ConnectYourCare and Zions Bank’s Health Savings Account (HSA) Information

1. ConnectYourCare and Zions Bank’s Health Savings Account (HSA) Information

2. HSA Overview

3. What is a Health Savings Account (HSA)? • A HSA is like a 401(k) for healthcare. HSAs are tax-advantaged accounts that accumulate interest and can earn investment returns. The funds can be used to pay for qualified medical expenses today or can be saved for future expenses. • Account Advantages • Triple tax savings • Interest and investments • Multiple uses • Easy to access  • Portable – it stays with you when you leave your company or retire Unlike traditional insurance where you only benefit if you use it, with an HSA, you can spend your HSA on today’s expenses, or save and invest your HSA funds for future expenses or for retirement!

4. Who is eligible for an HSA? • Any individual or employee can open and make contributions to an HSA, if they meet all of the following requirements: • covered by a qualified HDHP • not covered by other health insurance • not enrolled in Medicare • can’t be claimed as a dependent on someone else’s tax return • Children cannot establish their own HSAs • Spouses can establish their own HSAs, if eligible • No income limits on who may contribute to an HSA • No requirement of having earned income or being employed

5. HSA Contribution Rules • Contribution to HSA can be made by the employer, account holder, or others • If made by the employer • not taxable to the employee (excluded from income and wages) • If made by the account holder • can be made pre-tax through a cafeteria plan for w-2 employees – OR - • can be made post-tax and recorded as a “above-the-line" deduction on tax return • If made by others on behalf of account holder • deducted by the account holder • Contributions for a taxable year may be made in one or more payments as long as they are made by April 15 of the following year • Excess Contributions • Contributions in excess of the account holder’s maximum limit are not deductible • An excise tax of 6% for each taxable year is imposed on the account holder for all excess contributions • Excise tax can be avoided if the excess contribution and any interest attributable to it are distributed by the last day for filing taxes, including extensions

6. HSA Contribution Limits • Eligibility is determined as of the first of each month • Maximum Annual Contributions for 2010 and 2011* • Individual: $3,050 • Family: $6,150 • For individuals age 55 and older, additional “catch-up” contributions allowed • 2010 and 2011 - $1,000 • *These amounts reflect IRS regulations and are indexed annually for inflation. If you want to contribute the total annual amount for a tax year in which you were only HSA eligible for a portion of that year, you must remain HSA eligible through the end of the next tax year or face tax penalties.

7. Rollovers of Existing IRA Funds Into HSAs • One-time tax-free irrevocable rollover from IRA into HSA • Use existing IRA to fund HSA • IRA distribution not subject to 10% tax on early distributions • IRA rollover counted toward annual HSA contribution limit • Must remain HSA-eligible for a 13 month period from the month of the rollover • Only one IRA rollover allowed unless coverage is self-only at time of roll-over and later switches to family coverage • Example. Sally Parker has self-only coverage effective September 1, 2010 and is HSA-eligible. • With the new legislation, Sally may rollover up to $3,000 from her IRA in 2010. • Sally’s total HSA contributions for 2010 cannot exceed $3,000. • Sally must remain eligible for September 1, 2010 through September 30, 2011 to avoid taxes and penalties • If not, she is taxed on $3,000 IRA distribution, plus 10% penalty.

8. HSA Distributions • Distributions allowed at any time without restriction • Distribution is tax-free if taken for “qualified medical expenses” incurred by one of the following after HSA was established: • the account holder • spouse of the account holder • any dependent of the account holder • even if not covered by the HDHP • Qualified medical expense must be incurred on or after the HSA was established • If HDHP coverage effective on first day of month, HSA can be established as early as first day of same month • If HDHP coverage effective any day other than first day of month, HSA cannot be established until first day of following month

9. Qualified Expenses under an HSA • Medical expenses for the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body that are not reimbursed by another source • Dental and vision expenses • Premiums for COBRA continuation coverage or for health insurance while collecting unemployment compensation • Retiree health insurance premiums for account holders age 65 or over other than a Medicare supplemental policy • Long-term care premiums, not to exceed the annually adjusted “eligible long-term care premiums” in the Internal Revenue Code • ConnectYourCare is not responsible for determining if distributions are for qualified expenses

