Answers to Your HSA Plan Questions

Answers to Your HSA Plan Questions
As you think about enrolling in the UnitedHealthcare Health Savings
Account (HSA) Plan, keep in mind these great benefits.
Your premium cost for this plan is usually lower than traditional
copayment plans.
One of the biggest benefits is that you will often pay lower plan premiums. A health plan
with a high deductible will usually cost less than a low deductible plan.
You have protection from high out-of-pocket costs.
The plan gives you financial protection with an out-of-pocket maximum. If you reach the
maximum, the plan will pay 100 percent of all eligible expenses for the rest of the plan year.
Your preventive care is covered 100 percent in our network.
Health reform and HSAs
With the passing of the health
reform law, two important changes
affecting HSAs became effective
January 1, 2011:
• You can no longer pay for overthe-counter (OTC) medicines
with an HSA unless you have a
prescription. HSAs can still be
used to pay for insulin and for
many OTC supplies.
• If you use an HSA to pay for
items or services that aren’t
qualified medical expenses
and you are under age 65, the
tax penalty increased from 10
percent to 20 percent of the
HSA distribution.
Preventive care services will include routine wellness exams, well-child exams, physicals,
mammograms, flu shots and other immunizations. See your plan benefit documents for
specific details on preventive care coverage.
You have the option of opening a personal health savings
account, or HSA.
When you enroll in the HSA Plan, you have the option of opening a personal HSA to
save money, income tax-free, to pay for qualified medical expenses which may count toward
your deductible and other related health care expenses.
You can use the HSA to save for future health expenses, including expenses you may have
after you retire. All the money in the HSA is yours to keep and spend on qualified medical
expenses, even if you change jobs or health plans. There is no “use it or lose it” rule.
The HSA can save you on taxes.
There are tax advantages to an HSA. It is what we call “triple tax savings.”
1. Your deposits are exempt from federal income tax and most state income tax.*
2. Your savings grow tax-free.
3. Money you spend on qualified medical expenses is income tax-free, too.
*There are currently three states that require you to pay state
income tax on the HSA: Alabama, California and New Jersey.
AnSWerS TO YOUr HSA PLAn QUeSTIOnS
What is a plan deductible?
The plan deductible is a fi xed amount of money that must be paid
before your health plan begins to pay for health care expenses.
The only exception is preventive care, because the plan will pay
100% for those services when received in network, without
requiring you to pay the deductible. As you pay for out-of-pocket
medical expenses, these expenses may apply to the deductible.
This can include payments using your HSA. If you reach the
deductible, the plan will start paying its portion of covered
medical expenses. The deductible will start over again in the
new plan year.
What is a qualified medical expense?
These are medical, dental or vision expenses that the IRS says
can be paid for from an HSA without having to pay income
taxes. Examples of qualified medical expenses include doctor’s
office visits, drug prescriptions, dental treatments and X-rays,
along with eyeglasses and vision exams. Even certain health
plan premiums qualify, including:
Do I have to use the bank my employer
chooses?
No, you may open an HSA with the bank of your choice. You
own your HSA, and you decide where to open your account.
If I need to pay for a doctor visit or for a
prescription, how do I do so using HSA dollars?
The HSA Plan does not require you to pay copayments or
other costs at the time of service, especially if you are seeing
a network doctor or hospital. Instead, the doctor should first
submit the claim to UnitedHealthcare. This is to ensure that:
• W
ecandetermineiftheclaimisaneligibleexpense
under your plan.
• W
ecandeterminewhethertheclaimwasforpreventivecare,
so it can be paid 100 percent.
• Youreceiveanydiscountsforseeinganetworkdoctor.
• COBRAhealthinsurancepremiums
example
• Qualifiedlong-termcareinsurancepremiums
When you arrive for a network doctor appointment, be
sure to present your health plan ID card so the office staff
is aware that you have the HSA Plan. After your visit, the
doctor will submit a claim to UnitedHealthcare for the
cost of the visit.
