State of Wisconsin Health Savings Accounts (HSA) 101

State of Wisconsin Health Savings Accounts (HSA) 101

Agenda General Information Benefits Eligibility Information HSA Limits Qualified Dependents Eligible/Ineligible Expenses Limited FSA Participant Responsibilities Enrollment IDV Process Beneficiaries Contributions Distributions Investments Election Changes Termination/Retirement/Death TASC Online Account TASC Mobile App Forms TASC Resources/Customer Care

General Information Health Savings Account Commonly referred to as HSA Use pretax money to pay for eligible expenses Employee owned bank account, portable Required for employees who are enrolled in a State of Wisconsin High-Deductible Health Plan HSA Enrollment Eligibility Covered by a qualified High-Deductible Health Plan (HDHP) Have no other health coverage except for permitted coverage (accidental, dental or vision coverage) Not covered by TRICARE Not enrolled in Medicare Cannot be claimed as dependent on someone else s tax return (spouse is excluded) If enrolled in VA Benefits, have not accessed benefits within the past 90 days.

Benefits of HSA Program Benefits of HSA program State of Wisconsin Premium Savings Tax Savings Save on employer taxes Used to help offset the costs of administration Additional benefit help retain and attract employees Participants Triple Tax savings Pre-tax Contributions Tax-free Distributions Tax-free Investment Earnings Portable No Use-It-Or-Lose-It Flexible Premium savings Provides great savings tool for health care expenses and retirement.

HDHP Plan Limits 2017 2016 HDHP Min Annual Deductible Individual $1,300 $1,300 HDHP Min Annual Deductible Family $2,600 $2,600 HDHP Out of Pocket Max Individual $6,550 $6,550 HDHP Out of Pocket Max Family $13,100 $13,100

HSA Plan Limits 2017 2016 HSA Max Contribution Limit Single $3,400 $3,350 HSA Max Contribution Limit Family $6,750 $6,750 HSA Catch-Up Contribution Limit $1,000 $1,000

Qualified Dependents HSA participants may use funds for any spouse or tax dependent from their HSA. Qualified Dependents spouse qualifying child qualifying relative Qualifying Child: eligible through the end of the calendar year in which they turn 24 Divorce: eligible child of divorced parents is a dependent of both, only 1 can submit expense for reimbursement Domestic Partner: expenses incurred by domestic partners would not be eligible since they are not considered spouses for federal tax purposes.

Eligible/Ineligible Expenses Eligible Expenses Co-pays and deductibles Medical office visits Prescription drugs Dental/orthodontia care Vision care Vaccinations Smoking cessation programs Mileage to-from doctor appointments Ineligible Expenses Insurance premiums* Cosmetic procedures Personal hygiene products Vitamins/supplements Diet products/food Health club fees OTC medicine and drugs require a prescription to be eligible for reimbursement. For a complete list of eligible expenses, visit the irs.gov website *Exceptions for COBRA continuation coverage. In addition, if you re age 65 or older, Medicare premiums are considered qualified medical expenses.

Limited Purpose FSA An employee may not have a FSA and a HSA; however HSAs can be run in conjunction with a Limited Purpose Flex Spending Account (LPFSA) LPFSA only allows payment for dental, vision and post deductible expenses. The benefit to having both accounts is to maximize the savings amounts each year. Participant uses their LPFSA for the $500 glasses and allowing them to save their HSA funds for future expenses and still get the tax savings on the glasses. Easy to manage as both LPFSA and HSA use same system and same TASC Card. How it works If claim is eligible for both LPFSA and HSA Claim will be paid from LPFSA until funds exhausted Once funds are exhausted, claim will be paid from HSA If claim is only eligible for HSA Claim will be paid from HSA