10. No Time Limit on HSA Distribution • Shoebox example 1: Incur expense before balance has accumulated • Establish an HSA on January 1, 2010 with $1,000 contribution • Incur qualified expense of $1,500 on February 1, 2010 • Contribute additional $1,000 on March 1, 2010 • Withdraw $1,500 tax-free on April 1, 2010 • Shoebox example 2: Hold off on reimbursement for years • Establish an HSA on January 1, 2010 with $2,000 contribution • Contribute $2,000 every January 1 thereafter for 10 years • Incur qualified expense of $1,500 each year and save receipts • Earn interest and make investments with accumulated balance • Withdraw $15,000 tax-free on April 1, 2019 • Retain interest and investment earnings in HSA • Can continue to receive tax-free distributions for qualified expenses even if no longer covered by an HDHP

11. HSA Savers Pay for current eligible expenses out of pocket and earn returns on your HSA balance; save receipts for future withdrawal.

12. Using HSAs for Not Qualified Expenses • Permitted, but taxable • Distribution included in account holder’s gross income • In general, subject to additional 20% tax (10% for funds withdrawn before January 1, 2011). • 20% tax (10% before January 1, 2011) does not apply if distribution is after the account holder’s death, disability or 65th birthday • Mistaken distributions can be returned to the HSA if distribution was due to a mistake of fact • For example, account holder mistakenly believed an expense was qualified • April 15th in the year after the distribution was made • Returned distribution is not taxable and not subject to additional 20% tax (10% before January 1, 2011)

13. Examples of Qualified Medical Expenses • Acupuncture • Alcoholism treatment • Ambulance • Artificial limb • Automobile modifications for physically handicapped • Birth control pills • Blood pressure monitoring device • Braille books & magazines • Chiropractic care • Christian Science practitioner • COBRA premiums • Contact lenses & related materials • Crutches • Dental treatment • Dentures • Diagnostic services • Drug addiction treatment • Eye examination • Eye glasses & related materials • Fertility treatment • Flu shot • Guide dog or other animal aide • Hearing aids • Hospital services • Immunization • Insulin • Laboratory fees • Laser eye surgery • Long-term care premiums or expenses • Medical testing device • Nursing services • Obstetrical expenses • Organ transplant • Orthodontia (not for cosmetic reasons) • Over-the-counter medications • Oxygen • Physical exam • Physical therapy • Prescription drugs • Psychiatric care • Retiree medical insurance premiums • Smoking cessation program • Surgery • Transportation for medical care • Weight loss program to treat obesity • Wheelchair

14. Examples of Qualified OTC Expenses Please note, many OTC medications will only be eligible for purchase until December 31, 2010. Items that will no longer be eligible after that date are marked with an asterisk *. See www.connectyourcare.com/otc for more information. • Acne medications • Allergy prevention/treatments* • Anesthetic mouth gels and rinses • Antacids and acid reducers* • Anti-itch creams • Antiseptics • Bandages and dressings • Cold and flu medicines* • Cold sore remedies* • Contact lens solutions • Decongestants* • Eye drops • Eye patches • Oral pain relievers* • Pain and fever relievers* • Prenatal vitamins • Reading glasses • Sinus medications* • Smoking cessation products • Sunburn creams/sun block • Wart and corn removers

15. Examples of Not Qualified HSA Expenses • Illegal operations and treatments • Maternity clothes • Moisturizers and wrinkle creams • Teeth whitening, teeth whitening products • Toothpaste, toothbrushes and mouth wash • Sun tan lotions (w/o sun block) • Cosmetic surgery • Cosmetics • Denture supplies • Deodorant • Exercise equipment • Fitness programs • Funeral expenses • Hair transplants • Household help • Vitamins

16. CYC and Zions Bank’s Services Overview

17. Online CDH Portal • 24 x 7 real-time access to: • Obtain real-time account balances • Review transaction history – contributions, interest earned, and distributions • Manage investment options • Make additional, non-payroll contributions • Add/update personal and direct deposit information • Submit reimbursement withdrawal requests, review request status and view reimbursement schedule • Access a variety of health education and wellness tools

