Your DuPont Benefit Resources. BeneFlex Health Savings Account Plan July 2008

Transcription

1 Your DuPont Benefit Resources BeneFlex Health Savings Account Plan July 2008

2 TABLE OF CONTENTS DETAILS OF THE PLAN...1 PREFACE...1 INTRODUCTION...1 ELIGIBILITY...2 ELIGIBLE DEPENDENTS...2 ENROLLMENT INFORMATION...2 CONTRIBUTIONS...3 DISTRIBUTIONS...5 QUALIFIED MEDICAL EXPENSES...5 NONQUALIFIED EXPENSES...6 ROLLOVERS...7 ABOUT YOUR PARTICIPATION...7 FUTURE OF THE PLAN...8 ADMINISTRATIVE INFORMATION...8 PLAN SPONSOR...8 PLAN NAME...9 TYPE OF ADMINISTRATION...9 PLAN CUSTODIAN...9 PLAN YEAR...9 SOURCE OF BENEFITS FUNDING...9 AGENT FOR LEGAL SERVICE OF LEGAL PROCESS...9 CLAIMS ADMINISTRATOR...9 CONTACTS...9 FOR CHANGES TO ENROLLMENT OR FUTURE PAYROLL CONTRIBUTIONS...9 FOR THE ADMINISTRATION OF YOUR ACCOUNT...10 FOR DISTRIBUTION FORMS...10 FOR ISSUES WITH CLAIMS...10 DICTIONARY TERMS...10

3 BeneFlex Health Savings Account Plan DETAILS OF THE PLAN Preface This Summary Plan Description (SPD) provides a concise description of the Plan for you and your eligible dependents. While this SPD contains detailed and important information about your benefit Plan, every attempt has been made to communicate that information clearly and in easily understandable terms. All references to the Company in this document pertain to the specific company that employs you. While the Company intends to continue the benefits and policies described in this booklet, the Company reserves the right to change, modify or discontinue the Plan at its discretion at any time. This SPD does not constitute a contract of employment or guarantee any particular benefit. In the event of a discrepancy between this SPD and the Plan document, the Plan document will govern. Introduction Employees participating in the DuPont BeneFlex Medical Care Plan s High Deductible PPO option may elect to also participate in the Health Savings Account Plan. A Health Savings Account (HSA) allows you to save and later withdraw funds to pay for qualified health care expenses on a before-tax basis. If you enroll, your HSA contributions will be deducted from your pay on a before-tax basis and deposited into your interest-bearing personal HSA each month. You may withdraw money from your HSA at any time to reimburse your health care expenses (including medical, dental, and vision expenses) not covered by other benefit plans or insurance. Or, you can let your account grow and earn interest (tax-free) for future health care expenses, even into retirement. You own your HSA, so you keep it, even if you change medical plan options or leave the Company. At the end of the year, money left in the account remains available for use in future years. Any amount distributed from your HSA that is used exclusively to pay for qualified medical expenses for you, your spouse or your federal tax dependents is not includible in your gross income. (See page 6 for information on qualified medical expenses.) You are not required to submit documentation to the Plan regarding the nature of your withdrawal; however, you should keep supporting documentation in case you are ever personally audited by the Internal Revenue Service (IRS). If you withdraw HSA funds to pay for items/services that are not qualified health care expenses, it is your responsibility to report the withdrawal on your personal tax returns. Non-qualified withdrawals are treated as taxable income in the year in which the money is withdrawn and may be subject to a tax penalty. Consult your tax advisor or the IRS for further information on the tax implications of HSA withdrawals. You will need to satisfy the requirements described in this SPD in order to participate in the HSA. It is your responsibility to review the eligibility requirements and ensure you meet those requirements prior to enrolling. 1