• C
overagewhilereceivingfederalorstate
unemployment benefits
• O
therdeductiblehealthplansforthoseage65andolder
(except a Medicare Supplemental policy)
The IRS may modify the list of qualified medical expenses
from time to time. For example, recently the IRS added breast
pumps and lactation aids to the list of qualified expenses. Visit
irs.gov for more information. You should save all receipts for
medical expense payments with your tax records. That way, you
have proof that you used your HSA only to pay or reimburse
yourself for qualified medical expenses.
1
UnitedHealthcare will process
the claim at the rate agreed upon
by the doctor.
2
If the visit was for preventive care,
UnitedHealthcare will pay the claim
100 percent.
What expenses don’t qualify for tax benefits?
Examples of expenses that do not qualify include cosmetic
surgery, health club memberships, teeth whitening and overthe-counter medicines purchased without a prescription. If you
use an HSA to pay for an expense that is not qualified, you will
have to pay taxes on the expense and may also have to pay a 20
percent penalty. So, if the expense was $100, you would pay an
extra $20, plus taxes.
2
Or
2
If the visit was not preventive care,
UnitedHealthcare will notify both the
doctor and you of the amount you owe.
3
The doctor will then be responsible
for billing you directly.
4
Once you receive the bill, you can pay
the bill with cash or credit card.
Once you receive a bill from your doctor or if you are at the
pharmacy filling a prescription, you have a few options.
Can I use the HSA for my spouse or dependents
if they are not covered under my plan?
• F
irst, most banks will give you a debit card to make paying
easy. You can pay the bill with your debit card by filling out
the credit/debit card information on the bill. If you are at the
pharmacy or a walk-in clinic, you can swipe the card or hand
it to the cashier, just like you would with any other debit card.
Yes, you can.
• S
ome banks may also make checks available to you
(sometimes at a charge).
• Y
ou can pay another way, such as with cash or other credit
card. Later, you can choose to reimburse yourself from your
HSA. Or, let your dollars grow for the future.
Is there a limit on how much I can contribute
(deposit) to my HSA?
Yes, there is an annual limit, determined by the IRS. For 2011,
the most you can contribute to an HSA is $3,050 if you have
individual coverage and $6,150 if you have family coverage.
For 2012, the most you can contribute is $3,100 if you have
individual coverage and $6,250 if you have family coverage.
If you are 55 or older, you can make “catch-up” contributions,
too. In 2012, you can deposit an additional $1,000. This helps
people who are nearing retirement speed up their savings.
If your spouse is also 55 or older, and meets the eligibility
requirements for opening an account, he or she may establish a
separate HSA and make “catch-up” contributions, too.
While there is a limit on how much you can deposit into your
HSA each year, there is no limit on how much you can save in
your HSA over the long term.
Can other people contribute to my HSA?
Yes, anyone can contribute to your HSA. A family member,
for example, may choose to give you money that you can
deposit into your account. Wherever the money comes from,
though, keep in mind there are annual contribution limits set
by the IRS. Contributions above the annual limit are subject to
income taxes and a penalty.
What happens to my HSA if I leave my current
employer or retire?
You keep it. You don’t even have to change banks. If you take
a job elsewhere or retire but do not have coverage under an
HSA-eligible health plan, you can still use your HSA to pay
for qualified medical expenses. However, IRS rules will not
allow you to deposit money into the HSA and receive tax
benefits if you are not currently enrolled in an HSA-eligible
health plan.
If I am still carrying health coverage for my
24-year-old, can I use my HSA to help pay for his
qualified medical expenses?
It depends. An adult child must still be a tax dependent in
order for his or her medical expenses to qualify for payment
or reimbursement from a parent’s HSA. If the adult child is
not a tax dependent but is covered by a parent’s HSA-eligible
health plan, he or she may be able to open his or her own HSA.
In these circumstances, it is best to consult with a competent
tax advisor.
What if my spouse is also covered by an HSAeligible health plan and has an HSA?
The law says that in this case, the two of you together can only
contribute up to the family limit, either to individual HSAs or
to one or the other’s HSA.
