Welcome

• Overview Of Plans

  Health Savings Accounts (HSAs) | HSA Information | Case Studies of Savings

  ---

  Case studies of Savings. The following illustrations show how an individual and a family might use a typical HSA over a three-year period. Keep in mind that interest may be added to and administration fees may be deducted from the HSA account. Any HSA withdrawals are subject to ordinary income tax and may incur an additional IRS penalty.

  All information below is for illustration purposes only and does not reflect actual charges associated with any specific health plan. Your expenses and potential savings will vary based on your health plan, HSA account rules and the group arrangement offered by your employer. The illustrations are based on hypothetical health plans. Consult your Benefits Administrator for more details.
  
  Case Study 1
  Mary has a High Deductible Health Plan and an HSA. Her HDHP has a $1,500 deductible. She contributes $1,000 to her HSA per year, and her employer contributes $500 per year to the HSA, for a total annual contribution of $1,500.
  
  Year 1
  

  $1,500	HSA contribution
  -$300	Medical expenses applied to the deductible and paid from the HSA
  $1,200	HSA balance rolls over to Year 2.

  
  In Year 1, Mary sees her physician in his office several times for a minor medical problem and incurs $300 in expenses. She uses $300 from her HSA to pay her medical bills, which also count towards the deductible. Mary has a remaining balance of $1,200 in her HSA, which will automatically roll over into Year 2.
  
  Year 2

  $1,200	HSA rollover from Year 1
  +$1,500	Contribution for Year 2
  $2,700	HSA balance for Year 2
  -$1,500	Medical expenses applied to the deductible and paid from the HSA
  -$225	Prescription coinsurance amount paid from HSA
  -$105	PCP/Specialist office visit copays paid from the HSA
  $870	HSA balance
  -$700	Medical expenses not covered by plan but paid from the HSA
  $170	HSA balance rolls over to Year 3.

  
  Mary’s $1,200 rollover from Year 1 is combined with the $1,500 total contributions for Year 2, for an HSA balance of $2,700. During the year, Mary has an inpatient hospital stay for an elective surgical procedure, and her $1,500 payment is applied to the HDHP deductible. In addition, Mary sees a physician on three occasions during the year. Two of the visits are with her PCP and she pays a $30 copayment each time. Her physician refers her to a specialist for further treatment, for which she pays a $45 copayment. Mary’s total office visit copayment for the year is $105. She also has $225 in prescription coinsurance costs for drugs purchased from her local pharmacy following her hospital stay.
  
  Year 3

  $170	HSA rollover from Year 2
  +$1,500	Contribution for Year 3
  $1,670	HSA balance rolls over to Year 4.

  
  Mary’s Year 2 rollover of $170 is added to the Year 3 annual contribution of $1,500 for an HSA balance of $1,670.
  
  Case Study 2
  The next illustration is a family plan. Bob, his wife Jane, and their two children have a High Deductible Health Plan with a $5,000 deductible. The family contributes $2,000 annually to their HSA. Bob’s employer has elected to contribute $2,000 for a total annual HSA contribution of $4,000.
  
  Year 1
  

  $4,000	HSA contribution
  -$1,000	Medical expenses applied to the deductible and paid from the HSA
  $3,000	HSA balance rolls over to Year 2.

  
  In Year 1, the children see their pediatricians for annual exams and the health plan covers the expense at 100% with no deductible. In addition, the family has $1,000 in expenses for an emergency room visit and other physician visits applied to the deductible. Bob and Jane withdraw $1,000 from their HSA to reimburse the emergency room expenses. The remaining HSA balance of $3,000 automatically rolls over into Year 2.
  
  Year 2
  

  $3,000	HSA rollover from Year 1
  +$4,000	Contribution for Year 2
  $7,000	HSA balance for Year 2
  -$5,000	Medical expenses applied to the deductible and paid from the HSA
  -$225	Prescription coinsurance amount paid from the HSA.
  $1,775	HSA balance
  -$1,000	Medical expenses not covered by plan but paid from HSA
  $775	HSA balance rolls over to Year 3.

  
  The $3,000 in rollover funds from Year 2 are combined with the $4,000 annual contribution for a total HSA balance of $7,000. Jane is hospitalized for an elective surgical procedure and the family incurs $5,000 in medical expenses, which are applied to the deductible. In addition, the family has prescriptions that result in coinsurance costs of $225. The family also incurs $1,000 in other medical expenses for eyeglasses, over-the-counter medications, and acupuncture treatment. These expenses are not covered by the health plan but are considered qualified medical expenses. Bob and Jane withdraw a total of $6,225 from their HSA in Year 2. The remaining balance of $775 automatically rolls over into Year 3.
  
  Year 3
  

  $775	HSA rollover from Year 2
  +$4,000	Contribution for Year 3
  $4,775	HSA balance for Year 3

  
  The Year 2 rollover balance of $775 is added to the annual contribution of $4,000 for a total beginning HSA balance of $4,775 in Year 3.

•