrade
– Access to bonds, stocks and thousands of mutual funds
• DEVENIR
– A pre-selected group of no-load mutual funds covering a
range of fund families and asset classes
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
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25. IRS-Qualified Medical Expenses*
• Employees can use their HSA to pay for a wide range of eligible medical
expenses (as defined by the IRS) for themselves, their spouse or tax
dependents. Here are just some examples:
©2015 HSA Bank. HSA Bank is a
Division of Webster Bank, N.A.,
Member FDIC.
25
• Doctor and hospital visits
• Medical equipment
• Dental care, braces,
dentures
• Vision care, glasses, contacts
• Prescription medications
(and over-the-counter
medication when prescribed)
*A list of Eligible Medical Expenses can be found in IRS Publication 502,
http://www.irs.gov/pub/irs-pdf/p502.pdf. As described in IRS publication 969,
http://www.irs.gov/pub/irs-pdf/p969.pdf, over-the-counter medications (when prescribed by a doctor)
are considered Eligible Medical Expenses for HSA purposes.
• Premiums for long-term care
insurance
• Premiums for COBRA
• Premiums for coverage while
receiving unemployment
compensation
• Premiums for individuals over
age 65