If I’m 65 or older and decide to retire, what
happens to my HSA?
Once you retire, you can continue to receive tax benefits when
you use the HSA for qualified medical expenses. If you are
65 years old or older, there is no penalty for withdrawing your
money, even if you enroll in Medicare. When your Medicare
coverage starts, you can use your HSA to pay your Medicare
premiums, deductibles and copayments. After you turn 65
or become entitled to Medicare benefits, you may withdraw
money from your HSA for non-medical purposes without
penalty. The withdrawal is treated as retirement income and is
subject to normal income tax.
I want my dollars to go as far as possible.
So how can I find out how much a treatment
or procedure is going to cost?
After you enroll, you will have tools on myuhc.com, like the
Treatment Cost Estimator, to help you make the best decision
regarding your care. The Treatment Cost Estimator can help
estimate the cost of treatments and other procedures based on
your health plan, a specific doctor or hospital, and your ZIP
Code. We also encourage you ask your doctor how much a
service or procedure might cost. Doctors and hospitals may
charge different rates for the same services depending where
you go. So your choice can make a big difference.
3
AnswerS TO YOUR HSA PLAN questions
Can I have an HSA and a health care flexible
spending account, or FSA?
No. Federal tax law does not permit you to enroll in a health care
FSA. But the law does permit you to enroll in what is called
a limited-purpose FSA to pay for qualified dental and vision
expenses. See your benefit plan to see if a limited-purpose FSA is
available to you. You may also open a dependent care FSA if your
employer offers this option. A dependent care FSA can help you
save to pay for qualified day care expenses for children under 13 or
adult dependents who cannot care for themselves.
OptumHealth Bank is UnitedHealthcare’s
health care bank of choice
OptumHealth Bank, Member FDIC, is one
of the nation’s leading HSA custodians. Only
OptumHealth Bank gives you the convenience of
managing your HSA dollars through your health
plan website – myuhc.com.
When you log in to myuhc.com, you can do all of
your banking: pay bills, make deposits, reimburse
yourself, track spending, start investments and see
your tax savings. In addition, you also get the Health
Savings Account Debit MasterCard® to make it easy
to pay from your account and the Health Savings
News, an e-newsletter for health care saving and
spending tips.
How do I open my HSA with
OptumHealth Bank?
You can complete a paper application, if available.
Or, you can go to myuhc.com and click on Health
Savings Account, under the Information Center.
Follow the instructions to complete the online
application. You’ll need your health plan information,
such as your group number, to complete the
application. OptumHealth Bank will send you a
welcome kit, your HSA Debit MasterCard and PIN.
UnitedHealthcare
Insurance Company
Insurance coverage provided by or through UnitedHealthcare Insurance Company or its affiliates. Administrative services provided by United HealthCare Services, Inc., or their affiliates.
Health savings accounts (HSAs) are individual accounts offered by OptumHealth BankSM, Member FDIC, and are subject to eligibility and restrictions, including but not limited to
restrictions on distributions for qualified medical expenses set forth in section 213(d) of the Internal Revenue Code. This communication is not intended as legal or tax advice. Please
contact a competent legal or tax professional for personal advice on eligibility, tax treatment and restrictions. Federal and state laws and regulations are subject to change.
Please check your health benefit plan materials to determine whether your employer will make supplemental contributions to your HSA.
Information for individuals residing in the state of Louisiana or have policies issued in Louisiana: Health care services may be provided to you at a network health
care facility by facility-based physicians who are not in your health plan. You may be responsible for payment of all or part of these fees for those non-network services, in addition to
applicable amounts due for copayments, coinsurance, deductibles, and non-covered services. Specific information about network and non-network facility-based physicians can be
found at myuhc.com or by calling the toll-free Customer Care telephone number that appears on the back of your health plan ID card.
myuhc.com® is a registered trademark of UnitedHealth Group Incorporated.
MasterCard® is a registered trademark of MasterCard Worldwide. This card is issued by OptumHealth BankSM pursuant to license by MasterCard® International
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