18. Accessing HSA Funds: Option 1 • Healthcare Payment Card • Use it at healthcare locations where Visa is accepted • Use it for qualified healthcare items • Automatically records purchase online • Money comes directly out of your account • No need to pay upfront and wait for reimbursement • Cannot be used at ATMs • Multiple ConnectYourCare accounts are accessible with the same card (if offered by your employer)

19. RapidRequest- Pay out of pocket for a qualified expense and receive quick and easy reimbursement! Claim information entered and submitted online (paper claim forms can be used if necessary) Once submitted, participant can immediately view the request to ensure its receipt Reimbursement can be made via direct deposit or check Always show your insurance ID card! Accessing HSA Funds: Option 2

20. Health Education Tools • A variety of WebMD tools are available in the online portal. • WebMD Hospital AdvisorSM— Hospital information and rankings for specific procedures • WebMD Medication AdvisorSM— Information on less expensive prescription options • WebMD Treatment Cost AdvisorSM— Cost estimates on 350 of the most common medical conditions, tests, and procedures • WebMD Health TopicsSM— A to Z medical encyclopedia listing of over 1,500 ailments with information, treatment options, prevention, and more • WebMD HealthQuotientSM— State-of-the-art assessment tool that scores participants’ health status, calculates risk levels, and provides recommendations for health improvement and behavior change • Symptom Checker — Information about what medical symptoms could indicate and helpful facts before a doctor’s visit

21. HSA Interest & Investment Options • Interest Rates • FDIC insured • Competitive tiered rates • Investment Options* • $2,500 minimum balance required to invest; funds have minimum investment levels • Online investment, trade and balance reporting • Range of investment choices from a variety of fund families *Shares of mutual funds are not FDIC insured.

22. Customer Service Channels • Robust Online Portal • Real-time Account Balances • Transaction History • Interactive Voice Response • Account Information • User Name Reminder or Password Reset • Email • Interactive Communication Method • Limited to Basic Operations, Not Used for Personal Health Information (PHI) • Live Customer Assistance • Detailed Questions or PersonalAssistance • Representatives Trained in Adjudication and Call Assistance

23. Frequently Asked Questions How much can I contribute to my HSA? For 2010 and 2011, you can contribute up to $3,050 for individual coverage and $6,150 for family coverage. Individuals ages 55 or older (and not yet enrolled in Medicare) can make additional "catch-up" contributions of up to $1,000 per person in 2010 and 2011. How will I be able to access my account funds? You will receive a healthcare payment card from Customer Service to access your HSA funds. You can also pay for eligible expenses with any other form of payment and request reimbursement from your account. When can I request reimbursement from my account? You have access to the account when your plan becomes effective.

24. Frequently Asked Questions, continued What happens if I use the account for a non-eligible expense? If you use your Health Savings Account (HSA) to pay for an ineligible expense, you may be required to pay income taxes and an additional penalty tax. When will I get my healthcare payment card? You will receive your card in the mail about two to three weeks after the close of your enrollment period. The card comes in a white envelope. Your name and address will show through a window on the envelope. Along with the card, you will find information on how to use the card and how to gain access to your member portal. How many healthcare payment cards do I get? Each participant receives one card. You may order an additional card for your spouse or dependent through your online account or by calling customer service. When ordering a card in a spouse or dependent’s name, please be prepared to submit that person’s full name, date of birth and social security number.

25. Reasons to Love Your Account • HSAs offer triple tax savings: contributions, earnings, and qualified withdrawals are all tax free. • You can earn interest and make investments with your HSA funds. • You can use your HSA to pay for hundreds of qualified expenses. • The online CDH Portal puts account and health information at your fingertips. • The healthcare payment card makes it easy to access account funds. • The withdrawal process is fast — no paper forms. • HSAs are portable; the account stays with you when you leave your company or retire.

26. Quiz • What is an example of a qualified expense? • Where can you use your healthcare payment card? • Do you still need to save receipts? • What happens if you use your card for an ineligible expense? • Can you manage your investment options directly from your online account? • If you forget to use your card, can you still request reimbursement?