An HSA is a tax-exempt savings account that is owned by an employee, and contributions may be used for the payment of current and future qualified medical expenses on a tax-free basis. HSAs allow employees to make their own health care decisions. Employees understand their needs better than anyone, so it stands to reason that they - not an insurance company - should decide how to spend their money.

In order to take advantage of HSAs, you must be covered by a qualified High Deductible Health Plan (HDHP). Employers and employees both benefit greatly by HDHPs. HDHPs reduce employer expenses by lowering the amount they spend on health insurance premiums. With the employer spending less money on insurance premiums, they can put more money back into their employees' pockets in the form of HSA contributions.

Benefits

HSAs benefit employers and employees in many ways: Triple Tax Savings Contributions are tax-free, potential interest gains are tax-free and distributions are tax-free when used to pay for qualified medical expenses. Freedom Employers can set up and/or change insurance plans without changing their HSA administrator or custodian, since eBenefits Administrators is an independent administrator. Unused Contributions Accumulate The remaining account balance conveniently rolls over year after year. Investment Options Features include management workflows for automatic investment, redemption and real-time balance updates. There is also support for external HSA investment portals, enabling employees to automatically transfer HSA cash balances in/out of their investment accounts. Flexibility Funds can be used to pay for current medical expenses such as deductibles, coinsurance and co-payments, as well as dental and vision care and over-the-counter medications not covered by the insurance plan. In addition, the money can be saved and used for future needs such as: Health insurance or medical expenses during times of unemployment or temporary layoff Medical expenses after retirement before Medicare Out-of-pocket expenses when covered by Medicare Long-term care expenses and insurance Note: As of January 1, 2011, HSA funds can no longer be used to purchase over-the-counter medicines and drugs unless the medicine or drug is prescribed. Portability Accounts move with employees even if they change jobs or retire.

Contributions

Both the employer and employee can make contributions to an HSA. There are two primary methods for employers to add contributions to their employees' HSAs: Contributions Based Upon the IRS' Comparability Rules All contributions made to employees must be the same. Variances are allowed only if they are based on employees' dependency status Contributions Made Through a Section 125 Cafeteria Plan Governed under Section 125 of the internal revenue code, employee-funded Section 125 Cafeteria Plans help both employers and employees save money by using tax-free dollars to pay for eligible expenses. Every HSA dollar deducted pre-tax through a Section 125 Cafeteria Plan saves the employer 7.65% in matching FICA. Employers can avoid the IRS's comparability rules with this method and choose from one of the following options: Matching Contributions: If an employee makes HSA contributions via payroll deduction, the employer can match that contribution or a percentage of it. Wellness Contributions: If the employer adopts a wellness program, they can base HSA contributions on employee participation in various wellness initiatives. Contributions can be a set dollar amount, or they can be established by implementing a point system with a dollar value assigned to the points being earned. This method is subject to the Section 125 nondiscrimination rules and eligibility requirements. Contributions and benefit tests, as well as key employee concentration tests, must be applied. A third contribution option can be a combination of the two options above. Employees may add contributions through payroll, check or electronic fund transfer or through other family members. Contributions are calculated on a monthly basis and cannot exceed the monthly limitations for all months in which the employee is an eligible individual. However, new IRS legislation allows an individual to contribute up to the IRS maximum limits regardless of their deductible. The 2012 individual coverage contribution limit is $3,100 and the limit is $6,250 for family coverage. HSA contribution limits are based on taxable years, even if the health plan renews at a time other than the calendar year. Note: Individuals age 55 and older can also make additional "catch-up" contributions until they enroll in Medicare.

Debit Card Access

Debit Card Access Our optional debit card, the mySourceCard® MasterCard® Debit Card, takes funds directly from an established HSA account to pay for eligible out-of-pocket expenses at any qualified service provider that accepts MasterCard®. Transactions post online instantly, eliminating the hassle of claim forms and reimbursement checks and, in most cases, the need to submit receipts.

Online Account Access

Participants may access their HSA information via HSAToday's secure web site, www.myHSAToday.com. The web site provides 24/7 access to the following: Account balances & payment history Deposit & withdrawal capabilities Important forms & documents Latest news & benefit updates Account statements Investment options

Online Receipt Storage

The Claims Vault™, provided by HSAToday, is an online "shoebox" where participants can store their eligible expense receipts indefinitely. Expenses incurred today can be reimbursed decades later, allowing participants to build up interest tax-free and ensuring they do not miss out on any tax benefits. Participants may view the status of their requests for withdrawal and claims receipts online anytime, and copies of the receipts are available whenever needed.

Comprehensive Administration

eBenefits Administrators provides complete, comprehensive administration of HSA services. Our experienced team effortlessly navigates the complex world of HSAs, taking care of enrollment, account set-up, implementation, education, staff training and account administration with complete financial integration. To ensure successful and effective plan adoption, we thoroughly cover tax advantages, general IRS rules, contributions and qualified expenses. Most importantly, we give employees the personalized support they need to understand and utilize all of the advantages an HSA offers. We are dedicated to providing all-inclusive, on-call customer care before, during and after enrollment. An employee can simply pick up the phone or email us anytime they have a question or concern. Contact us today to learn more.