4 Eligibility Eligible employees You are eligible to contribute to an HSA if you meet all of the following requirements: You are a full-service employee of the DuPont U.S. Region participating in the BeneFlex Medical Care Plan s High Deductible PPO option; You are not covered under another medical plan (such as a group plan offered by a spouse s employer, TRICARE medical benefits for military personnel and their families, a private medical insurance policy, or a state or federal medical plan) that is not also a qualified high deductible health plan, as defined by the IRS; You are not enrolled in Medicare; and You may not be claimed as a dependent on another person s tax return. Since January 1, 1992, the BeneFlex Flexible Benefits Plan has been offered to all DuPont U.S. Region employees. However, you are not eligible for the BeneFlex Health Savings Plan if you are an employee, or dependent of such employee, in a bargaining unit represented by a union for collective bargaining unless and until the site manager has authorized the benefit, collective bargaining on the subject has taken place, and any requisite obligations thereunder have been fulfilled. Eligible Dependents You can use your HSA to reimburse qualified health care expenses for yourself, your spouse, or your Qualified Child or Qualified Relative, as defined by the IRS. Same-sex domestic partners are not recognized by the IRS as eligible dependents. For a definition of a Qualified Child or Qualified Relative, refer to IRS Publication 502 for the current tax year or Section 152 of the Internal Revenue Code. Enrollment Information Enrolling in the Plan You can enroll in the HSA during the annual BeneFlex Election Change Period or at any time during the year, provided that you are enrolled in the BeneFlex Medical Plan s High Deductible PPO option. Participation is voluntary. New employees hired before December 1 can enroll for the current year. Any employee hired on December 1 or later may enroll but must wait to begin participating until January 1 of the following year. If you are a newly hired employee, you must call the HR Services Center to make your benefit elections within 31 days of the date on your new hire package that is mailed to you. If you do not enroll you will be defaulted to no HSA coverage, so it is important that you enroll in a timely manner. Your HSA election will stay in effect for the entire Plan Year (January 1 December 31) unless you change your election or stop participating in the BeneFlex Medical Plan s High Deductible PPO option. Refer to the section below titled Making changes for further information. 2

5 BeneFlex Health Savings Account Plan You do not have to re-enroll each year. If you do not make a change during the annual BeneFlex Election Change Period, you will remain enrolled in the HSA Plan for the following year with no change to your elections, provided that you continue to participate in the BeneFlex Medical Care Plan s High Deductible PPO option. When participation begins Once enrolled, your HSA participation will start the first of the month following your election or January 1 if you enroll during the annual BeneFlex Election Change Period. Making changes You may change your HSA election at any time and for any reason. You may do any of the following: elect to begin HSA contributions if previously waived increase or decrease your monthly HSA contribution amount elect to stop HSA contributions. You change your HSA election by calling the HR Service Center. All changes in your benefit elections made during the annual BeneFlex Election Change Period will become effective on the first day (January 1) of the new Plan Year. If you request a change to your current year HSA election, your HSA change will be effective the first of the month following the date the change was reported. Contributions You select an amount to contribute to the Plan. The minimum contribution is $10/month. The maximum monthly contribution is the IRS-determined annual maximum divided by the number of months left in the year. The annual maximum varies, depending on your age and the level of coverage you elected for the BeneFlex Medical Care Plan s High Deductible PPO option. The maximum HSA contribution set by the IRS for 2008 is: High Deductible PPO coverage level 2008 Maximum Annual HSA Contribution You only $2900 All other coverage levels $5800 If you are approved to work part-time under Flexible Work Practices, your maximum monthly HSA contribution is the same as if you were working a full-time schedule. The maximum monthly HSA contribution shown above applies. In addition, employees age 55 and over may save an additional $900/year as a catch-up contribution for 2008, as permitted by the IRS. An employee may initiate catch-up contributions effective the first of the month in which he/she attains age 55. For example, if you turn age 55 on May 15th, you may contact the HR Service Center in April to increase your HSA contribution effective May 1st. When contributions are deposited Your contributions will be deducted from your pay while you are an active employee and deposited into your account on a monthly basis. 3

