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A Health Savings Account (HSA) is a cross between a flexible spending account, an IRA, and a 401k). Pre-tax contributions are taken via payroll deduction and placed in an investment account. This reduces your federal, state, and FICA taxes and allows you to earn additional income on these funds. You then have access to this account to pay for eligible medical expenses. In addition, your account can grow, year-to-year, tax deferred. BCBSM has selected Mercantile Bank as their preferred financial services company. The HSA account is the employee’s property. Like a 401(k), it is your money and stays with you, even if you no longer work for PML.
HSA Participation Rules
To participate in an HSA, you must be enrolled in a high-deductible health plan (HDHP). An HDHP is a comprehensive health plan with an annual deductible of at least $1,050 for an individual and $2,100 for two or more family members.
To participate in an HSA, you cannot:
Contributing to an HSA
When you participate in an HDHP; you set aside money to pay for eligible out-of-pocket expenses. Money can be contributed to your HSA up to the amount of the deductible. If you are age 55 or older, you can make an additional contribution amount of $700 in 2006. The additional amount increases by $100 each year until it reaches $1,000 in 2009. The HSA cannot receive contributions after you have enrolled in Medicare.
You can contribute an up to $2,000 for a single and $4,000 for a family. If you are not enrolled in a HDHP for the entire calendar year, this contribution will be prorated for the number of full months you are enrolled. This money is yours. There is no vesting requirements or forfeiture provisions. And, unlike flex spending accounts, HSAs do not have a "use it or lose it" requirement. Your account balance rolls over from year to year.
Using Your HSA
Money in your HSA can be used to pay for a variety of healthcare-related expenses ranging from routine physicals to prescription drugs. To pay for expenses, you simply present your HSA Visa® debit card to your provider, and money will be deducted directly from your HSA. You may also submit a claim manually via mail, or fax to receive reimbursement, typically within 7-10 business days. Unlike the FSA, the funds must be in the account in order to receive reimbursement.
Keeping track of your account balance is easy. You can review your account information 24/7 by logging onto NGen Technologies, LLC or by calling the automated toll-free phone service at 866-364-9759. HSA customer service representatives are available between the hours of 7 a.m. and 8 p.m. (CST).
Your HSA money is tax-free as long as it is used to pay for qualified medical expenses. If you use the money for any other reason, you will be required to pay income tax and a 10% tax penalty on that amount (you will not pay a penalty if you are disabled or age 65 or older). It is up to you to keep the supporting records to show the Internal Revenue Service whether you used the funds to pay qualified medical expenses.
The Following Employee Health Benefits Are Available To Full Time Employees
Medical Expense / Hospitality Indemnity Plan
Women's Health & Cancer Rights Act
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