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• A Health Savings Account (HSA) is a tax-advantaged savings account that allows you to set aside tax-free dollars to pay for qualifying medical expenses or to use during retirement
• An HSA is a bank account, not a benefit plan. You own it, so it stays with you even if you change employment or retire
• An HSA has two parts: Cash Account (interest-bearing and FDIC insured) and an optional Investment Account (to support long-term investment goals)
How Does the HSA Work?
• You must enroll in the HSA-qualified $1,500/$2,850 Deductible Plan
• You may elect to make pre-tax payroll contributions or make after-tax contributions online
• IRS contribution maximums apply for each tax year (January 1 – December 31)
• Use the Prepaid MasterCard® to pay providers or withdraw funds online via direct deposit
Maximum Contribution Per Year 2021
Individual Coverage $3,600
Family Coverage $7,200
plus $1,000 annual catch-up contribution for age 55 and over
• Contributions can only be made if you are actively enrolled in the HSA-qualified $1,500 or $2,850 Deductible Plans
• Contributions cannot be made if you are enrolled in any other medical plan that is not an HSA-qualified plan (including yours or your spouse’s Health Care FSA)
• You cannot make HSA Contributions if you are claimed as a dependent by someone else
• Earnings and withdrawals are tax-free for qualified health care expenses but are subject to a tax penalty if used for non-qualified health care expenses
• After you turn 65, HSA funds can be withdrawn for any reason, however you will need to pay income taxes on this money if you use the funds to pay for non-qualified health care expenses
• New HSA accountholders must accept HSA terms & agreements before funds can be accessed
• New HSA accountholders will be required to go through the banking verification process and pass identification verification before the account is established
• HSA accountholders must keep supporting documents to prove distribution was for qualified health care expenses. If IRS requests receipts for verification purposes, failure to provide those receipts could result in having to pay a penalty.
• When contributing to an HSA, you cannot enroll in the Health Care FSA but you may enroll in the Limited Purpose Health Care FSA
• An Investment Threshold may be set up to automatically divert funds from your Cash Account to your Investment Account once you accumulate an HSA balance of at least $1,000
• Investment funds are not FDIC-insured. Invested funds are subject to risks, including changes in values and the possible loss of the amount you invested
• Funds in both the cash account and investment account can be used to pay for eligible health care expenses. If needed, you can transfer the investment monies back into the cash account to pay for expenses. Such transfers take approximately 72 hours to complete
• If you have an HSA account with another Trustee/Custodian, you can transfer the funds to the Trion HSA to avoid administrative fees. Transfer forms can be found on the Spending Account Service Center portal under the “Tools & Support” tab. Complete the Transfer Form and send it to the previous Trustee/Custodian for processing.
• You may establish a Health Savings Account with any trustee you choose. However, you can only make before-tax contributions to the Health Savings Account made available through Trion.
• If you are eligible for and enroll in any part of Medicare, you are no longer eligible to contribute to an HSA since Medicare Plans do not fit the criteria for an HSA compatible plan.
• If your spouse enrolls in Medicare, you do not lose your eligibility to contribute to a HSA account, as long as you are not enrolled in Medicare.
• You are eligible to contribute to your HSA at the coverage level you have enrolled in (individual or family), regardless of your spouse’s enrollment in Medicare, as long as you are not enrolled in Medicare yourself.
• If you are enrolled in Medicare, and your spouse is not, and you cover yourself and your spouse under the $1,500 or $2,850 Deductible Plan, then your spouse may be eligible to open and contribute to their own HSA account through another employer or with another bank.
• You may continue to contribute to your HSA account when you turn age 65, as long as you continue to delay your enrollment in Medicare coverage.
• Once you enroll in Medicare and are no longer eligible to contribute to your HSA, you may continue to take tax-fee distributions from your HSA account for qualified expenses.
• If your spouse is enrolled in Medicare, you may still use your HSA to reimburse your spouse’s qualified expenses.
• You cannot reimburse your own Medicare or a spouse’s qualifying retiree policy premiums tax-free from your HSA until you, the accountholder, turn 65.
*Chart assumes that employee & spouse do not participate in any other disqualifying coverages
(1) MMC’s HDHP are the $1,500 and $2,850 Deductible Plans
HSAs and Medicare • Employee is enrolled in MMC’s HDHP(1) with family coverage.*
• Employee is enrolled in MMC’s HDHP only, but spouse has both HDHP and Medicare coverage.*
• Employee is eligible to open an HSA, and can contribute up to the family HSA maximum.
• Spouse is not eligible to contribute to his/her own separate HSA.
• Employee and spouse can access funds to pay qualifying expenses, but can not be used to pay for Medicare premiums until the accountholder of the HSA reaches age 65.
• Employee enrolled in MMC’s HDHP with family coverage, and also has Medicare coverage.*
• Spouse is enrolled in MMC’s HDHP only.*
• Employee is not eligible to contribute to an HSA.
• Spouse is eligible to contribute to his/her own separate HSA and contribute up to the family HSA maximum
• Employee and spouse can access funds to pay qualifying expenses, but can not be used to pay for Medicare premiums until the accountholder of the HSA reaches age 65.
Set of 2 Prepaid MasterCards® provided upon initial enrollment
Five year expiration date – cards are good for 5 years from date of issue and reloaded annually, so keep your cards
Replacement/Lost/Stolen cards (set of 2) - $10.00 fee
HSA terms & conditions must be accepted to access HSA funds with the Prepaid MasterCard®
Save itemized receipts for every card transaction. You may be asked to provide receipts for some FSA transactions to verify expense eligibility. If not provided timely, your card access will be suspended and you will be asked to pay back the account
REMEMBER TO ACTIVATE YOUR PREPAID MASTERCARDS® AS SOON AS YOU RECEIVE THEM IN THE MAIL
– Employees who newly enroll in a Spending Account/Health Savings Account
– Members who reorder a card
– Members who report a lost or stolen card
– Members whose card is expiring
• Important Note:
– Those who have the red Benny® Prepaid MasterCard® can continue to use this card up until its expiration date. There is no need to order new cards. Your existing card will still work to access your current account balances until it reaches the expiration date.
– The MMA Blue Card Prepaid MasterCard® will function exactly the same as the red Benny® Prepaid MasterCard®.
The Patient Protection and Affordable Care Act is a complex law. Any statements made by Trion Group, a Marsh & McLennan Agency, LLC Company concerning tax, accounting, or legal
matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as accounting, tax, or legal advice. We recommend that you seek the
advice of your own tax, accounting and legal advisers as to whether or not the health plans you select are compliant with the Patient Protection and Affordable Care Act, including the minimum
essential coverage requirements.
No part of this document may be reproduced, quoted, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or by any information storage and retrieval
system), without express, prior permission, in writing from Marsh & McLennan Agency, LLC Company.