Accessing your HSA

If you provided an email address when you enrolled, your Access/User ID has been emailed to you. If you haven't received your User ID, please call the TAG benefits department at 623-580-4900.

Your health. Your money. You're in control.

An HSA gives you control over your healthcare choices. Health Savings Accounts are combined with an HSA-qualifies health plan to offer an affordable approach to healthcare. The health plans typically provide lower premiums while still providing low cost or free preventive care and the HSA provides tax benefits when contributions are made, as funds grow and when used to pay for qualified medical expenses. Low insurance premiums combined with tax-free money equal significant savings.

In Partnership with The Bancorp Bank, FDIC, TAG gives you the tools to manage your HSA. With our partnership you will have the opportunity to:

• Manage your account online
• Earn interest on your savings
• Take advantage of investment options
• Access the latest information on HSAs, high deductible health plans, and the consumer-driven healthcare movement
• Convenient and easy Tag Benefits MasterCard® debit card to pay for your healthcare expenses

2010 IRS Contribution Limits

Individual Only Coverage

• $3,050.00 Annually

Family Coverage

• $6,150.00.00 Annually

Catch-up (Individuals age 55+)

• $1,000.00 additional Annually

Qualified Expenses

What is a Health Savings Account?

A Health Savings Account is an alternative to traditional health insurance; it offers a different way for consumers to pay for health care through a savings vehicle. HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.

You must be covered by a High Deductible Health Plan (HDHP) to be able to take advantage of HSAs. An HDHP generally costs substantially less than traditional health care coverage costs, so the money that you save on insurance can be directed into the HSA.

You own and you control the money in your HSA. Decisions on how to spend the money are made by you, including investment options to help your account grow.

What Is a "High Deductible Health Plan" (HDHP)?

You must be enrolled on an HDHP to qualify to open an HSA. HDHPs are an inexpensive health insurance plan with deductibles in excess of $1150. Of course, your HSA is available to help you pay for the expenses your plan does not cover.

HDHPs can have first dollar coverage (no deductible) for preventive care and apply higher out-of-pocket limits (and co pays & coinsurance) for non-network services.

Do unused funds in a Health Savings Account roll over year after year?

Yes, the unused balance in a Health Savings Account automatically rolls over year after year. You won't lose your money if you don't spend it within the year.

Does an HSA pay for the same things that regular insurance pays for?

HSA funds can pay for any "qualified medical expense", even if the expense is not covered by your HDHP. For example, most health insurance does not cover the cost of over-the-counter medicines, but HSAs can. If the money from the HSA is used for qualified medical expenses, then the money spent is tax-free.

How do I know what is included as "qualified medical expenses"?

A partial list is provided in IRS Pub 502 (www.irs.gov).

Who decides whether the money I'm spending from my HSA is for a "qualified medical expense?"

You are responsible for that decision, and therefore should familiarize yourself with what qualified medical expenses are (as partially defined in IRS Publication 502) and also keep your receipts in case you need to defend your expenditures or decisions during an audit.

What happens if I don't use the money in the HSA for medical expenses?

If the money is used for other than qualified medical expenses, the expenditure will be taxed and, for individuals who are not disabled or over age 65, subject to a 10% tax penalty.

Are dental and vision care qualified medical expenses under a Health Savings Account?

Yes, as long as these are deductible under the current rules. For example, cosmetic procedures, like cosmetic dentistry, would not be considered qualified medical expenses.

Can I use the money in my HSA to pay for medical care for a family member?

Yes, you may withdraw funds to pay for the qualified medical expenses of yourself, your spouse or a dependent without tax penalty. This is one of the great advantages of HSAs.

Can I pay my health insurance premiums with an HSA?

You can only use your HSA to pay health insurance premiums if you are collecting Federal or State unemployment benefits, or you have COBRA continuation coverage through a former employer.

Can I purchase long-term care insurance with money from my HSA?

Yes, if you have tax-qualified long-term care insurance. However, the amount considered a qualified medical expense depends on your age. See IRS Publication 502 for the amounts deductable by age.

I have an HSA but no longer have HDHP coverage. Can I still use the money that is already in the HSA for medical expenses tax-free?

Expenses tax-free? Once funds are deposited into the HSA, the account can be used to pay for qualified medical expenses tax-free, even if you no longer have HDHP coverage. The funds in your account roll over automatically each year and remain indefinitely until used. There is no time limit on using the funds.

What happens to the money in my HSA if I lose my HDHP coverage?

Funds deposited into your HSA remain in your account and automatically roll over from one year to the next. You may continue to use the HSA funds for qualified medical expenses. You are no longer eligible to contribute to an HSA for months that you are not an eligible individual because you are not covered by an HDHP. If you have coverage by an HDHP for less than a year, the annual maximum contribution is reduced; if you made a contribution to your HSA for the year based on a full year's coverage by the HDHP, you will need to withdraw some of the contribution to avoid the tax on excess HSA contributions. If you regain HDHP coverage at a later date, you can begin making contributions to your HSA again.

What happens to the money in a Health Savings Account after you turn age 65?

You can continue to use your account tax-free for out-of-pocket health expenses. When you enroll in Medicare, you can use your account to pay Medicare premiums, deductibles, copays, and coinsurance under any part of Medicare. If you have retiree health benefits through your former employer, you can also use your account to pay for your share of retiree medical insurance premiums. The one expense you cannot use your account for is to purchase a Medicare supplemental insurance or "Medigap" policy.

Once you turn age 65, you can also use your account to pay for things other than medical expenses. If used for other expenses, the amount withdrawn will be taxable as income but will not be subject to any other penalties. Individuals under age 65 who use their accounts for non-medical expenses must pay income tax and a 10% penalty on the amount withdrawn.

Can I use my HSA to pay for medical expenses incurred before I set up my account?

No. You cannot reimburse qualified medical expenses incurred before your account is established. We recommend you establish your account as soon as possible.

Who will be the "bookkeeper" for my HSA?

It is your responsibility to keep track of your deposits and expenditures and keep all of your receipts. If you run out of HSA funds (and therefore need to use your HDHP), you may need to send those receipts to your insurer.