HSA Participant Responsibilities Maintain Eligibility Enrollment in HDHP and no other medical coverage. Enrollment in a Limited Purpose FSA only Receipts/Documentation Keep all documents/receipts for expenses in case of audit by IRS Keep all documents related to any HSA transfers File any necessary tax documents 1099 available by January 31 5498 available by May 31 Monitor Contributions Ensure contributions do not exceed the IRS maximums. Submit necessary corrections in event contributions exceed limits Contact Information Maintain up-to-date contact information (email, mailing addresses, phone numbers, etc.) Designate Beneficiaries and maintain up-to-date contact information Adhere to Plan Rules Eligible expenses only Expense was for eligible plan participant (includes dependents) Expense was not been previously reimbursed under any benefit plan

Enrollment Open Enrollment Employees must enroll (and must re-enroll) during the annual open enrollment period. 2017 Open Enrollment Dates: October 17 November 11, 2016 Open Enrollment Training to be scheduled at end of September More information regarding the 2017 Open Enrollment coming soon!

Enrollment Newly Hired/Eligible Employees Enrollment Deadline 30 days following the date of hire/eligibility Enrollment Effective Date The first of the month following the new enrollment/change of enrollment. First Contribution Date: Dependent on payroll cutoff date and Date payroll/benefits office notified of enrollment TASC Enrollment Process Enrollment is verified/processed by payroll/benefit staff Enrollment is sent to TASC TASC processes the enrollment, performs the IDV search and participant receives Enrollment confirmation and welcome letter via email (if email on file) or mail (if no email on file) TASC Card will be mailed to participants home address within 7-10 business days. TASC Card will be delivered in an unmarked, plain white envelope.

Identity Verification (IDV) Process US Patriot Act Bill signed into law 2001 requires all financial institutions verify the identity of anyone who opens an account. TASC IDV Process Upon enrollment into the TASC HSA, a database identity verification is conducted. If the identity verified, an HSA account is opened. If the identify is not verified, TASC notifies the HSA participant and payroll center contact via secure email within 24-48 hours. HSA participant has 90 days to provide necessary documentation based on the reason for the identity failure. If not resolved, HSA account will not be opened and HDHP enrollment will be invalidated and employee will revert to a non-hdhp. Funds will be returned to Payroll Center so they can refund the employee and employer. IDV process is done upon initial enrollment of the HSA and will not be done a second time unless there is a name change or change in SSN.

Identity Verification (IDV) Process IDV Notifications TASC will provide up to three IDV notifications to HSA participants via secure email. Payroll center is copied on notifications. 1 st notification: within 24-48 hours of enrollment 2 nd notification: 1 week prior to 90 day deadline 3 rd and final notification: on the 90 day deadline The notification provides the reason for the failure and what action/information is needed to resolve the failure. Acceptable Documentation Address Validation: a driver s license, state identification, bank statement, or current phone or utility bill. Social Security Number (SSN): a social security card. Date of Birth: a driver s license, passport, birth certificate or state identification. Name Validation: a social security card, passport, birth certificate, marriage certificate, divorce decree, legal name change certificate, or state identification. Submitting Documentation to TASC: Email: Reply to the secure email and include scanned copies of the documents. Fax: Scan and fax to 608-245-3623 Attn: Angela Kippert

Beneficiaries Participants should identify beneficiary indicating who should receive their HSA account upon their death. Two options to provide beneficiary information: Via TASC Online Account Submit Beneficiary Change/Spouse Consent Form to TASC If participant is married and selects someone other than spouse as beneficiary, federal law requires the spouse s signature. Use the Beneficiary Change/Spouse Consent Form and submit to TASC Beneficiary information can be changed at any time.

Contributions Contribution Limits: HSA Max Contribution Limit Single 2017: $3,400 2016: $3,350 HSA Max Contribution Limit Family 2017: $6,750 2016: $6,750 HSA Catch-Up Contribution Limit $1,000 Catch Up Contribution: Participant s age 55 or older eligible for an additional $1,000 contribution. Limit is automatically adjusted based on participant s date of birth. Catch Up Contribution can be made any time during the year you turn 55. Special Rule for Married Individuals: Married, 1 or both have family coverage most divide contributions to total the maximum contribution limit for family. Married both have single coverage both can contribute up to the maximum contribution for single coverage. Catch up Contribution is not included, they can each contribute up to $1,000 additional.

