HSA’s Triple Tax Benefits – but Know the Gotcha’s

1. HSAs Are a Tax Savings Triple Threat… but Know the Gotchas Synergy Benefits, Inc. 267 West Wieuca Road, NE, Suite 204 Atlanta, GA 30342 404-256-1700 ext. 220 rcollier@synergybenefits.com www.synergybenefits.com www.rachaelcollier.com © 2018 All rights reserved.

2. HSAs are a Tax Savings Triple Threat… but Know the Gotchas Many people are familiar with 401(k)’s and that they provide a tool to fund for your retirement with some pre-tax advantages. However, when it comes to saving for your healthcare future, many are confused about HSA’s. Health Savings Accounts is an important financial planning tool that offer three distinct tax benefits. 1.The Health Savings Account allows a person to pay for qualified expenses and concurrently save for their future healthcare expenses. If an employee has their contributions deducted from their paycheck through payroll deduction, they are pre-tax. Or if they contribute after-tax, they can line item the deduction on their tax returns. 2.Most HSA bank accounts provide interest, any interest earned is tax-free. 3.If an account holder spends the money in their HSA account for qualified expenses, it’s tax-free. There are some gotchas that need to be disclosed. The maximum you can contribute (including employer contributions) is: 2018 Single $3450 | Family $6900 If 55 or older an additional $1000 catch up provision. Some states do not offer pre-tax savings from a state tax-free perspective (all offer federal tax-free savings). •Alabama •California •New Jersey You must be enrolled in a qualified High Deductible Health Plan (HDHP) Deductible minimums $1350 (2 x Family), out of pocket max $6,650 (2x Family), no copays prior to the deductible. * New Hampshire (interest earnings are taxed) * Tennessee (interest earnings are taxed) If you are 65 or older AND enrolled in Medicare, you are unable to contribute money to your HSA bank account. If you are under the age of 65 and use the HSA money for non-qualified expenses, a 20% penalty will apply in addition to paying tax on that service/item. If you are over the age of 65 the penalty does not apply, however, use of money for non-qualified expenses are not tax-free. If you are a non-disabled veteran and have used your VA benefits in the past 90 days, you are not HSA eligible. However as of January 1, 2016, if you are a veteran with service-connected disabilities and are covered by a HDHP with an HSA, you may be able to use HSA benefits and also receive VA medical services. If you cover your adult dependent child (up to the age of 26, per ACA law)., the adult dependent must be considered a tax dependent of the parent. If they are not, they need to set up their own HSA bank account, as long as they are covered under the parents qualified HDHP Plan. © 2018 All rights reserved.

3. If you cover your domestic partner (same or opposite gender) since the IRS does not consider a domestic partner as a legal spouse, each domestic partner would have to open separate HSA bank accounts. Also, each domestic partner can’t use their HSA money to pay for their partners expenses. Individuals should seek tax guidance from a tax attorney for details. This does not apply to lawfully married couples. Anyone can contribute to the HSA, employer, employee, family member, friend. Money in the HSA rolls over year after year allowing a person to save for their healthcare future. HDHP plans combined with an HSA provide an excellent tool for the claimant to manage their expenses. Also, we usually manage our own money better than if someone else (ie: insurance company or employer) are paying for our bills. Thus, HDHP plans that have more consumerism associated with it, tend to run better (lower claims) than traditional copay plans. Let Synergy help you create a competitive HDHP plan with an HSA bank that offers competitive programs, transparency tools and investment options. Questions or concerns? Contact Rachael Collier, RHU, REBC, CVBS Senior Partner| Human Capital Practice Synergy Benefits, Inc. 267 West Wieuca Road, NE, Suite 204 Atlanta, GA 30342 404-256-1700 ext. 220 rcollier@synergybenefits.com www.synergybenefits.com www.rachaelcollier.com © 2018 All rights reserved.