Title: Introducing HSAs Health Savings Account Plans Ron Hale
1IntroducingHSAsHealth Savings Account
PlansRon Hale Associates, Inc.authorized
broker
2- Todays Health Insurance Market is in an
- Affordability Crisis
3- Affordability Crisis for Small Groups
- Current Expensive Insurance Plan Designs
- The consumer is insulated from the true cost of
healthcare by low deductibles and copays.
4- Affordability Crisis for Small Groups
- Once, medical insurance was a responsibility.
- Today, many consider it an entitlement.
- This, coupled with perceived lower cost due to
office visit and Rx copays is driving health
insurance premiums into the stratosphere.
5-
- Its time to reverse the trend
- of expensive copays
6- The true purpose of major medical insurance is to
protect people from financial hardship due to
unforeseen illness and injury.
7- New Opportunity
- Health Savings Accounts (HSAs) the newest
Consumer Choice Health Plan option are - Tax free
- Tax deductible
- Permanent
- Portable
-
- John Alden makes selling HSA Plans
- simple and easy!
8- New Opportunity
- HSAs are
- Part of a permanent, federally approved program
effective January 1, 2004. - Available with a qualified high-deductible health
plan. - Tax-favored accounts that allow funds to be
accumulated to pay qualified healthcare expenses. - Similar in concept to an IRA but substantially
more powerful.
9- New Opportunity
- Moving Employees to New Plans
- Show substantial premium and tax savings that
employer and employees will receive. - Align consumer habits with a realistic
understanding of the cost of healthcare services. - Reverse consumer trends away from expensive
premiums for copays and other offerings that
increase price without delivering benefit.
10- New Opportunity
- Consumer Choice Health Plans
- Address affordability by providing
- Significant premium savings
- Substantial tax savings
- Solid protection from catastrophic financial loss
- Include a funding program to help employees pay
for their medical expenses - Feature simple plan designs
11- John Alden HSA Plans
- Clients choose one of John Aldens
premium-saving high-deductible plans - Single Family
- Deductibles Deductibles
- 1,200 2,400
- 2,000 4,000
- 2,500 5,000
- 3,000 6,000
- 3,500 7,000
- 4,000 8,000
- 5,000 10,000 Varies by state.
-
12- John Alden HSA Plans
- Benefit Percentage Benefit percentages for John
Alden HSA PPO Plans are - Network Non-Network
- 100 70
- 80 60
- 50 50
- Varies by state.
13- John Alden HSA Plans
- Family Deductible Accumulation
- Common Family Deductible the entire family
deductible must be satisfied before benefits are
paid for any family member.
14- Premium Savings
- The amount of premium savings depends on the John
Alden plan deductible selected. - Current plan Copay plan, 500 deductible, 80/60
coinsurance, 2,000 out-of-pocket - Approx
- Plan Deductible Coinsurance Savings
-
- 1,200 single/2,400 family 50/50 29
- 2,500 single/5,000 family 80/60 44
- 3,000 single/6,000 family 50/50 57
- 5,000 single/10,000 family 100 57
Based on John Alden rates. Actual amounts will
vary.
15- John Alden HSA Plans
- John Alden HSA Plans are
- Affordable premium savings of up to 50
depending on deductible. - Secure John Alden has more than more than
40 years experience selling and servicing health
plans. - Easy to choose and use specially designed
plans and expert services.
16- John Alden HSA Plans
- Realize the maximum benefits that HSAs offer
- Selection choose from several
premium-saving high-deductible plans. - Simplicity 100, 80 or 50 coverage
- after deductible.
- Flexibility multiple medical plans.
17- Investment Opportunities
- Ownership
- The funds in the HSA belong to the employee
whether contributed by the employer, the employee
or both. - The funds are also portable, so if an employee
leaves, he/she takes the funds along.
18- HSA Contributions
- First-year contributions depend on when a
qualified - high-deductible health plan was in force
- If a high-deductible health plan is in force as
of January 1st, the maximum HSA contribution is
2,600 singles/5,150 families or an amount equal
to the deductible whichever is less. - If a high-deductible plan starts after January
1st, the maximum HSA contribution is prorated
based on the number of months the plan will be in
force during the calendar year.
19- HSA Contributions
- Anyone can contribute employers,
employees or both - Maximum contributions for 2004 are limited to
- the lesser of
- An amount equal to the deductible, or
- 2,600 for singles or 5,150 for families
- Contribution limits are indexed for inflation
so they will change annually on January 1st
20- HSA Contributions
- Account Contributions
- Lump sum or smaller deposits
- Employer contributions must meet comparability
rules - Can contribute up to April 15th of the following
year
21- HSA Contributions
- Catch-Up Contributions
- People age 55 and older can make additional
annual contributions - Year Additional Amount
- 2004 500
- 2005 600
- 2006 700
- 2007 800
- 2008 900
- 2009 thereafter 1,000
22- Tax Advantages
- Tax-Free Withdrawals for Qualified Medical
ExpensesAs defined under Section 213(d) of the
IRS Code - Deductibles and coinsurance
- Over-the-counter medications
- Glasses, contacts or Lasik eye surgery
- Dental services including orthodontic work
- COBRA continuation premiums
- Long-Term Care premiums
- Medicare premiums
- Much more!
23- HSA Account Administrator
- MSAver Resources L.L.C.
- John Alden-Endorsed HSA Administrator
- Toll-free number 866-889-8578
- Web site www.nstarmsa.com
24- HSA Account Administrator
- MSAver provides
- Convenient ways to pay for expenses with HSA
funds - Checkbook
- Debit Card
- Easy ways to save and build HSA funds
- Earn interest tax free
- Keep money in the savings account
- Move money into an investment account
25- HSA Account Administrator
- MSAver offers an array of investment choices
- Money market funds
- Stocks and bonds
- Over 8,000 mutual funds
26- HSA Account Administrator
- MSAver makes investing easy for your clients
- Helps employee open a brokerage account
- No large balance required
- HSA funds can be traded online
- Money can be moved back and forth between the
investment and savings accounts - Access to the brokerage account is available
24 hours a day through internet trading
27- Investment Opportunities
- Unused funds accumulate from year to year so
the employee has several good choices - Use the money to pay for qualified expenses
tax free as they occur - Save money tax free for future medical
expenses - Build savings and establish a tax-sheltered
nest egg for retirement
28- Investment Opportunities
- An employee who wants to build savings has
options - Keep the money in the savings account
- Invest funds in money market funds, mutual
funds, stocks, bonds, etc.
29HSA vs. IRA
- HSA
- Contributions are tax deductible to everyone with
a qualified high-deductible health plan - Tax deduction does not fade out with income
- Qualified withdrawals are tax free
- IRA
- Tax deduction is limited to certain individuals
- Tax deduction fades out with income
- Qualified withdrawals taxed as ordinary income
-
30- Seize the Opportunity!
- Over 40 of businesses with 10 employees or
less do not offer health insurance. - Congressional analysts estimate that up to 40
million HSAs will be established in the next
decade.
Sources Kaiser/HRET Survey of Employer-Sponsored
Health Benefits, 2002, Statistics of U.S.
Business, 2000 Joint Committee on Taxation.
31Presentation Disclaimer This presentation
includes information regarding HSAs. Information
is provided with the understanding that John
Alden and its subsidiaries and Ron Hale
Associates are not engaged in rendering tax or
legal advice. John Alden and Ron Hale
Associates disclaims any and all liability for
creation or administration of an HSA. Examples
are presented for illustrative purposes only. If
tax or legal advice is required for an HSA, seek
the services of your professional advisor.