1. What are the maximum contributions to HSAs?
2. Are there catch-up provisions for older employees?
3. What type of High Deductible Health Plan (HDHP) do I need to have in place?
4. Can you have an FSA combined with an HSA?
5. Can an employer vary their contributions to employees?

Is my account FDIC insured?
Yes. If the value of your accounts totals $100,000 or less, the funds are fully insured. You can have more than $100,000 and still be fully insured, provided the accounts meet certain requirements.

Can you tell me more about The Bancorp Bank?
The Bancorp Bank is an FDIC-insured internet bank headquartered in Wilmington, DE, with offices in downtown Philadelphia. The senior executive team at The Bancorp Bank is comprised primarily of seasoned former executives from Jefferson Bank, which, prior to its sale in 1999, was the largest Philadelphia-based financial institution.

The bank's mission is to provide customized Internet-enabled financial services to affinity groups whose members represent specific demographic groups (universities, unions, ethnic groups, etc.). The Bancorp Bank's investment in state-of-the-art technology allows it to offer the highest levels of convenience, efficiency, security, and cost savings to its valued customers.

For additional information, please visit www.thebancorp.com.

What are the maximum contributions to HSAs?
HSA contribution limits are based on “taxable” years, even if the health plan renews at a time other than the calendar year. The same annual contribution limit applies whether the contributions are made by the eligible individual, by the employer of the individual, or by any other person. The IRS Limits of contributions are as follows:

For 2008: Self-Only Coverage: Family Coverage:	$2,900 $5,800
For 2009: Self-Only Coverage: Family Coverage:	$3,000 $5,950

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 listed above regardless of their deductible. As part of the PSP service, we will ensure that an employee’s monthly election does not amount to more than the IRS mandated limit for the applicable tax year.

Are there catch-up provisions for older employees?
Individuals age 55 and older can also make additional “catch-up” contributions. The maximum annual catch-up contribution is as follows:

For 2008: $900 For 2009 and Beyond: $1,000

What type of High Deductible Health Plan (HDHP) do I need to have in place?
You must have coverage under an HSA-qualified high deductible health plan (HDHP) to open and contribute to an HSA. Generally, this is health insurance that does not cover first dollar medical expenses. Federal law requires that the health insurance deductible be at least:

For 2008: Self-Only Coverage: Family Coverage:

$1,100 $2,200

For 2009: Self-Only Coverage: Family Coverage:

$1,150 $2,300

In addition, annual out-of-pocket expenses under the plan (including deductibles, co-pays, and co-insurance) cannot exceed:

For 2008: Self-Only Coverage: Family Coverage:

$5,600 $11,200

For 2009: Self-Only Coverage: Family Coverage:

$5,800 $11,600

In general, the deductible must apply to all medical expenses (including prescriptions) covered by the plan. However, plans can pay for preventive care services on a first-dollar basis (with or without a co-pay). Preventive care can include routine pre-natal and well-child care, child and adult immunizations, annual physicals, mammograms, pap smears, etc.

Can you have an FSA combined with an HSA?
A general purpose FSA would prevent an individual from being eligible for HSA contributions. But there are alternative plan designs that will not prevent HSA eligibility. They are referred to as Limited-Purpose FSAs. The Limited Purpose FSA may only permit coverage for vision, dental, and preventive care and must be specifically spelled out in the Section 125 Cafeteria Plan document.

Can an employer vary their contributions to employees?
The comparability rules with HSAs require that the same contributions be made for all employees, which is what most employers do. However, there is an exception to this rule. The comparability rules do not apply when the HSA contributions are made through a Section 125 Cafeteria Plan.

For example, an employer may make matching HSA contributions through a cafeteria plan in amounts equal to the participant’s pre-tax salary reduction, HSA contribution or a percentage of it. Employer matching HSA contributions made through a cafeteria plan are not subject to the comparability rules; however, they are subject to the Section 125 nondiscrimination rules and eligibility requirements. Contributions and benefits tests as well as key employee concentration tests must also be applied. These rules provide more flexibility for employers that wish to vary HSA contributions on a nondiscriminatory basis.

For even more information on Health Savings Accounts, visit our HSA Tutorial at myHSAonline.com.