Contributions Types of Contributions: Pre-Tax Payroll Deductions Available within 24-48 hours of pay date Employer Contributions Available within 24-48 hours of contribution date Direct Deposit via TASC Online Account Available within 2 business days Check Payment sent to TASC Available within 2 business days after payment received Contribution Tips: Anyone can make contributions into participant s HSA account. Contributions may be made until April 15 for the prior calendar year. Regardless of who makes the contributions, the participant receives the tax benefit and is subject to the maximum contribution limits. If a participant has two HSA accounts, total contributions for both should not exceed the maximum contribution limits.

Distributions Types of Distributions: Normal Distributions related to eligible expenses Transfer Prior HSA to TASC HSA TASC HSA to New HSA Rollover From prior HSA or individual retirement account (IRA) Participant has 60 days to move fund to new HSA Keep all receipts and documentation to support distributions in case of an IRS audit. Excess Contribution Death Removes excess funds from participants account Use in the event of a death of HSA participant It s important to select the distribution type to ensure it is reported correctly on their tax forms.

Distributions Distributions for non-medical expenses: After age 65, money can be withdrawn for non-medical expenses, but the funds will be taxed as income (similar to an IRA). Prior to 65, there is a 20% penalty on non-medical expenses in addition to paying income taxes on the money. Correcting a Distribution: If an incorrect distribution is made the employee can: Make a post tax contribution to replace the funds prior to the tax filing deadline for that year, or Offset the distribution with a valid unreimbursed medical expense(s) incurred from onset of HSA account, or Claim the distribution as taxable income on their tax filing. TASC recommends that participants consult a Tax Advisor for tax implications based on their tax situations.

TASC Card TASC Card Advantages Provides easy payment for eligible expenses. No out-of-pocket expenses. Available for all accounts. Receiving TASC Card TASC Card will be mailed to participant s home address upon enrollment. TASC Card will be delivered in an unmarked, plain white envelope. TASC Cards are good for 4 years. Additional cards for spouse/dependent over age of 18 available at no charge. Lost/Stolen TASC Cards Report immediately via the TASC online account. Contact TASC Customer Care if there are any fraudulent charges.

TASC Card TASC Card Usage Limited to eligible expenses based on the account type. Limited to merchants with an inventory information approval system (IIAS) How TASC Card Works Swipe Card IIAS approves purchase of eligible items and checks available balance Amount is deducted from participant s account TASC Card Denials Common Denial Reasons Insufficient Funds Ineligible Item OTC drugs, other non-eligible items What to do when TASC Card denied Pay out of pocket and submit an HSA Distribution request Check TASC Online Account or Mobile App to determine if balance issue or inactive card

Investments Participants can set up the option to invest their HSA balances that exceed $2,000. This helps increase their savings. All investment earnings are tax-free. TASC offers a variety of mutual fund options for the participants to select. All mutual funds are managed by Healthcare Bank, FDIC insured. How It Works TASC automatically manages and distributes any contributions into the investment account the participant selects. Once a contribution is received, funds of $100 or more are automatically transferred into the investment accounts set up Once a distribution is taken, funds are automatically transferred into the to cash account so the cash account balance equals $2,000 or less. For investment guidance/advise, Participants should consult a financial advisor.

Investments Participant can manage their Investment account options directly via their TASC Online Account: View balance by investment. View fund performance. View transaction details. View fund activity and pending/activity summary. Realign and transfer your investment allocations. Set your investments to automatically adjust the balance. Use the tools to calculate the potential growth of your investments. For more information detailed information related to the HSA Investment options, reference the HSA participant guide.

Election Changes Participants have the ability to change their HSA election at any time, no qualifying event is needed. Participant is responsible for making sure their total contributions do not exceed the IRS maximum contribution limit. TASC Election Change Process: Election change is verified/processed by payroll/benefit staff. Election change is sent to TASC. TASC processes the election change.