6 After-tax optional contributions You may make a lump sum contribution directly into your HSA provided that you have made at least one month of payroll contributions to the HSA for the Plan Year. You are responsible for making sure that your total HSA contributions for the year (both before-tax payroll contributions and after-tax lump-sum contributions) do not exceed the maximum monthly allowable contribution amount times the number of months you were eligible to participate in the HSA. After-tax lump-sum contributions must be received by Aetna by April 15 of the year following the year for which the contributions are made. When determining your adjusted gross income for tax purposes, any after-tax HSA contributions are treated as an above the line deduction, reducing your gross income. Consult your tax preparer for further information. Interest Your HSA can grow over time. Once deposited, your funds will be invested in an interest account maintained by Aetna. The interest rate is a variable rate subject to change throughout the year. Interest is calculated daily based on the compounded accrued balance and is credited to your account monthly. Account statements A statement of activity will be mailed on a monthly basis after interest has been credited. Tax information Your ongoing contributions to the Health Savings Account are deducted from your paycheck on a before-tax basis. This means that the money is deducted from your pay before federal, Social Security and most state and local income taxes are withheld. By contributing on a before-tax basis, you reduce your taxable pay and, as a result, you lower the amount of taxes you owe. The amounts reimbursed to you from the Plan for qualified health expenses are also not taxable. In certain situations, IRS tax rules allow you to deduct some health care expenses on your federal income tax return. If you have significant medical expenses during the year that are in excess of 7.5% of your adjusted gross income, you can deduct medical expenses on your tax return. The Health Savings Account Plan is a benefit to you because you may use it to pay on a before-tax basis for expenses that are not deductible to you because of the 7.5% threshold. Note that the same expense cannot be claimed as a tax deduction more than once. If you use the Health Savings Account to pay for a qualified health expense, you cannot claim the same expense as a tax deduction. The IRS provides information about the tax deduction and qualified expenses. Consult your tax advisor and IRS Instructions for Form 8889 for further details. Important considerations Since no Social Security taxes are paid on the amount of your contributions, if your annual taxable pay is under the Social Security maximum taxable amount, your income for Social Security benefit purposes is less and your Social Security benefits at retirement or disability may be slightly reduced. Whether your Social Security benefits are affected depends on a number of factors, such as your current age, your pay before participating in the Health Savings Account Plan and your future pay levels. 4

7 BeneFlex Health Savings Account Plan DISTRIBUTIONS You have the right to withdraw or transfer your accumulated HSA balance at any time, free of charge. When you want to withdraw money from your HSA, complete an HSA Withdrawal Form. You may obtain a withdrawal form: by calling Aetna at or visiting the HSA account section of the Aetna website at by visiting the DuPont Human Resources internal web site at You may also withdraw by using the Aetna HSA Debit Card that can be used at various point-of-sale locations such as the pharmacy or physician s office or at ATMs. It is your responsibility to maintain the back-up documentation concerning the withdrawal for your personal tax records. The minimum withdrawal is $1, except for the final withdrawal of your remaining account funds. If you request a withdrawal that is greater than the funds available in your HSA at the time your withdrawal is processed, you will receive the available HSA funds and the remaining requested balance will be pended and distributed to you once additional contributions are received in your account. Checks are issued each business day and Aetna will: mail your withdrawal fund check to your home address, or deposit your withdrawal funds directly into your checking or savings account if you have signed up with Aetna for HSA automatic deposit. You may obtain a HSA Authorization Direct Deposit Form by calling Aetna at or by visiting the Forms Central section of the DuPont Human Resources internal web site at Qualified Medical Expenses Distributions from your HSA used exclusively to pay for the qualified medical expenses of you, your spouse, or your federal tax dependents are excludable from gross income for federal tax purposes. In general, amounts in an HSA can be used for qualified medical expenses and will be excludable from gross income even if you are not currently eligible to make contributions to the HSA. For example, if you stop participating in the High Deductible PPO medical plan option and have a balance remaining in your HSA, you may withdraw money from your HSA to pay for qualified medical expenses and not be taxed on the distribution. Similarly, if you are over age 65 and entitled to Medicare benefits, distributions used exclusively to pay for qualified medical expenses continue to be excludable from your gross income. Qualified medical expenses are expenses paid by you, your spouse or dependents which would generally be an eligible deduction on your tax return*. These expenses cannot be covered by any other benefit plan or insurance. Following is a partial list of expenses that are qualified medical expenses if they are not covered by a benefit plan or insurance: 5

