|
|
|
Health Savings Account
HEALTH SAVINGS ACCOUNT (HSA)
Health Savings Accounts (HSAs) are tax-exempt savings accounts, and allow you to save for current or future health care expenses. For enrollment in the Flexible Benefits Program, the HSA is available to you if you are:
enrolled in the State Health Benefit Plan High Deductible Health Plan (HDHP);
are not enrolled in Medicare;
are not covered by another health plan; and
are not claimed as a dependent on someone else's federal tax return.
Through HSA contributions, you can save, invest, and distribute funds on a pre-tax basis for qualified health expenses not otherwise covered by health insurance. While funds in the HSA are not subject to forfeiture and can be carried year to year, the HSA may not be right for all employees in an HDHP. The benefits, as well as the limitations, should be read and understood carefully.
Important features of the HSA:
Annual maximums:
| | HDHP Deductible | Maximum HSA Deposit
(2008) |
| Single Coverage | $1,100 | $2,900 |
| Family Coverage | $2,200 | $5,800 |
Additional contributions can be made through deposits that you or someone else makes directly to the HSA, subject to annual maximums.
Payroll contributions will begin the month in which your account becomes effective, but not before the effective date of your HDHP.
Payroll contributions for PeopleSoft agencies may be delayed up to 15 days before posting to the account due to the receipt of funds by SPA and the reconciliation process by the Third Party Administrator and bank.
Payroll contributions for non-PeopleSoft agencies may be delayed up to a 30-day period before posting to the account due to the receipt of funds by GMS, the manual reconciliation process of payroll and the reconciliation process by the Third Party Administrator and bank.
Unlike the General Purpose or Limited Purpose Health Care Spending Account (HCSA), HSA contributions are not accessible for use until the money has been transmitted and posted to the account.
If you are 55 or older, you may contribute additional dollars up to $900 as "catch up" contributions for 2008.
Rollover amounts from another HSA are not subject to annual contribution limits, and must be deposited within 60 days after receipt of funds. Only one rollover contribution may be made to an HSA during any one-year period.
Once you reach the investment threshold of $2,000, you may transfer funds into selected investment options offered through J.P. Morgan Chase & Co. A balance must be maintained in your deposit account. If the balance in the account remains $0 for over 60 days, it may be closed due to insufficient funding to pay monthly fees. (Fees may apply).
Investment transfers, changes in beneficiaries, or changes in contribution amounts can be made at any time during the year.
You will be assessed a $3.00 monthly service charge for the administration of the HSA, which will be directly deducted from your Health Savings Account. If you leave employment with the State, you may retain your HSA, through J.P. Morgan Chase & Co., for a new monthly charge of $5.00. Other applicable transaction fees may apply. Click here for detailed HSA fees.
IMPORTANT NOTE:
Under IRS rules, employees may not participate in a Health Savings Account and a General Purpose Health Care Spending Account (HCSA) at the same time. The General Purpose HCSA is considered a health plan that constitutes "other health coverage," making it impermissible for the employee to make contributions to the HSA.
An individual that participated in the HCSA (employee or spouse of an employee) for the immediate preceding plan year and who is covered by a "grace period," is not eligible to contribute to the HSA until the first day of the first month following the end of the grace period, if there is a balance in the HCSA on December 31st. For example, the Flexible Benefits Program HCSA grace period ends March 15, 2008. If a participant has a balance in the HCSA on December 31st, and does not elect coverage by a general health care account or other disqualifying coverage for 2008, the employee is eligible for the HSA on April 1, 2008.
If a participant's health care spending account has no unused contributions remaining at the end of the immediate preceding plan year (December 31st), the employee may participate in the HSA and the Limited Purpose Health Care Spending Account, effective January 1, 2008.
SPENDING ACCOUNTS
Spending accounts are like getting a tax rebate every time you pay for health care and child or other dependent care expenses, since your pay goes into the accounts before taxes are withheld. This can mean savings of approximately 26%-45%, depending on your tax situation!
For the 2008 Plan Year, the spending accounts being offered are:
| | Limited Purpose
Health Care Spending
Account (Dental and
Vision only) | General Purpose
Health Care
Spending Account | Dependent (Child)
Care Spending
Account |
| Annual Maximum | $5,040 | $5,040 | $4,992 |
| Annual Minimum | $ 120 | $ 120 | $ 120 |
Limited Purpose Health Care Spending Account (HCSA) - Dental and Vision Only
The Limited Purpose HCSA has been created specifically for those individuals who are choosing to enroll in the Health Savings Account (HSA) option. While enrollment in the General Purpose HCSA would prevent you from being eligible to participate in the HSA, enrolling in the Limited Purpose HCSA will allow you to continue to be deemed eligible to participate in the HSA, allowing you to save tax dollars on the dental and vision treatment you and your family receive.
The IRS rules and the rules of the Employee Benefit Plan Council designate eligible expenses for the Limited Purpose HCSA. The Employee Benefit Plan Council has the responsibility to interpret these rules and make all decisions as to an expense's eligibility. Some of these eligible expenses include:
Expenses, deductibles and co-payments not paid by any dental or vision insurance in which you or your family members participate;
Costs for procedures not covered or not covered fully by a dental or vision plan;
Specialized equipment for disabled persons relating to dental or vision work;
Contact lens, glasses, and laser eye surgery;
Certain other IRS approved expenses relating to dental or vision work.
