Welcome to today s webinar Making the Most of your HSA. You may have recently enrolled in a high deductible health plan and opened a health savings account also known as an HSA. Or perhaps you are considering opening one and are wondering what you need to know once you open an account. Over the next few minutes, we ll discuss the top 10 things you need to know about your HSA, including how to manage your account, tax savings, the importance of designating a beneficiary, and using your Optum Payment Card. 1
Today we re going to become more familiar with what an HSA is, ten important things to know about your HSA, and the importance of preparing for health care expenses in retirement. 2
What exactly is a health savings account, also known as an HSA? An HSA is an individually owned savings account offering a tax advantaged means to save for health care expenses both now and in the future. An HSA works like this: 1. First you open an account and deposit money into it. The money is deposited into the account pre tax and the funds belong to you even funds contributed by your employer. If you change jobs or health plans, the money is still yours to keep. 2. Next, you save on taxes. The money goes in tax free, it grows tax free and comes out tax free when spent on qualified medical expenses. 3. Your HSA funds can be used to pay for qualified medical expenses for you, your spouse, and your tax dependents. 4. Lastly, you may invest a portion of your HSA dollars in mutual funds once your account balance reaches the minimum investment threshold. Note that investments are not FDIC insured, are not guaranteed by Optum Bank, and may lose value. 3
Today, we will be covering ten important steps when owning an HSA. These steps will help you feel more comfortable opening, contributing, using, and managing your HSA. 4
The first thing you need to do is to open an HSA. In your instance, your employer will open your HSA account on your behalf. A Welcome Kit will be provided to you by mail after your account is opened and you will be directed to log in and activate this account online. 5
After your account is opened, you ll want to access it online. Go to mycdh.optum.com and click participant log in. You ll then need to create your username, password and security questions. When you log into the account for the first time, you ll also need to register your account by entering your social security number, date of birth and your last name. Your Optum HSA allows you to make deposits, pay bills, check your balance, view your monthly statement and much more. There are a variety of extra tools and resources to help you plan and save for health care as well. You can find tax information and take the Health Savings Checkup to learn how your health could affect your wallet in the future. Remember to keep all of your medical receipts as well as tax documents you receive from Optum for filing your tax returns and maintaining your records. 6
mycdh also has a mobile app that makes using your HSA even more convenient. The app allows you to submit claims, make contributions, view account messages, use the Expense Tracker tool to manage your expenses, access account details, and more. Download the mycdh by Optum app to manage your accounts on the go. Look for the icon shown on the screen within the itunes and Google Plays stores by searching mycdh by Optum. 7
The IRS sets annual contribution limits for how much you can contribute to an HSA in a calendar year. For 2017, the limits are $3,400 for individual coverage and remain $6,750 for family coverage. For those that are 55 years of age or older, you can deposit up to an additional $1,000 annually as a "catch up" contribution. These are meant to help you further prepare for health care costs in retirement. You are responsible for monitoring the amount deposited into your HSA each calendar year. Keep in mind that if your employer contributes funds, those also count towards the maximum. If you exceed the maximum contribution limit, there is penalty imposed by the IRS. 8
With a high deductible health plan, it's important to save money in your HSA so you'll have money when you need it to pay for qualified medical expenses, including your deductible. You may start contributing to your HSA once your qualifying highdeductible health plan becomes effective. The easiest way to fund your account if your employer offers it, is by having an amount deducted regularly from your paycheck; also referred to as payroll deduction. You can also log into your account and make a one time deposit or recurring deposits from another bank account. 9
The next thing you ll want to understand is the tax savings that comes with an HSA. There are 3 ways to save on taxes: 1) The money you contribute is tax deductible. 2) Then, your savings grow tax free. 3) And any money you take out to pay for qualified medical expenses is untaxed. To take it a step further, let s say you re on an family plan and contribute $5,000 to your HSA throughout the year. If we assume your federal tax bracket is 25%, your state tax bracket is 5%, and, you live in a state that does not tax HSA contributions. You ll save $1,250 in federal taxes, $383 in FICA (or social security) tax and $250 in state taxes, for a total savings of $1,883. 10
When it comes to using your HSA, be sure you get to know the list of qualified medical expenses. The list can be found at mycdh.optum.com or IRS.gov. You d be surprised to know that you can use your HSA funds for a wide variety of expenses, including your health plan deductible, prescription medications, doctors office visits, dental and vision care, and more. In addition to using your HSA funds for your own qualified medical expenses, you can also use them to pay for qualified medical expenses for your spouse or tax dependents, even if they are not covered by your high deductible health plan. Always remember to save your receipts! In the unlikely event that you are audited during tax time, the IRS will want verification that all spending from your HSA was used for qualified medical expenses. Optum s Expense Tracker is a helpful tool that allows you to consolidate and manage your health care bills. Simply enter your expenses, track and categorize them, and securely upload a receipt. Just log in to your account to get started. If you use your HSA funds for non qualified expenses, the IRS will charge an additional 20% tax penalty. If you are over the age of 65, however, you are not restricted to spending your HSA funds on qualified medical expenses. The 20% tax penalty no longer applies, although you will be required to pay ordinary income tax 11
