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1 Frequently Asked Questions: HDHP with HSA 2012 Annual Enrollment Table of Contents Click on a section or question to be taken directly to the answer you re looking for, or read through all the questions and answers. High Deductible Health Plan with Health Savings Account The Basics: The High Deductible Health Plan What is the High Deductible Health Plan with Health Savings Account (HDHP with HSA)? What are the differences between the HDHP with HSA and the Build-Your-Own (BYO) medical plan? I ve heard that it s risky to enroll in the HDHP with HSA because the deductible is so high. Is that true? I m concerned that the HDHP with HSA makes more sense for younger, healthier employees. Is this true? I ve heard that plans like the HDHP with HSA help employers and employees manage costs for the future. How does this work? I ve heard that I should look at the HDHP with HSA because I may be over-insuring myself under other plans. What does this mean? The Basics: The Health Savings Account What s the difference between an HSA and a Health Care Spending Account (HCSA) I ve heard that the HSA has a triple tax advantage. What does that mean? How the HDHP with HSA Works Who administers the HDHP with HSA? How can I contact them? Which in-network preventive services are eligible to be covered at 100%? What is the difference between my paycheck contributions and my deposits? How do the family deductible and the out-of-pocket maximum work for the HDHP with HSA? How do prescription drugs work with the HDHP with HSA? Does the HDHP with HSA have a mail-order prescription drug service? Are there different tiers of prescription drugs under the HDHP with HSA? Can I be enrolled in another medical plan while I m covered under the HDHP with HSA? If I enroll in the HDHP with HSA, can I also enroll in a dental plan? Can I participate in the DCSA while I m enrolled in the HDHP with HSA? Am I locked into the HDHP with HSA for all future years once I join and decide to contribute money to the HSA? If I enroll in the HDHP with HSA and elect not to contribute to an HSA, would the only deductions from my paycheck related to this plan be the contributions for participating in the plan? Suppose I am enrolled in the HDHP with HSA for 2011, and carry over money from my HSA into 2012, but I don t participate in the HDHP with HSA in Can I participate in the HCSA in 2012? If I go on COBRA, can I stop participating in the HDHP with HSA?

2 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment 2 How the Health Savings Account Works Frequently 2011 Annual Asked Enrollment Questions: HDHP with HSA 2012 Annual Enrollment Opening an HSA How do I sign up for an HSA? Do I have to use the bank that partners with my HDHP vendor to open my HSA? Contributing to an HSA When and how can I elect the amount I want to contribute per pay period to the HSA? What are the minimum and maximum amounts that I can contribute to my HSA? How can I change my elections during the year? What are HSA catch-up contributions? Why am I limited in how much I can deposit to my HSA? Can I deposit money directly into my HSA? How long does it take for my money to show up in my HSA? I would like to enroll in the HDHP with HSA and open an HSA, but am currently participating in the HCSA. Can I elect the HCSA again in 2012 while I am contributing to an HSA? Using an HSA How do I use the HSA to pay for eligible health care expenses? Is a debit card available for the HSA? How do I avoid ATM fees? Can I use the HSA to pay for dental and vision expenses? Can I use the HSA to pay for over-the-counter drugs? Can I use my HSA to reimburse expenses up to my total annual deposit? For example, if I ve elected to deposit $600 for the entire year, can I be reimbursed for $600 of expenses before the year is over? Can I pay myself back with money from my HSA for previous medical expenses incurred before the HSA was opened? I am currently enrolled in a BYO Plan and have an HCSA, but I am considering switching to the HDHP with HSA for If I have money left in my HCSA at the end of the plan year, and I incur a medical expense before March 15 of the following plan year, can I use the leftover money to reimburse the medical expense, rather than apply it to my HSA? Why is the HCSA limited use period in effect for 2011? Can the HSA be invested? What happens to the money in my HSA before I reach the minimum balance needed to invest the funds? Do I have to use the funds in the HSA by a certain time each year (i.e., does use it or lose it apply)? Do I have to use all of my HSA money by a certain age? Who can I use the funds in my HSA for? Is there a limit on the balance in my HSA? If I participate in the HDHP with HSA for one year, and then I switch to another plan or leave UTC, what happens to the balance in my HSA? If I leave UTC, how do I take the money in my HSA with me? Do I need to maintain a minimum balance to keep my HSA after I leave? If I go on COBRA, can I continue to make deposits to my HSA and use the money in my account to pay for eligible health care expenses? After I retire, can I still use the money in my HSA? If so, can I use it to pay for retiree medical contributions? Do the same audit rules that apply to the HCSA apply to the HSA? What happens to the money in my HSA if I die?

