2019

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2 For more information or to enroll online: m (888) Monday Friday, 8:30 a.m. 5 p.m. ET P. O. Box North Chesterfield, VA Phone: (888) Fax: (804) Simply put, an HSA is a tax-favored health savings account for people with a qualified high-deductible health plan. An HSA provides triple tax savings. Contributions are tax deductible. Growth in interest and earnings are tax free. Withdrawals for eligible medical expenses are tax free. HSA Eligibility Federal regulations require you to meet all of the following eligibility requirements in order to open and contribute to an HSA: Covered under a qualified high deductible health plan on the first day of the month. Not covered by any other health plan, including your spouse s health insurance. Not covered by your own or spouse s medical flexible spending account (FSA). Not enrolled in any part of Medicare or Tricare. Have not received Veteran s health benefits in the past 90 days. Not claimed as a dependent on another person s tax return Single $3,500* Family $7,000* Catch up (age 55+) $1,000** **Catch up provision if you are age 55 or older by December 31 of the tax year Investment Options Our members have the option to access the money via a debit card or invest in a portfolio of funds whereby the money can potentially grow tax free, or both. Vanguard No-Load Mutual Funds Choose from the 23 Vanguard mutual funds offered No minimum contribution required Low expense ratios No transaction or redemption fees Not FDIC insured Debit Card APY varies based on account balance FDIC insured No monthly low-balance fee Annual Contribution Limits

3 Accessing & Saving HSA Funds An HSA is much like a savings account, but the funds are reserved just for eligible healthcare expenses. Once an eligible medical or prescription expense is incurred, you have the following two options: 1) Pay from your HSA Use with your debit card (if elected), or Request a withdrawal from your Vanguard funds OR Vanguard No-Load Mutual Funds 2) Pay out of pocket and let your HSA grow There are no time limits on reimbursements Tip: Remember to keep your receipts so you can reimburse yourself in the present or future for eligible medical expenses. View the IRS Publication 502 for a list of all eligible medical expenses. Three simple steps to get started 1. Confirm your health insurance plan is HSA qualified. 2. Select your investment options Vanguard funds, debit card or a combination of both. 3. Complete the HSA enrollment form or enroll online at Available at HealthSavings are 22 Vanguard funds each having distinct investment management objectives, strategies, risks and policies. The Vanguard Group provides investors with access to some of the leading money managers from around the world. They utilize a multi-manager approach to investing to provide greater diversification within each portfolio. Read the current prospectus on funds that interest you (available at for more information prior to investing. NOTE: For your HSA, you are not subject to the normal Vanguard minimum investment requirements. Securities offered through The Vanguard Group, Member NASD SIPC. Security products: Not insured by FDIC nor any federal government agency; may lose value; not a deposit of or guaranteed by the bank or any bank affiliate. Account Set-Up Fee Administration Fee Custodial Fee No charge $39 per year 6.25 basis points per quarter (i.e., $0.625 per $1,000 every three months). Fees will be deducted from the account balance quarterly.

4 Quarterly Statements Least Risk Most Risk No charge Vanguard Prime Money Market Fund Investor Shares Vanguard GNMA Fund Investor Admiral Shares Vanguard LifeStrategy Income Fund Vanguard Total Bond Market Index Fund Admiral Shares Vanguard LifeStrategy Conservative Growth Fund Vanguard Balanced Index Fund Admiral Shares Vanguard LifeStrategy Moderate Growth Fund Vanguard STAR Fund Vanguard Windsor II Fund Admiral Shares Vanguard LifeStrategy Growth Fund Vanguard 500 Index Fund Admiral Shares Vanguard Total Stock Market Index Fund Admiral Shares Vanguard Social Index Fund Investor Shares Vang3uard Selected Value Fund Investor Shares Vanguard Morgan Growth Fund Admiral Shares Vanguard Mid-Cap Growth Fund Admiralr Shares Vanguard International Growth Fund Admiral Shares Vanguard Mid-Cap Index Fund Admiral Shares Vanguard Total International Stock Index Admiral Shares Vanguard Extended Market Index Fund Admiral Shares Vanguard Strategic Equity Fund Vanguard Small-Cap Index Fund Admiral Shares VMMXX VFIJX VASIX VBTLX VSCGX VBIAX VSMGX VGSTX VWNAX VASGX VFIAX VTSAX VFTSX VASVX VMRAX VMGMX VWILX VIMAX VTIAX VEXAX VSEQX VSMAX Vanguard Mid-Cap Growth Fund Investor Shares VMGRX Vanguard, Morgan, Explorer and Windsor are trademarks of the Vanguard Group, Inc. All other marks are the exclusive property of their respective owners. Fees