Termination/Retirement Participants retain their HSA funds and account even after termination and retirement. TASC HSA Termination/Retirement Process: TASC sends HSA participant letter providing options on how to manage their HSA funds: Spend the funds. Transfer HSA funds to new custodian. Leave HSA account open with TASC. After 30 days, if a balance remains in HSA account, TASC will move the HSA to an individual account. Participant will receive a welcome letter with new account log in information A new TASC Card will be sent. Admin fee is $3.00 per month is deducted from the HSA balance. Account is closed when balance reaches zero. If the HSA participant continues to remain eligible to make contributions to their HSA, they will have access to submit contributions via their TASC Online Account or by submitting an HSA contribution form to TASC.

Death of Accountholder TASC should be notified of the death of accountholder. Upon notification, TASC will provide an HSA Death Distribution form to the beneficiaries listed on the account, must be returned with a notarized copy of death certificate. If beneficiary is the spouse of the HSA participant, they have two options for distribution: Retain HSA for their own use Receive full distribution of remaining funds. If beneficiary is non-spouse, they will receive full distribution. Distributions would be subject to income taxes but no penalties are assessed. Death distributions issued via check take up to 10 days to process. If no beneficiary on file, account will remain open until there are 12 consecutive months of no activity. Balance is escheated (returned to State of Wisconsin) until an heir claims the asset. It is important that participants designate beneficiaries for their HSA accounts. For more information on how add beneficiaries to HSA account, reference the HSA participant guide.

TASC Online Account Website: https://partners.tascocnline.com/etfemployee View account balance and details. View claims history. Manage Beneficiaries. Request Distributions. Manage Investments. Sign up for Direct Deposit. Order additional TASC Cards. Access Tax Forms. Access forms and the Participant Guide. Initial Access provided in TASC Welcome Letter TASC Username: first initial, last name, date of birth (mmddyy), and last 4-digits of Social Security Number TASC Password: same as username described above. Participants will be required to create a new, unique password and set up security questions upon initial login.

TASC Mobile App The TASC mobile app provides instant access to account information on the go, 24/7/365. View account balance and details. Request Distributions. View Payment status. View notifications and more. Mobile App Download Available for free on the Apple itunes App Store or the Android Marketplace Search for eflex Benefits to download. Mobile App Log In To log into the App, enter TASC online username and password. Participants will be required to create a 4-digit PIN upon initial log in. Enter the 4-digit PIN to access mobile app.

Forms HSA Forms HSA Participant Guide HSA Enrollment Information Packet HSA Welcome Information Packet HSA Eligible Expenses HSA Enrollment Form HSA Contribution Form HSA Contribution Change Form HSA Death Distribution Form HSA Distribution Request Form Beneficiary Change/Spousal Consent Form Power of Attorney General Forms Appeal Information Form Authorization for Release of Information Form Change of Address Form Direct Deposit Authorization Form How to Enroll Online Flyer Payroll Transfer Form TASC Card/Mobile App Additional Debit Card Request TASC Cardholder Agreement TASC Mobile App Flyer

TASC Customer Care PHONE: 844-786-3947 or 608-316-2408 HOURS: Monday-Friday, 8 am to 5 pm in all time zones FAX: 877-231-1287 EMAIL: 1customercare@tasconline.com ONLINE: https://partners.tasconline.com/etfemployee MAILING ADDRESS: PO Box 7511 Madison, WI 53707

TASC Payroll/Benefit Office Resources Relationship Management Team:* Relationship Managers: Kim Manyck 800-422-4661 ext. 6651 Kym Starker 608-316-2459 Client Account Executive: Amy Stark 608-316-2694 *The Relationship Management contacts are for payroll and benefit staff only. Do not distribute to employees. EMAIL: stateofwi@tasconline.com ONLINE: https://partners.tasconline.com/etfclient Access to reports, forms and Administration Guide

Q&A If you have any questions, please submit them using the Chat feature. All questions and answers received will be emailed to everyone as part of the training follow up.

Upcoming TASC Trainings 2017 Open Enrollment End of September 2016 Advanced ERA and Advanced HSA to be determined More information regarding upcoming TASC Trainings coming soon!

We appreciate your feedback! We are interested in what you thought of this training session. The candid and valuable feedback gathered allows TASC to enhance the training sessions to better meet your needs.