3 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment 3 High Deductible Health Plan with Health Savings Account The Basics: The High Deductible Health Plan Frequently 2011 Annual Asked Enrollment Questions: HDHP with HSA 2012 Annual Enrollment 1. What is the High Deductible Health Plan with Health Savings Account (HDHP with HSA)? 2. What are the differences between the HDHP with HSA and the Build- Your-Own (BYO) medical plan? 3. I ve heard that it s risky to enroll in the HDHP with HSA because the deductible is so high. Is that true? The best way to learn about this plan is to watch the I-Cast or listen to the podcast called Getting to Know: The HDHP with HSA available on Your Gateway. The HDHP with HSA offers the same valuable coverage as the Build-Your-Own Plan. The HDHP with HSA is made up of two components: the HDHP, which provides medical, prescription drug and mental health / substance abuse coverage and the HSA, an interestbearing bank account that allows you to build savings for future health care costs (such as in retirement) as well as offset current health care costs. Both medical plan options provide the same valuable coverage, but the HDHP with HSA promotes healthy behaviors and saving for the future. Not only does it cost you less out of your paycheck than any other medical option offered by UTC, but it s the only plan that allows you access to a Health Savings Account (or HSA), so you can save tax-free money for future health care expenses. Both plan options offer access to vendors that maintain national networks. For the HDHP with HSA, one health plan vendor administers medical, prescription drug and mental health / substance abuse benefits. For the BYO Plan, three separate health plan vendors administer medical, prescription drug and mental health / substance abuse benefits. For more on your vendors, refer to Your Gateway. To learn more about the differences between the HDHP with HSA and the BYO Plan, consider one of the following resources on Your Gateway: Use the Health Plan Comparison Chart and select up to three health care plans to see how they compare. Review these informative I-Casts/podcasts that dive deeper into how the plans work: Getting to Know: The HDHP with HSA Getting to Know: The Build-Your-Own (BYO) Plan Understanding My Annual Medical Costs, which explains the key components that make up your annual medical costs under both medical plans (i.e., your paycheck contributions, copays, deductible, coinsurance and your out-of-pocket maximum) Saving for the Future, which is a comparison of the Health Savings Account and the YSA (Your Spending Account - Health Care Spending Account) Refer to your E-Guide, a detailed resource describing the benefits available to you. Your E- Guide can be found under the Know your options & what s changing enrollment step. When you think about your out-of-pocket costs and the deductible that you must meet, you also need to consider the out-of-pocket maximum. It is your safety net it s the most money you would have to pay for health care services in a calendar year after you meet your deductible. After that, the plan pays 100% of the cost of covered health care expenses for the rest of the year. On the surface the deductible seems high, but the reality is that you save money in paycheck contributions and can instead use those funds towards any actual health care services you receive. Then, you can find added savings if you contribute tax-free dollars to an HSA and use those funds to pay for eligible health care expenses.

4 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment 4 4. I m concerned that the HDHP with HSA makes more sense for younger, healthier employees. Is this true? 5. I ve heard that plans like the HDHP with HSA help employers and employees manage costs for the future. How does this work? 6. I ve heard that I should look at the HDHP with HSA because I may be over-insuring myself under other plans. What does this mean? No, it s important to note that UTC s Frequently 2011 medical Annual options Asked Enrollment are Questions: designed to provide HDHP all with employees HSA with meaningful choices and flexibility 2012 in how Annual you receive Enrollment and consume health care services. You don t have to be young or healthy to find value in the HDHP with HSA. First, you re paying less out of your paycheck. You can instead use your money to pay for actual health care services you receive. Regardless of whether you rarely visit the doctor (beyond your annual physical) or you have a chronic condition that requires frequent care and medication, the HDHP with HSA provides comprehensive coverage with a capped exposure to financial risk (that is, your out-of-pocket maximum). Plus, it s the only plan that allows you access to a Health Savings Account, so you can save tax-free money for future health care expenses. It s true that participants in the HDHP with HSA take advantage of more preventive care, do a better job using low-cost prescriptions, and have a lower number of emergency room visits, and with the number of enrolled UTC participants increasing last year by 44%, it s clear that this is a plan that is gaining popularity. Consider taking a fresh look at the HDHP with HSA using all of the tools and resources on Your Gateway. And, be sure to hear a first-hand account of your colleague, Mark Reitsma s experience with the HDHP with HSA in the new Inspired Story, available on Your Gateway. High deductible health plans, like the HDHP with HSA, are designed to promote healthy behaviors and help employees save for the future. These plans help to slow the increase of health care costs by encouraging participants to stay healthy and avoid expensive treatment later on. For example, the HDHP