on all non qualified medical expenses. 11
There are 3 ways to pay with your HSA: First, you can use your Optum Payment Card. Your card will arrive approximately ten business days after your account has been opened. The debit card is one of the easiest ways to access your funds and can be used most places that accept MasterCard. This includes qualified medical expenses incurred at the dentist, chiropractor, orthodontist, and the pharmacy. If you need another debit card for a spouse or dependent, you can request additional debit cards by logging into your account at mycdh.optum.com. If your card is ever lost or stolen, call Optum Customer Service toll free to get a new card free of charge. Online bill payment is another option for paying with an HSA. After logging into your account at mycdh.optum.com, you can send payments directly to your health care providers, pharmacy, or other payees. Additionally, you can set up recurring payments for expenses through this online feature. You can also choose to pay for qualified medical expenses out of pocket, and then reimburse yourself. Reimbursements can be done by accessing your account online and requesting an ACH or check reimbursement. 12
Similar to other bank accounts, it's important to designate a beneficiary to direct where your funds go in the event of your death. If no beneficiary is designated, the HSA will go to your spouse, if you have one, otherwise, your money becomes part of your estate and may not be immediately available for qualified family medical expenses. It may also be subject to taxation. It is important to keep your beneficiary information up to date. Log in to your account at mycdh.optum.com, click the Profile tab, and then click Add Beneficiary to fill out the online form. You can also download the HSA Beneficiary form the Tools & Support tab to manually submit. 13
The 9 th step is to manage your account frequently, similar to other bank accounts you may have. After all, an HSA is a bank account for your health care expenses. Utilize the numerous online features by logging in to your account at mycdh.optum.com. Here, you have the ability to pay bills, make deposits, reimbursement yourself, and manage investments. mycdh also has a variety of tools and resources to help you plan and save for health care, including the Expense Tracker. Remember to periodically check your statements and account activity to ensure fraudulent activity hasn t occurred. Contact Optum if any questions should arise. 14
The final step when owning an HSA is to continually grow your savings. When it comes to saving money, it s important to start early, make regular deposits and set a goal every year. Not only will your deposits grow, but your tax savings will too. Every dollar you put into your HSA up to the contribution limit, is federal income tax free. Meet Heather, she contributes $150 per month to her HSA, which adds up to $1,800 in annual contributions. Heather decides to pay for all of her medical expenses out of pocket. After five years, she will have $9,000 saved in her HSA. After twenty five years, her savings will have grown to $45,000. These funds she has saved can be used to pay for qualified medical expenses both now and in retirement. 15
Did you know that health care expenses are one of peoples top financial worries for retirement? They might be yours, too. Estimating health care costs whether its for tomorrow, five years from now or in retirement - remains somewhat of a mystery for both individuals and their financial advisors. Many people plan using publicized averages, but few know what their individual costs could be, based on their own health. Even fewer are likely to know how making choices to live a healthier life today may decrease their costs in the future. 16
Using the Health Savings Checkup you can see how specific conditions will affect your health care costs in retirement. You simply take a few minutes to answer some basic questions about yourself, your retirement goals, health and finances. Then, you get a snapshot of your potential retirement health care costs, based on what you reported about your health. 17
After taking the Health Savings Checkup, you ll get a personalized action plan with suggestions to help live a healthier lifestyle, lower your future health care costs and maximize your health savings. The Health Savings Check up provides an estimate of your medical expenses during retirement, how much of these expenses Medicare will cover, and the resulting balance that you will need to provide to make up the difference. 18
You can access the health savings checkup tool at mycdh.optum.com by clicking on the Health care Toolbox tab Don t worry, If you re not currently enrolled in an HSA, you can still utilize this tool by visiting HealthSavingsCheckup.com. 19
As a recap, there are ten important steps when owning an HSA. These steps including opening your account, accessing your account online, contributing to your HSA, using your HSA to pay for qualified medical expenses and managing your account with the help of the many tools available at mycdh.optum.com. Each of these steps help you make the most of your HSA. 20
If you have questions that come up later, visit mycdh.optum.com. The website contains lots of easy to use information, frequently asked questions, and tools to help you better understand your HSA. Thank you again for attending our webinar, Making the Most of your HSA. We hope you have a great day. 21