Getting Started With Your New HSA

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1 HSA Guide Getting Started With Your New HSA Your qualified high-deductible health plan allows you to participate in a Health Savings Account, or HSA. Participation in an HSA has many benefits: 100% tax deductible Owned by the individual Portable, remaining with an employee regardless of employment Roll over from year to year and earn interest free from Federal and FICA tax Can be invested, supplementing your retirement income You can use an HSA to pay for many healthcare expenses tax-free - see the What s Eligible? page of this guide for examples. You can also choose to invest your HSA in a number of mutual funds, earning interest to pay for future medical expenses, or to save toward retirement. The following pages will give you more information about an HSA, and about how to sign up for your account.

2 VALID THRU CARD About Your HSA A Health Savings Account (HSA) is a tax-free savings account in which you accumulate savings to pay for qualified expenses. It is used in conjunction with a High-Deductible Health Plan (HDHP). You can use the funds in the account for qualified medical expenses until the deductible has been met; at that point, your insurance coverage begins. You can also use the funds for dental, vision, and other services that may not be covered under the high-deductible health insurance policy. Contributions to your HSA are tax deductible, and income earned on funds in the HSA grows tax-deferred. Your HSA may also be invested into a number of mutual funds, allowing you to invest tax-free to save for either retirement or qualified expenses. You and/or your employer can make contributions to your HSA (both of you can contribute in the same tax year), and all contributions are tax-deductible. For individuals age 55 and up, "catch-up" contributions up to $1,000/year are allowed. Contributions must stop once an individual is enrolled in Medicare. Maximum Contribution Limits for 2018 Individual Coverage $3,450 Family Coverage $6,900 The IRS states that you must keep records for all distributions from your HSA. These records must be sufficient to show that any distributions from your HSA were exclusively used to pay for or reimburse qualified medical expenses (see the What s Eligible? page of this guide for examples of qualified expenses); that the qualified medical expenses had not been previously paid or reimbursed from another source; and that the medical expenses had not been taken as an itemized deduction on a tax return. You may maintain these records yourself, or you can use the ClaimsVault feature of your HSA account to conveniently keep copies of your documentation. You ll find more information on the ClaimsVault later in this guide. Qualified medical expenses can be incurred by you and/or your eligible dependents. Medical expenses incurred before your HSA was established are not qualified. When you enroll in an HSA, you can request an HSA debit card to pay for eligible expenses directly from your account. Your HSA Card is a MasterCard limited merchant category card. It is designed to work at merchants with a health-care merchant category code, such as a doctor s office or hospital. The card will also work at retail merchants which have an Inventory Information Approval System (IIAS) in place. The IIAS will provide automatic adjudication at the point of sale for HSA-eligible items; this means you can only purchase eligible items with your card at these locations. Per IRS requirements, you should always keep your receipts on file for any purchases made with your HSA card. mys URCE J Q PARTICIPANT HSATODAY 09/17 Important Notes About Your HSA Card: Save your receipts! The IRS requires that you keep them on file in case of an audit. Your card will be mailed to the address you entered at time of enrollment. Your card is for HSA-eligible expenses only.

3 What s Eligible? This is a sample list of qualified medical expenses based upon IRS Publication 969 and IRS Publication 502. Please consult these publications for more details. These publications can be found on the IRS website: Qualified Expenses Acupuncture Ambulance Artificial limbs Artificial teeth Automobile modifications (hand controls, lifts, etc.) Bandages Birth control Blood pressure monitor Braille books & magazines Care for mental handicap Chiropractors Copays, deductibles, & coinsurance Contact lenses & supplies Contraception Costs for physical/mental illness Crutches Deductible, all family members Dentist fees (if not cosmetic: e.g., teeth whitening is a non-reimbursable expense) Dentures Diagnostic fees Diagnostic devices Drug & alcohol addiction treatment Drug & medical supplies Eyeglasses, incl. exam fee Guide dog Handicapped persons' schools Hearing devices & batteries Insulin Insurance premiums, in some cases: - Long-term care insurance - Health care continuation coverage (COBRA) -Health care coverage while receiving unemployment compensation -Medicare and other health care coverage if you are over 65 (excluding Medicare supplemental policies such as Medigap) Laboratory fees Lactation expenses Laser eye surgery Learning disability - special school fees Obstetrical expenses (after services have been performed) Operations (medically necessary) Orthodontia (special rules apply; see Orthotics/Orthopedic shoe inserts Osteopath fees (licensed) Oxygen Physical therapy Physician fees Practical nurse fees Prescribed medicine (if not cosmetic; hair-loss medications are not reimbursable) Psychiatrist's care Psychologist's fees Routine physicals Smoking cessation (non-drug programs) Special communications equipment for the deaf Special education for the blind Surgical fees Transportation expenses for medical service Tubal ligation Tuition at special school for the handicapped Vasectomy Wheelchair X-rays OTC Drugs and Medicines: Eligible with a Prescription Over-the-counter drugs and medicines require a prescription for HSA eligibility. The prescription must be written by a physician on an official prescription pad and must include the name of the patient, the specific OTC drug or medicine, and the number of refills or duration of treatment. Keep a copy of the prescription and a receipt for purchase of the product with your records. Acid control medication (Prevacid, Prilosec, Zantac, etc.) Acne treatment Allergy medication (Zyrtec, Claritin, etc.) Antacids (Tums, etc.) Anti-itch medication Cold medication Cough drops Nicotine patches or gum Pain relievers (Advil, Tylenol, etc.) Sleep aid medication Stomach remedies (Pepto-Bismol, etc.) An example prescription for an Over-the-Counter medicine: John Smith 37 Zyrtec daily for 3 months Jane Doe, MD 1/3/15 EXAMPLE Eligible with a Letter of Medical Necessity These items may be eligible if accompanied by a note from a doctor recommending the item to treat a specific medical condition. Consult your tax advisor for more information. Cord blood storage Home improvements for medical conditions Nutritionist Orthopedic shoes (not mass-produced) Vitamins & nutritional supplements (only if recommended by a doctor for a specific medical condition) Weight loss to treat existing disease Wigs Not Eligible Cosmetic surgery (unless restorative) Finance charges Food Imported drugs (Canada, Mexico) Insurance premiums for individual policies Long-term care expenses Marriage counseling Missed appointment fees Personal hygiene products Spa fees Teeth whitening Toothbrushes Warranties