with HSA encourages participants to seek preventive care, use generic medications, and generally stay healthier by visiting their regular doctor rather than the emergency room. Plus, the HDHP with HSA helps participants to plan for health care expenses in the future, including in retirement, by saving tax-free money in an HSA. And since the HDHP with HSA has lower contributions than UTC s other medical plan options, you can save money in your paycheck and instead contribute those funds to your HSA to use towards any actual health care services you receive. Choosing the most expensive medical plan just in case may seem like a good idea, but the truth is that you may be spending more than you need to on medical coverage. All of the UTC medical plan options provide the same valuable coverage and they all offer protection in the form of an out-of-pocket maximum. This means that a less expensive option may provide you with the coverage and security you need at a lower cost. The Basics: The Health Savings Account 7. What s the difference between an HSA and a Health Care Spending Account (HCSA) The simplest difference stems from the S in each account. The HCSA is a spending account where unspent dollars are forfeited at the end of the plan year, while the HSA is a savings account where unspent dollars roll over year-to-year and grow with tax-free interest. In addition, the funds in your HSA can be invested once you reach a certain minimum balance and the account is portable, so it is yours to keep even if you retire or leave UTC. If you enroll in the HDHP with HSA, you are eligible to open a Health Savings Account (HSA). If you enroll in the BYO Plan or elect no medical coverage, you cannot open an HSA and are only eligible to open a Health Care Spending Account (HCSA). For more information about how the HSA and HCSA differ, refer to the Saving for the Future: Comparing the HSA to the HCSA I-Cast and podcast on Your Gateway.

5 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment 5 8. I ve heard that the HSA has a triple tax advantage. What does that mean? The HSA allows you to build savings Frequently 2011 for Annual the future Asked Enrollment through Questions: a triple tax advantage. HDHP with Your HSA money is tax-free going in, as it earns income 2012 Annual and as you Enrollment spend it for qualified expenses. And, if you need it today, it s there for you with no tax penalty. How the HDHP with HSA Works 9. Who administers the HDHP with HSA? How can I contact them? 10. Which in-network preventive services are eligible to be covered at 100%? 11. What is the difference between my paycheck contributions and my deposits? 12. How do the family deductible and the out-of-pocket maximum work for the HDHP with HSA? 13. How do prescription drugs work with the HDHP with HSA? 14. Does the HDHP with HSA have a mail-order prescription drug service? 15. Are there different tiers of prescription drugs under the HDHP with HSA? 16. Can I be enrolled in another medical plan while I m covered under the HDHP with HSA? Health plan vendors vary by your home zip code. For more information about the vendors available to you, refer to the Medical Expense Estimator, available in the Compare your plan options enrollment step on Your Gateway. Preventive services for the HDHP with HSA are defined by the IRS. Eligible services include routine adult physicals (and related preventive screenings and tests), well-baby and well-child care (including immunizations up to age 17), and well-woman care. Whether a service is considered preventive also depends on how your health care provider codes the service. If you have questions about whether a service is preventive, please contact your health plan vendor or ask your health care provider how they will code the service. In our benefits communications, UTC uses the term paycheck contributions to refer to the amount you pay out of your paycheck for coverage under UTC s various benefits plans. The term deposits refers to the money that you put into your Health Savings Account (HSA), Health Care Spending Account (HCSA) or Dependent Care Spending Account (DCSA). For family coverage, there are no individual limits for the deductible or out-of-pocket maximum. This means that you must meet the family deductible before the plan starts paying anything towards your medical expenses, and you will continue to pay coinsurance until you meet the family out-of-pocket maximum. Prescription drug coverage for the HDHP with HSA is administered by the same health plan vendor that administers the medical coverage. Under the HDHP with HSA, prescription drug expenses count towards your annual deductible and out-of-pocket maximum. This means that you will pay the full cost of your prescriptions until you meet your plan s annual deductible. After you meet your deductible, you will pay coinsurance for your prescription drugs, until your out-ofpocket maximum is reached. Then the plan will pay 100% of the cost. You will not receive a separate prescription drug identification (ID) card. Instead, you should use your medical ID card for the HDHP with HSA when you purchase prescription drugs. Prescription drugs are available through retail pharmacies or through mail-order. Yes. The HDHP with HSA has a mail-order prescription drug service. You are encouraged to use mail-order services for maintenance medications. For more information, please visit the health plan s website. Yes. There are different tiers of prescription drugs under the HDHP with HSA. The tiers are generic, preferred brand-name and non-preferred brand-name. To learn more, look up the formularies on the health plan vendors' websites. No. You cannot be covered under any other plan, such as your spouse s plan or Medicare.

