Yavapai Combined Trust Health Benefits. Summit Administration Services, Inc. 1

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1 Yavapai Combined Trust Health Benefits Summit Administration Services, Inc. 1

2 Benefits Basic Plus Plan = Unchanged Premier Plan = Unchanged New Additional Option: High Deductible Health Plan (HDHP) with a Health Saving Account (HSA) Summit Administration Services, Inc. 2

3 What is an HDHP (High Deductible Health Plan) Design In Network $2,500/person deductible In Network $5,000 Family deductible In Network $2,500/person out of pocket expense limit (includes deductible) In Network $5,000 Family out of pocket expense limit (includes deductible) Summit Administration Services, Inc. 3

4 How does an HDHP work? You must pay the applicable deductible then the plan pays 100% Only exception is the routine/wellness benefit. This benefit is paid at 100% no out of pocket expense to you for In Network. Summit Administration Services, Inc. 4

5 HDHP eligibility Employees and their dependents who meet the eligibility requirements. The employee can not be covered under any other Plan. The spouse and/or children can not be covered under any other plan in order to be covered under a HDHP. Summit Administration Services, Inc. 5

6 What is an H.S.A. (Health Savings Account) A tax advantage savings account that belongs to you. It s always paired with a qualified high deductible health plan. (HDHP) Summit Administration Services, Inc. 6

7 H.S.A. You and your employer can make tax-free deposits to an HSA as long as you are enrolled in an HDHP You can use the money in the HSA for qualified health expenses such as deductible, copays and coinsurance for you, your spouse or your tax deductible dependents (See attached list) An HSA is administered by a bank, insurance company or approved third-party custodian or trustee. If you are enrolled in Medicare you are not eligible to contribute to an HSA. Summit Administration Services, Inc. 7

8 HSA Contributions Maximum amount of HSA deposits per calendar (tax) year: 2014 Single Coverage = $3, Family Coverage = $6.550 Catch up for age 55 and over = additional $1,000 for 2014 Summit Administration Services, Inc. 8

9 How is HSA different from FSA (Flexible Spending Account) FSA has use it or lose it. HSA rolls over year to year You can take the HSA with you when you leave employment You can continue to contribute to the HSA as long as you are enrolled in a HDHP HSA funds can be used for healthcare expenses after termination of employment Summit Administration Services, Inc. 9

10 H.S.A. vs Flex You can have an H.S.A. and a limited flex account. Limited flex account is for dental and vision out of pocket expenses only. Summit Administration Services, Inc. 10

11 Mid Year Enrollment/Contribution If you aren t certain you ll be in the HDHP during the entire next tax year, you can contribute a prorated amount for the months you re actually eligible. Summit Administration Services, Inc. 11

12 Example of Prorating Mid-Year Enrollment Jane became eligible October 1 st She is unsure she will remain employed for the next calendar year She prorates her contribution as follows: $3300/12 = $275 $275 X 3 months = $825 Summit Administration Services, Inc. 12

13 EXAMPLE Jane become eligible July 1 st Jane contributes max of $3,300 to her H.S.A. by August 1, 2014 Jane quits her job on October 31, 2014 Jane will have to use the formula below: $3,300/12 = $275/month $275 X 4 = $1,100 $3,300 - $1,100 = $2,200 Jane will need to claim $2,200 on her 2014 taxes as income and pay a 20% penalty Summit Administration Services, Inc. 13

14 Eligible Expenses for HSA Deductibles, copay, coinsurance Medicare premiums for self Premiums for healthcare coverage while unemployed Long Term Care (See IRS Publication 969) (See handout for detailed eligible expenses) Summit Administration Services, Inc. 14

15 How do I determine how much to contribute to an HSA? Everyone has their own unique budget and healthcare expenses. Take into consideration your age and how close you are to retirement You can change your payroll deduction for the HSA during the year. Summit Administration Services, Inc. 15

16 Who is responsible for my HSA? ONLY YOU are responsible for the amount you contribute and the amount you use for qualified healthcare expenses. Summit, your employer and Health Equity are not responsible for the amount you contribute or the amount you use for qualified healthcare expenses. An HSA handbook received by Health Equity is posted to the Summit Website Summit Administration Services, Inc. 16