4 Setting up your HSA In your web browser, go to This is a secure website, so all the information you enter will be protected. Click the green Enroll Now! button on the right. Select Yes on the right to each of the four questions about current health insurance coverage, Medicare status, and tax dependent status, then click the green Continue button. (If you cannot accurately answer Yes to all four questions, select Cancel instead and see your Plan Service Provider for more information.)

5 Setting up your HSA (continued) On the next screen, enter your Employer Code (received separately, or request from ProBenefits or your HR department). Enter additional information as requested to create your Login ID and password, then click the green Continue button. On the next page you will enter some additional contact information, and then you will proceed through setting up your new HSA. Some notes on contribution methods and debit cards: - Contributions can be made post-tax, pre-tax, or both. To make post-tax contributions directly from a checking or savings account, select "Direct Distribution and Contribution" and provide bank account information. - To request a linked debit card, check the box to verify agreement and provide name(s) to be put on the cards. Receive up to two cards at no charge. Names on cards cannot be identical. Review your information and selections. To make any changes, click the green "Edit this Section" link next to the information you want to revise. When everything is correct, click the green I Agree button. Once approved, you will receive an with instructions on how to activate your new account.

6 Accessing Your Account To log in and manage your account after it is set up, go to MyHSAToday.com, and enter your login ID and password in the upper right corner. Here you can manage your investments, store claim documentation in the ClaimsVault, take a withdrawal, retrieve your year-end tax information, view your recent transactions, and more.

7 The ClaimsVault The IRS requires you to keep records for all distributions from your HSA in case of audit. Your account on MyHSAToday.com has a convenient feature called the ClaimsVault to help you keep up with this documentation. After you login to your account at MyHSAToday.com, click on the link for ClaimsVault in the top menu bar, and choose Add an Expense. From there you can enter details about your qualified expense, and choose to either upload a scanned copy of your documentation, or fax it in with the provided cover sheet. You can use the ClaimsVault to store documentation for purchases made with your HSA card, and for HSA distributions you have taken to reimburse yourself for qualified expenses paid out-of-pocket. You can also use the ClaimsVault to bank documentation for qualified expenses that you have paid out-of-pocket and for which you have not yet taken a distribution, so that your invested funds can continue to earn interest.

8 Guidelines & Disclaimers HSA Eligibility Guidelines: - You must be enrolled in a qualified High Deductible Health Plan. High Deductible Health Plan Limits for 2018 Minimum Annual Deductible Out-of-Pocket Maximum Individual Coverage Family Coverage $1,350 $2,700 $6,650 $13,300 - You cannot be claimed as a Tax Dependent. - You cannot be enrolled in Medicare or covered under any other type of insurance plan. This includes plans that your spouse may be enrolled in such as other group health plans, Flexible Spending Accounts (FSAs), or Health Reimbursement Accounts (HRAs). - If you are unsure about your eligibility, please consult your tax advisor or IRS publication 969. Important Information about HSAs: - Ineligible withdrawals are subject to income tax plus an additional 20% tax unless the account holder is 65 or older, is disabled, or dies. - Domestic Partners of the account holder must set up a separate account and may contribute up to the family limit; the account holder cannot use their account to pay a Domestic Partner's expenses. - All participants are responsible for retaining the proper documentation to verify the eligibility of a distribution. - All participants must file an 8889 form with their taxes. - Contribution Limits assume the account holder is eligible for the entire tax year. If the account holder is not eligible for the entire tax year they can still contribute the maximum as long as they remain eligible for the entire following tax year (through December 31); otherwise, they will be taxed plus a 10% penalty on a prorated amount of the contribution. - Contributions can be made up to the day federal income taxes are due for the previous plan year. - The HSA incurs a monthly fee of $3.50; if an employer is paying the fee and the participant terminates employment, the fee will be drafted from the HSA balance on a monthly basis following the termination. - The HSA may be required to maintain a minimum balance of $10. If the balance falls below this minimum, the account may be closed and applicable account closing fees will apply. Please contact ProBenefits if you have questions.