6 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment If I enroll in the HDHP with HSA, can I also enroll in a dental plan? 18. Can I participate in the DCSA while I m enrolled in the HDHP with HSA? 19. Am I locked into the HDHP with HSA for all future years once I join and decide to contribute money to the HSA? 20. If I enroll in the HDHP with HSA and elect not to contribute to an HSA, would the only deductions from my paycheck related to this plan be the contributions for participating in the plan? 21. Suppose I am enrolled in the HDHP with HSA for 2011, and carry over money from my HSA into 2012, but I don t participate in the HDHP with HSA in Can I participate in the HCSA in 2012? 22. If I go on COBRA, can I stop participating in the HDHP with HSA? Yes. You can be enrolled in the 2011 HDHP Annual with HSA Enrollment and a dental plan at the same time. You can use your HSA to pay for eligible dental expenses that your dental plan doesn t cover (e.g., orthodontia). Yes. You may participate in the DCSA regardless of your medical coverage. No. If you elect the HDHP with HSA, it will be your coverage for 2012, but you are not obligated to choose it in 2013 or beyond. You will not be locked into continuing your medical coverage under the HDHP with HSA after 2012 but, remember, you must actively change your coverage. Otherwise, you will default into your current coverage, unless it is no longer available. Please note that you must be enrolled in the HDHP with HSA to make contributions to an HSA. However, you may continue to use the money in your HSA to help pay for eligible health care expenses even if you are no longer enrolled in the HDHP with HSA. Yes. If you do not elect to contribute to your HSA, then the only amount deducted from your paycheck would be the contributions, if any, required for coverage under the HDHP with HSA. Yes. As long as you are not enrolled in an HDHP and eligible to contribute to an HSA, you can participate in the HCSA for 2012 while continuing to use money from your HSA for eligible health care expenses. (Remember, the tax-free dollars in an HSA roll over from year to year; unlike other tax-advantaged health care accounts, the HSA has no IRS use it or lose it rule. The dollars are yours until you decide to use them.) No. But you can opt out of the HDHP with HSA at the next Annual Enrollment period and choose another UTC option. How the Health Savings Account Works Opening an HSA 23. How do I sign up for an HSA? You may open an HSA with the bank that partners with your HDHP with HSA vendor or with any financial institution that offers an HSA. In order to have money deducted from your paycheck and sent to your HSA, you must open the HSA through the bank that partners with your health plan vendor. You may do so from Your Gateway during Annual Enrollment. After you open your HSA, the bank will send you a welcome kit. If you do not enroll online, but are eligible to open an HSA, you will receive an HSA enrollment kit from the bank that partners with your health plan vendor.

7 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment Do I have to use the bank that partners with my HDHP vendor to open my HSA? Contributing to an HSA 25. When and how can I elect the amount I want to contribute per pay period to the HSA? 26. What are the minimum and maximum amounts that I can contribute to my HSA? How can I change my elections during the year? 27. What are HSA catch-up contributions? 28. Why am I limited in how much I can deposit to my HSA? 2011 Annual Enrollment No. You may choose any banking institution that provides an HSA. However, UTC payroll will only be able to deduct pre-tax contributions from your paycheck for deposit into your HSA if you use the bank that partners with your HDHP vendor. Additionally, if you use your health plan vendor s partner for your HSA, UTC will pay the basic monthly account administration fee. If you choose a different bank, you may deposit money directly into your HSA. However, those funds will be after-tax money and you will have to claim the deposit on your individual tax return for tax-favored treatment. If you elect the HDHP with HSA when you enroll on Your Gateway, you will be prompted to enter the total amount you d like to contribute to your HSA. You will also be contacted by the financial institution working with your health plan vendor. In order to have money deducted from your paycheck and sent to your HSA, you must open the HSA through the bank that partners with your health plan vendor. Any health care claims incurred before you set up your account are not eligible to be reimbursed from your HSA. Therefore, you should be sure to open your HSA as part of your Annual Enrollment process. If, during the year, you need to change the amount you are contributing, you can do so by calling a UTC Benefits Center representative at from 8:00 a.m. to 9:00 p.m. Eastern Time (ET), Monday through Friday. You should contribute as much as you