8 Medical, dental or vision plan deductibles, copayments and coinsurance Prescription copayments and coinsurance Nonprescription drugs such as aspirin, allergy medication, and cold medication Vision care and eyeglasses or contact lenses Hearing care and hearing aids Orthodontia expenses Costs in excess of dental plan limits Dental care, excluding cosmetic treatment Equipment for the mentally or physically disabled. Generally, health insurance premiums are not qualified medical expenses for purposes of HSA distributions except for the following: qualified long-term care insurance (up to the amounts allowed by the IRS), COBRA health care continuation coverage, and health care coverage while you are receiving unemployment compensation. In addition, for individuals over age 65, the following are considered qualified medical expenses: premiums you pay for Medicare Parts A, B, or D, premiums you pay for Medicare HMO coverage, and premiums you pay for employer-sponsored health insurance. IRS publication 502 ( Medical and Dental Expenses ) can be used as a guide to eligible expenses. For added clarification on qualified medical expenses, consult your personal tax advisor. You may withdraw money from your HSA to pay or reimburse qualified medical expenses incurred any time after you began participating in the HSA. There is no time limit on when the distribution must occur. However, to be excludable from your gross income, you must keep records sufficient to later show that the distributions were exclusively to pay or reimburse qualified medical expenses, that the qualified medical expenses have not been previously paid or reimbursed from another source and that the medical expenses have not been taken as an itemized deduction in any prior taxable year. Nonqualified Expenses Any HSA distribution not used exclusively to pay for qualified medical expenses of you, your spouse or your federal tax dependents is includable in your gross income and is subject to an additional 10% tax on the amount includable. The 10% tax penalty does not apply in the case of distributions made after your death, disability, or attaining age 65. Nonqualified expenses include: *in accordance with IRS Code Section

9 BeneFlex Health Savings Account Plan Expenses reimbursed by another health plan Expenses incurred before you began participating in the HSA Premiums for Medicare Part A, B, or D or a Medicare HMO prior to reaching age 65 (even if you are enrolled in Medicare due to a disability or have end stage renal disease) Distributions not used to pay for the qualified medical expenses of you, your spouse or dependents. You are responsible for determining whether or not your distribution is used for qualified medical expenses. Neither the Company, the Plan or the Custodian determine whether HSA distributions are used for qualified medical expenses. You make that determination and should maintain records supporting your distribution. You are responsible for reporting nonqualified distributions on your taxes. Interaction with Health Care Spending Account Plan benefits If you elect to participate in both the Health Savings Account and the Health Care Spending Account Plan, you may only be reimbursed for your medical plan deductible expenses from the Health Savings Account. All other qualified health care expenses (such as vision, dental, or medical plan expenses after the deductible) may be reimbursed from either Plan. Rollovers You may make one rollover transaction into or out of your HSA each Plan Year, transferring funds from one trustee/custodian to another trustee/custodian. For example, if you had an HSA with a prior employer and now participate in the BeneFlex HSA Plan, you may rollover your prior HSA balance into this HSA Plan. To qualify as a rollover, any amount paid or distributed from an HSA to you must be deposited in an HSA within 60 days after the date of receipt of the payment or distribution. Contact Aetna at for rollover forms and information. About Your Participation If you stop participating in the High Deductible PPO medical option Your participation in the HSA Plan ends at the end of the month in which you stop participating in the High Deductible PPO medical plan option. Your HSA funds will be automatically transferred into an individual HSA with Aetna. An account maintenance fee ($3.00/month as of June 1, 2008) will be deducted from your HSA each month that you continue to maintain an account balance. You may withdraw your HSA funds at any time, subject to the tax implications that apply to Health Savings Accounts. Your HSA will continue to earn interest, at rates set forth by Aetna. If you leave the company or retire Your participation in the HSA Plan ends at the end of the month in which you leave the Company for any reason, including retirement, and are no longer employed as an active Full-Service Employee. Your HSA funds will be automatically transferred into an individual HSA with Aetna. An account maintenance fee ($3.00/month as of June 1, 2008) will be deducted from your HSA each month that you continue to maintain an account balance. You may withdraw your HSA funds at any time, subject to the tax implications that apply to Health Savings Accounts. Your HSA will continue to earn interest, at rates set forth by Aetna. 7

