hsa basics and hsa financial strategies
TRANSCRIPT
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HSA BASICS AND FINANCIAL STRATEGIES
Understanding Health Savings Accounts (HSAs) and
Maximizing their Financial Potential
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Consumer Plan vs. PPO Plan
Consumer Plan
• Type: PPO network• Basic Concept: Lower
premiums with higher deductible
• Health Savings Account: Money not spent by the end of the calendar year rolls over to the next year and accumulates
• Limited Flex Spending Account
PPO Plan• Type: PPO network• Basic Concept: Higher
premiums with lower deductible
• Flex Spending Account: Money MUST be spent by end of calendar year or you lose it
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HSA vs. FSA
HSA – Health Savings Account
• All money contributed pre-tax• Available for use for IRS qualified
medical expenses• Contribution rate can be adjusted
during year• Can reimburse yourself later in
year• Savings Tool: If you don’t spend
the money during the calendar year, it rolls over to the next.
• Can be used for medical expenses in retirement, including long term care premiums.
FSA – Flex Spending Account
• All money contributed pre-tax• Available for use for IRS
qualified medical expenses• Contribution rate fixed and
non-adjustable• Fully funded day 1• Spending Account Only: No
savings function. Use it or lose it.
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How Much Can You Contribute?
Filing Status2013
IRS Max.Amway
BaseMax for
EmployeeWeekly
Bi-Weekly
Single $3250
$2000
$1250 $24 $48
Family $6450 $4450 $86 $171
> 50 Catch up $1000 $1000 N/A N/A
FSA $2500 N/A $2500 $48 $96
• Not required to contribute• Permitted to make HSA contribution rate changes
during year
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Notes: Combining HSA & Limited FSA in Consumer Plan
• FSA is limited until plan deductible is met
• Only need both if:• you know you will need
more than IRS HSA limit, or• you want to maximize your
HSA rollover/accumulation
• Use for specific, planned expenses
• Be conservative with funding your FSA
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IRS Qualified Medical Expenses
• Applies to both the HSA and FSA accounts
• From Acupuncture to Chiropractorto Dental Treatments to Eye Exams/Glasses to Home Care
• To Learn More, Google:• HSA Qualified Medical
Expenses • IRS Publication 502 (starting
on page 5) for a complete list from the IRS
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HSA Strategies
Health Savings Account• Save little
• Take advantage of $2000 Amway contribution• Not required to contribute at all • Consider the difference in premiums as a minimum
Save little
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HSA Strategies
Health Savings Account• Save little
• Take advantage of $2000 Amway contribution• Not required to contribute at all • Consider the difference in premiums as a minimum
• Save enough – enough to cover potential out-of-pocket costs
Save littleSave enough
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How Much to Cover the Out-of-Pocket Maximum?
Filing Status
OPMAmway
BaseEmployee
TotalWeekly
Bi-Weekly
Single $2500$2000
$500 $10 $19
Family $5000 $3000 $58 $115
PurposeTo have enough pre-tax money to cover expenses until Consumer Plan pays 100%.
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HSA Strategies
Health Savings Account• Save little
• Take advantage of $2000 Amway contribution• Not required to contribute at all • Consider the difference in premiums as a minimum
• Save enough – enough to cover potential out-of-pocket costs • Save as much as possible – roll over and accumulate
Save little
Save AMAP
Save enough
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Which Bucket is Most Efficient for Medical Expenses in Retirement?
401(k)
All distributions taxed
Roth IRA / 401(k)
Principal taxed at time of contribution; growth
is not taxed.
HSA
NEVER TAXED
when used for qualified medical expenses.
MOST EFFICIENT
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HSA Accumulation Strategy
• Goal – Accumulate maximum you can by rolling over as much as possible each year.
• Strategy• Fund HSA – Fully, if possible• Pay small expenses using taxed money, not the HSA.
• Establish the maximum amount you are comfortable paying out of pocket instead of with HSA. Any expenses over that amount, use HSA.
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HSA Accumulation StrategyFiling Status
IRS Max.
Amway Base
Max for Employee
WeeklyBi-
Weekly
Single $3250
$2000
$1250 $24 $48
Family $6450 $4450 $86 $171
> 50 Catch up $1000 $1000 N/A N/A
Filing Status
OPMAmway
BaseEmployee
TotalWeekly
Bi-Weekly
Single $2500$2000
$500 $10 $19
Family $5000 $3000 $58 $115
Out-of-Pocket Max Strategy
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HSA Accumulation Strategy
The HSA as longer-term investment vehicle• Multi-year strategy• Base
• $2500
Max OOP
Base $2500
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HSA Accumulation Strategy
The HSA as longer-term investment vehicle• Base
• Remains at $2500• Tier 1 - Cash
• Automatically refills Base• OPM account
• $2500 Single• $5000 Family
Max OOP
Base $2500
Tier 1OPM
Single $5000Family $7500
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HSA Accumulation Strategy
The HSA as longer-term investment vehicle• Base
• Remains at $2500• Tier 1
• Automatically refills Base• OPM account
• $2500 Single• $5000 Family
• Tier 2• Conservative Investments
• Tier 3 & Beyond• Riskier investments
Base $2500
Tier2
Single $5000Family $7500
Tier 1OPM
Single $5000Family $7500
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What We Have Learned
• If you/family are healthy, the Consumer plan is a clear choice.
• The Consumer Plan’s maximum out-of-pocket cap may save you money if you:• regularly take expensive non-
preventive prescription drugs• have an unusual & expensive medical
condition or need
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Your Life – Your Plan
• Transition to proactive consumer of medical services
• How you fund and spend your HSA is specific to you and your family’s situation.
• You can always adjust your contribution level during the year.
• Our take: Take advantage of free money. Amway is being extremely generous with the $2000.
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Unsure? BeManaged Can Help.
• Nov. 12th – Dec. 10th – Free onsite and online consultations.
• Online Tools Available: PlanAdviser helps determine which plan is most advantageous financially.
Amway.bemanaged.com Online Tools > Estimate Medical Expenses
• Prescriptions Questions? Connect with Express Scripts
• Claims or Expense Questions? Connect with Encompass.
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Schedule a Consultation
Visit us - Amway.BeManaged.com
Call us - (616) 871-0751 or
(888) 738-8780