can to your HSA. After all, the HSA is the only savings vehicle that allows you to build savings for the future through a triple tax advantage, which includes tax-free contributions, earnings and withdrawals. Plus if you don t use the money this year, your account balance rolls over to help save for expenses next year or in the future (including in retirement). Be sure to change your election amount to take advantage of the increased IRS contribution limits for If you elect to cover only yourself under the HDHP with HSA, you can contribute up to $3,100 a year tax-free. If you elect to cover yourself plus at least one other person under the HDHP with HSA, you can contribute up to $6,250 a year tax-free. Once you are age 55, and each year thereafter, you are eligible to make an additional annual tax-free "catch-up" contribution of up to $1,000 to your HSA for that year. There are no minimum contribution amounts. If, during the year, you need to change the amount you are contributing, you can do so by calling a UTC Benefits Center representative at from 8:00 a.m. to 9:00 p.m. Eastern Time (ET), Monday through Friday. Once you are age 55, and each year thereafter, you are eligible to make an additional annual tax-free "catch-up" contribution of up to $1,000 to your HSA for that year. However, these contributions will be after-tax money that you deposit directly into the account. You will have to claim the deposit on your individual tax return to receive the benefits of a pre-tax deposit. The IRS regulates how much money you can deposit into your HSA each year.

8 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment Can I deposit money directly into my HSA? 30. How long does it take for my money to show up in my HSA? 31. I would like to enroll in the HDHP with HSA and open an HSA, but am currently participating in the HCSA. Can I elect the HCSA again in 2012 while I am contributing to an HSA? Using an HSA 32. How do I use the HSA to pay for eligible health care expenses? 33. Is a debit card available for the HSA? Yes. You may deposit money directly 2011 into Annual your HSA Enrollment in addition to making deposits through payroll deductions up to the annual IRS contribution limit. However, those funds will be after-tax money and you will have to claim the deposit on your individual tax return to receive the benefits of a pre-tax deposit. Money withheld from your paycheck is wired to your HSA bank and deposited into your HSA within three to five business days. The current process includes three hand-offs and reconciliation steps before the funding can occur. UTC holds the contributions until the money transfer can occur. No. The IRS does not permit you to contribute to both an HSA and an HCSA (and since both accounts cover the same eligible expenses, there would be no reason to contribute to both). If you are currently participating in the HCSA in 2011, you may still enroll in the HDHP with HSA for 2012, as long as you don t enroll in the HCSA for Please note if you currently participate in the HCSA and you have money left in your account on December 31, 2011, you have until March 15, 2012, to use the money on dental and vision expenses only (not medical expenses) even if you have enrolled in the HDHP with HSA for You have until April 15, 2012, to submit all claims for reimbursement from your HCSA. Your HSA allows you to pay with a debit card or check at the point of service, upon receipt of a bill, or to reimburse yourself. There may be other options available; please check with your financial institution. It is important to note that the HSA is a bank account so you can only access HSA funds that are actually in the account. Yes. Your financial institution will provide one debit card automatically. If you would like a debit card for a second cardholder, you may request one through Your Gateway when opening your account. 34. How do I avoid ATM fees? You can avoid incurring ATM fees by only using your debit card at the point of service or at the issuing financial institutions ATMs. 35. Can I use the HSA to pay for dental and vision expenses? 36. Can I use the HSA to pay for overthe-counter drugs? 37. Can I use my HSA to reimburse expenses up to my total annual deposit? For example, if I ve elected to deposit $600 for the entire year, can I be reimbursed for $600 of expenses before the year is over? Yes. Eligible dental and vision expenses can be reimbursed from the HSA. The same types of eligible dental and vision expenses that can be reimbursed from the HCSA are eligible to be paid with your HSA. No. Over-the-counter medications are not considered to be an eligible expense for an HSA unless you have a doctor s prescription. No. For the HSA, you may only be reimbursed up to the amount of money you have in the account at the time. This is different from the way the HCSA works. Once a deposit is made to your HSA, you may begin using those funds immediately to pay for eligible health care expenses.