Limited Purpose Health Care Spending Account (HCSA) Exclusions List
These are a few examples of health care expenses that are not eligible for reimbursement under the Limited Purpose HCSA:
Any expense relating to a non-dental or non-vision expense
Insurance premiums
Postage/handling fees
Teeth whitening/bonding
Vitamins
For further information on potentially eligible expenses, see IRS Publication 502, available at your personnel/payroll office, your local public library or IRS office, or online at www.irs.gov/prod/forms_pubs/pubs/pubs.html. Most, but not all, of the dental and vision expenses are reimbursable under the Limited Purpose HCSA
General Purpose Health Care Spending Account (HCSA)
The traditional Health Care Spending Account, or General Purpose Health Care Spending Account (HCSA) helps you save tax dollars on the health-related treatment you and your family receive.
Like the Limited Purpose HCSA, the IRS rules and the rules of the Employee Benefit Plan Council designate eligible expenses and the Employee Benefit Plan Council has the responsibility to interpret these rules and make all decisions as to an expense's eligibility.
Unlike the Limited Purpose HCSA, the General Purpose HCSA, is not limited to only dental and vision expenses. Some of the eligible expenses for the General Purpose include:
Deductibles and co-payments not paid by any health or dental insurance in which you or your family members participate;
Costs for procedures not covered or not covered fully by a health, dental or vision plan;
Specialized equipment for disabled persons;
Preventative care screenings;
Contact lens and glasses;
Laser eye surgery;
Prescription and over-the-counter medicine;
Mental health services;
Physical therapy; and
Certain other IRS approved expenses.
General Purpose Health Care Spending Account (HCSA) Exclusions List
These are a few examples of health care expenses that are not eligible for reimbursement under the General Purpose HCSA:
Cosmetic procedures/drugs
Electrolysis
Hair transplants
Herbal supplements
Insurance premiums
Nicotine patches and gum
Nutritional supplements
Postage/handling fees
Teeth whitening/bonding
Vitamins
NOTE: You may not participate in the General Purpose HCSA and the HSA at the same time.
For further information on potentially eligible expenses, see IRS Publication 502, available at your personnel/payroll office, your local public library or IRS office, or online at www.irs.gov/prod/forms_pubs/. Most, but not all, of these expenses are reimbursable under the General Purpose HCSA.
> 2˝ Month Grace Period for Limited & General Purpose Health Care Spending Account (HCSA)
Employees have an additional 2˝ months to spend the money in their General or Limited Purpose Health Care Spending Account. This means qualified expenses may be reimbursed for services provided through March 15, 2009. Employees will have until May 31, 2009 to send their claims to SHPS for reimbursement. Remember, if a claim is mailed, the envelope must be postmarked by May 31st. The fastest way to get claims to SHPS is to fax them at 1-866-643-2219.
To best take advantage of this grace period, plan only for expenses you expect to have for the 12 month period. If you do not use all of the money you contributed, you can then use it in the grace period.
> Keeping Receipts
Remember, for the HCSA (General or Limited) you must keep your receipts since some transactions may require validation by SHPS. For the HSA, proof of expenses is not required, however, you should be prepared to substantiate expenses if requested by the IRS. You must always submit receipts for over-the-counter purchases made with the card
> Go on-line with MySHPS at www.shps.com
to access web tools, tax savings worksheets, tax savings calculators, claim forms, direct deposit forms, and check your account status. By providing your e-mail address, you may also receive routine correspondence via e-mail from SHPS about your account.
> Call SHPS AccountLink toll-free at 1-800-893-0763
Use the automated phone system to find out your current account balance(s) and the status of your last claim. You may talk with a SHPS customer service counselor by staying on the line or pressing the (*) key. AccountLink is available 8:00 a.m. - 2:00 a.m. Eastern time, Monday - Friday. Benefit Counselors are available 8:00 a.m. - 8:00 p.m. Eastern time, Monday - Friday.
> Fax Spending Account Claims to 1-866-643-2219
If your email is on file with SHPS, you will receive confirmation of your faxed claim and notification once your claim is processed.
> The Debit Card
When you enroll in the Health Savings Account or Health Care Spending Account (Limited or General Purpose) program, you'll receive a VISAŽ Savings and/or Spending Account Card for purchases of eligible healthcare expenses. You will automatically receive the Card, along with information about the card and how it can be used. You may request up to 4 additional cards with your spouse or dependent's name on it, for a fee of $5.00 per card. If your card is lost or stolen, you may request another card for a fee of $15.00. For additional cards, call SHPS at 1-800-893-0763.
NOTE: If you use your debit card during the grace period, the expenses will be paid from your 2007 HCSA balance. If you have a balance in your 2007 HCSA account, SHPS will perform a "true-up" after May 31st. Once the "true-up" has been completed, SHPS will transfer the funds from your 2008 HCSA balance and you will be able to receive reimbursement for your 2008 expenses. If you have a balance in your prior month's account, it is recommended that, during the grace period, you submit paper claims marked "2007 expenses".
|
|