5 Examples of Qualified Expenses Acupuncture Alcoholism (rehab/treatment) Ambulance Annual physical exam Artificial limbs/teeth Birth control Body scans Chiropractor Contact lenses/solution Crutches Dental treatments Eye glasses/surgery Hearing aids Long-term care expenses/premiums Medicines prescribed (not imported) Nursing home Nursing services Optometrist Orthodontia Oxygen Stop-smoking programs Surgery (not cosmetic) Therapy Transplants Weight loss program (prescribed by physician for a specific disease) Wheelchairs Concierge services Elective cosmetic Funeral services

6 Understanding the Basics: Health Savings Accounts What is an HSA? A health savings account (HSA) is a savings and investment account that can be used to reimburse eligible medical expenses, like doctor s office visits, prescriptions, vision and dental expenses. Unlike a simple savings account, the money is deposited tax free or is tax deductible if contributed after tax. Those funds remain tax free when used to pay or reimburse for eligible healthcare expenses. Who is Eligible for an HSA? To be eligible for an HSA, you must be covered under an HSA-qualified health plan on the first day of the month.* Also, you must not be: Covered by any other health plan, including a spouse s health insurance Covered by your own or a spouse s medical flexible spending account (FSA) Enrolled in any part of Medicare or Tricare Claimed as a dependent on another person s tax return * Health insurance providers and/or the insurance commissioner in your state can confirm if your plan is HSA-qualified. The IRS outlines which medical, vision, dental and prescriptions can be paid with HSA funds. Many common expenses like doctor s office visits, prescriptions, labs and x-rays are covered. For specifics: IRS publications 502 at at Why Invest in an HSA? With ongoing changes in healthcare, an HSA is increasingly more important. It s not only a tax-advantaged savings account, it s part of a comprehensive retirement package. Individual accountholders may choose one or both of these options: Investment Account First-dollar investing Choose from a range of well-regarded mutual funds tailored to meet your personal financial needs Fees up to 80% lower than industry average Lower fees mean more money in the account and higher earnings over time No minimum balance or waiting required Investments are not FDIC insured Interest Bearing Debit Account (if desired) Accountholders have the option to receive up to two free debit cards; however, a debit card is not required to withdraw funds from your account. Pay for eligible medical expenses at the point of service (e.g., doctor s office, pharmacy, etc.) Reimburse eligible out-of-pocket medical expenses through ATM withdrawals No monthly debit account fees (ATM service fees may apply) Cash/debit account is FDIC insured

7 Yes. The funds in your HSA may be used to pay eligible medical expenses for the member s spouse and tax dependents, and is not affected by their insurance coverage. For additional information regarding domestic partnerships, divorce, etc., see IRS publication 969 at No, there is not. With an HSA, you do not have to reimburse yourself in the same year you incur an expense. HSA funds roll over from year-to-year; therefore, you may save your receipts and reimburse yourself at any time in the future. Many accountholders invest their HSA like they would their retirement plan, then reimburse themselves when they really need the money or after they retire. The choice is yours. Yes, but income tax and a 20% tax penalty will be required on the amount you spend on non-qualified medical expenses. (NOTE: After you reach age 65, or experience disability or death, the 20% penalty no longer applies; however, you would still pay income tax. And unlike most retirement plans, there s no required minimum distribution from an HSA.) an HSA? April 15th is the last day to make contributions to your HSA for the previous tax year. The Internal Revenue Service (IRS) determines the maximum amount* that can be contributed to an HSA each year. We also post the contribution limits on our website. * Maximums include any employer contributions. There is a catch up provision if you are age 55 or older by December 31 of the tax year. Both accounts can reduce healthcare-related expenses with pre-tax funds. However, two of the largest difference are: With an FSA, if an employee leaves, the FSA stays with the company. An HSA belongs to the individual and stays with the individual. An FSA does not carry over from year-to-year. It is a use it, or lose it account. An HSA carries over from year-to-year and accumulates tax-free over time.