9 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment Can I pay myself back with money from my HSA for previous medical expenses incurred before the HSA was opened? 39. I am currently enrolled in a BYO Plan and have an HCSA, but I am considering switching to the HDHP with HSA for Annual Enrollment No. You can only pay yourself back with money from your HSA for medical expenses you incurred after the HSA was opened. No. However, you may use any money remaining in your HCSA at the end of 2011 for eligible dental and vision expenses that are incurred during the limited use period that runs from January 1 through March 15, If I have money left in my HCSA at the end of the plan year, and I incur a medical expense before March 15 of the following plan year, can I use the leftover money to reimburse the medical expense, rather than apply it to my HSA? 40. Why is the HCSA limited use period in effect for 2011? The IRS requires that a company must impose this limitation for all participants in a plan that offers a High Deductible Health Plan with a Health Savings Account. 41. Can the HSA be invested? Yes. Once the balance in the HSA reaches the minimum level required by your HSA bank, you can invest your money in one of the investment vehicles your financial institution offers. The investment options and minimum investment amounts differ by financial institution. Please check with your financial institution for more information. 42. What happens to the money in my HSA before I reach the minimum balance needed to invest the funds? 43. Do I have to use the funds in the HSA by a certain time each year (i.e., does use it or lose it apply)? 44. Do I have to use all of my HSA money by a certain age? 45. Who can I use the funds in my HSA for? 46. Is there a limit on the balance in my HSA? Before you reach the minimum balance for investing, your HSA balance will accumulate taxfree interest. No. You do not have to use the funds in the HSA by a certain deadline, as you would for an HCSA. If you don t use your total balance during the year, you can just carry it over to the next year. You can continue to use the money in the HSA for health care expenses in future years, even if you leave UTC. No. There is no age limit related to using the money in your HSA. You can use the funds in your HSA to pay for eligible expenses for yourself and your tax dependents. If your adult child is covered under your HDHP with HSA, but is not your tax dependent, you may not use the money in your HSA to pay for their medical expenses. No. There is no limit on how much money you can have in your HSA, only a limit on how much you can contribute each year.

10 Frequently Asked Questions (HDHP with HSA) 2012 Annual Enrollment If I participate in the HDHP with HSA for one year, and then I switch to another plan or leave UTC, what happens to the balance in my HSA? 48. If I leave UTC, how do I take the money in my HSA with me? Do I need to maintain a minimum balance to keep my HSA after I leave? 49. If I go on COBRA, can I continue to make deposits to my HSA and use the money in my account to pay for eligible health care expenses? 50. After I retire, can I still use the money in my HSA? If so, can I use it to pay for retiree medical contributions? 51. Do the same audit rules that apply to the HCSA apply to the HSA? 52. What happens to the money in my HSA if I die? 2011 Annual Enrollment The HSA is a separate bank account that you set up with a financial institution. If you stop participating in the HDHP with HSA or leave UTC, the account (and any money in it) is still yours. You may need to contact your financial institution to find out the terms of using your HSA going forward. Your HSA is an actual bank account. This means that if you change health plans, retire from the Company or leave UTC, your money goes with you. If you wish to keep your account open with your current financial institution, you will need to work with the financial institution that administers your HSA to find out the rules (and any applicable fees) that apply for keeping the account open. You can also roll your HSA over to your new employer's HSA or to one you set up independently. Each financial institution has different requirements when it comes to minimum balances. Yes. You can continue making deposits to your HSA on an after-tax basis, and then deduct your deposits when you prepare your tax return. You can also continue to use your HSA to pay for eligible health care expenses. Yes. The HSA is designed to allow you to save for future health care expenses, including in retirement. You have the option of using money in your HSA to pay for eligible services today, or paying for the services out of your pocket and saving the money in your HSA for the future. When you retire, you may use the money in your HSA to offset retiree medical expenses, eligible health care expenses and certain other contributions, including insurance premiums (other than premiums for Medicare supplemental policies, such as Medigap) if you re 65 or older. No. UTC does not audit or substantiate how you use the money in your HSA. The IRS may ask for proof that the money in your HSA was used for eligible medical expenses. Therefore, you should keep records to show that HSA funds were used properly. It is important to note that if you are under age 65 and use your HSA to pay for an ineligible expense, that amount is subject to regular income taxes plus a penalty. Currently, if HSA funds are used for something other than eligible expenses, the amount is subject to regular income taxes plus a 20% tax penalty. If you are age 65 or older at the time you withdraw money for an ineligible expense, the tax penalty is waived. You designate a beneficiary when you set up your HSA. If your spouse is your designated beneficiary, the HSA will be treated as your spouse s HSA after your death. If your spouse is not the designated beneficiary, the account stops being an HSA, and the fair market value of the HSA becomes taxable to the beneficiary in the year that you die.