Narrator - What if there was a way to save for future health care costs that was tax-free, rolled over year to year, and goes with you even if you change medical plans or leave your employer.
Well, there is, with a Health Savings Account sponsored by your employer and administered by PayFlex.
Here’s how it works…
You can open a Health Savings Account – or HSA – if enrolled in a qualifying high-deductible health plan.
With the exception of some preventative services, this plan means you pay for medical expenses out-of-pocket until your deductible is met.
HSA can help you pay for out-of-pocket medical, dental, prescription, hearing and vision expenses with pre-tax dollars.
With an HSA you get a triple tax savings.
First, when you deposit your money from your paycheck on a pre-tax basis into the HSA, you reduce your taxable income so you pay less in income taxes for that year.
Second, any interest you earn or any growth you may gain when you invest your HSA funds is tax-free.
finally, when you use your HSA funds for eligible expenses, those withdrawals are tax-free.
It’s also good to know that with the HSA you can change your pre-tax contributions and make additional post-tax deposits during the plan year up to the IRS limit.
In most cases, once you have at least $1,000 in your HSA, you can open an investment account. Then, any funds over the $1,000 balance can be invested in a variety of mutual funds.
Some people even like to think of their HSA as a retirement account for health care, to help pay for medical premiums and long term care.
Whatever HSA funds you don’t use in the plan year roll over to the next year and may continue to grow.
When you enroll in an HSA, PayFlex provides you with helpful tools needed to manage your account.
For added convenience, you may receive a PayFlex Card, your account debit card which is linked to your HSA account allowing you to pay for eligible health care expenses at qualified merchants where debit MasterCard is accepted.
Be aware that unqualified purchase may be subject to penalties and have tax implications.
You can access your HSA virtually anytime, anywhere through our dynamic website. Or by using our innovative PayFlex Mobile App which brings the website and all of its functionality to your fingertips.
Take control of your health care spending and start enjoying all the benefits of an HSA today.
This has been a brief summary of an HSA.
For more information refer to your plan benefit materials.
Narrator - A health savings account or HSA, is a great way to save for health care cost today… and into the future.
When you first start contributing to your HSA, your contributions are placed in an FDIC insured account, which earns interest and grows tax-free.
Then, in most cases, when your HSA has a balance of at least $1000 you can begin investing in a variety of mutual funds.
It's like a retirement account for health care, with the added benefit of being able to withdraw funds for eligible health care expenses at anytime.
According to Fidelity Investments a 65-year-old couple retiring in 2013, will need roughly $220,000 to cover every day medical expenses, not including long-term care insurance throughout retirement.
A diversified group of mutual funds allows you to choose the right mix of funds based on what your most comfortable with.
To determine what's right for you, you'll find all the tools you need to select and manage your investments options online.
You'll be able to research the mutual funds options available to you and select the funds of your choice.
View your investment balances... recent transactions... contributions, and other account information.
You can also set up your account to invest all or a portion of your future contributions in the funds you select.
You have the flexibility to distribute your HSA dollars among the fund choices however you like.
For example, if your minimum required balance is $1000, as long as you maintain this balance, you can continue to invest over this amount.
If you need to pay for an eligible expense that will lower the balance in your FDIC account under $1000, you can always transfer money from your investment account to your FDIC interest bearing account.
Keep in mind that early redemption fees may apply.
Start investing in your HSA today!
Narrator - When it comes to setting aside money to pay for out-of-pocket health care expenses, you have a choice… a Flexible Spending Account or a Health Savings Account. Both options can be sponsored by your employer and may be administered by PayFlex.
The accounts are similar in some ways and different in others.
Both allow you to set aside pre-tax dollars each plan year to pay for eligible health care expenses.
Because you don’t pay taxes on this money, this can mean savings for you.
They both allow you to pay for out-of-pocket medical expenses during the plan year.
An important difference between an FSA and an HSA is whether you spend during the plan year or choose to save for the future.
The FSA is a spending account. You’re expected to spend the money you have set aside within the plan year.
FSA funds are “use it or lose it”. They do not roll over at the end of the plan year and would be forfeited.
On the other hand, the HSA is a savings account. You have the choice to save that money until you need it.
HSA funds roll over from year to year and earn interest.
Another important difference is that you have the opportunity to invest the money in your HSA.
HSA funds can be invested in various mutual funds, and accumulate tax free for future health care expenses.
To open an HSA, you must be enrolled in a qualified high deductible health plan. With the exception of some preventative services, this plan means you pay for medical expenses out of pocket until your deductible is met.
If your employer allows, an FSA can be combined with an HSA, provided that the FSA is used for only dental and vision expenses.
This has been a brief summary of FSA’s and HSA’s.
Consider your options carefully and make the choice that’s right for you.