10 Coverage when you are on a leave of absence Taking a leave of absence does not affect your HSA eligibility, as long as you continue to participate in the High Deductible PPO medical plan option. If you are on an unpaid leave of absence, no HSA payroll contributions will be taken for the months in which you receive no pay. You may make an after-tax lump-sum contribution at your discretion to make up for any missed contributions, but you are not required to do so. When you return from an unpaid leave, your HSA payroll contributions will re-start. If you die Upon death, any balance remaining in your HSA becomes the property of your HSA beneficiary(ies). To name one or more beneficiaries, you must contact the Custodian, Aetna. You may name anyone you choose as your beneficiary. You may change your beneficiary at any time by contacting the Custodian and requesting a new beneficiary designation. If you do not designate a beneficiary or if your beneficiary does not survive you, any balance remaining in your HSA will be paid to your estate. If your surviving spouse is the named beneficiary of your HSA, the HSA becomes the HSA of your surviving spouse. Your surviving spouse is subject to income tax only to the extent distributions from the HSA are not used for qualified medical expenses. If, by reason of your death, the HSA passes to a person other than your surviving spouse, the HSA ceases to be an HSA as of the date of your death, and the person is required to include in gross income the fair market value of the HSA assets as of the date of death. For such a person (except your estate), the includable amount is reduced by any payments from the HSA made for your qualified medical expenses, if paid within one year after your death. When coverage ends Health Savings Account Plan coverage ends at the end of the month in which you or your dependent(s) are no longer eligible for coverage. Future of the Plan The Company expects to continue the Health Savings Account Plan. However, the Company reserves the right to change, modify, or terminate this Plan at any time. ADMINISTRATIVE INFORMATION Plan Sponsor E.I. du Pont de Nemours and Company 1007 Market Street Wilmington, DE Phone: (302)

11 BeneFlex Health Savings Account Plan Plan Name This summary describes benefits for the BeneFlex Health Savings Account Plan. It is not considered a plan subject to the Employee Retirement Income Security Act of 1974 (ERISA). Type of Administration The Plan is administered by Aetna, as the Custodian. Plan Custodian The Plan Custodian has the authority to control and manage the operations and administration of the Plan. You can reach the Custodian at: Aetna P.O. Box 3500 Richmond, KY Phone: (800) Plan Year The Plan Year is January 1 through December 31. Source of Benefits Funding You pay the cost. Agent for Legal Service of Legal Process E.I. dupont de Nemours and Company 1007 Market Street Wilmington, DE Phone: Claims Administrator Aetna PO Box 3500 Richmond KY Phone: (800) CONTACTS For Changes to Enrollment or Future Payroll Contributions Contact the HR Service Center. 9

12 For the Administration of Your Account Aetna PO Box 3500 Richmond KY Phone: (800) For Distribution Forms Aetna PO Box 3500 Richmond KY Phone: (800) For Issues with Claims Aetna PO Box 3500 Richmond KY Phone: (800) DICTIONARY TERMS The following terms are highlighted throughout the SPDs as having definitions. In this section, you will find the definitions for these terms to help clarify their meaning and to provide information to better help you understand the provisions of your benefit Plan. BeneFlex Election Change Period (annual enrollment, open enrollment) The period of time each year designated by the Company when you may generally make changes to your benefit elections. Company The association or organization you work for and that provides your benefit program. Plan Year The 12-month period, or policy or fiscal year on which the Plan s records are kept. The Plan Year runs from January 1 through December 31. Summary Plan Description (SPD) A legally required document intended to help you understand your benefits, how the Plan operates, how to file claims, and your rights and responsibilities as a Plan participant. It does not describe every feature in the Plan and it is not intended to be a full statement of the Plan documents Copyright 2008 DuPont. The DuPont Oval and DuPont are trademarks or registered trademarks of E.I. du Pont de Nemours and Company or its affiliates. K (Rev. 7/08)