HSA

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HSAs
Health Savings Accounts
Aegis Administrative Services Inc.
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Health

Savings
Accounts
Your Health Retirement Vehicle
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What is driving up the cost of Health Insurance?

• Lifestyle Diseases account for more than 50 of
  increased healthcare spending dollars
• Claims Overpayment
• Inadequate Disease Management Programs

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The increasing cost of RX/medical care

• Small group market reform brings in high risk
  clients
• Mandated benefits
• Administrative costs
• All of these expenses are greater in the
  individual and small group health market due to
  the inability to negotiate large discounts
• The bottom Line..
• Those seeking individual and group health
  insurance need alternatives.

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Consumer-Directed Healthcare

• Whats the theory behind "consumer-directed"
  health care, a new trend in health benefits
  design. Introducing people to the actual cost of
  medical care, as the theory goes, will make them
  shrewder purchasers of medical services,
  diagnostic tests and prescription drugs -- and
  help hold down the rising cost of health
  insurance.

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Who is Buying HSAs

• Close to 2,000,000 Americans
• 37 Previously Uninsured
• 40 Make Less Than 50,000 a year
• 53 Families with Children
• 57 over age of 40
• 92 Had funds rollover to the next year

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HSAs - Choice Savings
In the traditional health care coverage approach
Individual buys a standard health plan
Once premium dollars are spent, regardless of
utilization they are gone forever
There is no opportunity for premium savings or
tax savings...
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HSAs - Choice Savings
HSA Health Savings Account
A HSA is an individual Tax-exempt Trust Account
set up in conjunction with an IRS approved high
deductible health plan. It is designed to pay
for qualified medical expenses and/or provide
savings for the future.
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Whos Eligible?
Any individual not entitled to benefits under
Medicare, not claimed as a dependent on another
persons tax return, has an IRS approved high
deductible health plan and is not covered by any
other health plan. (e.g. spouses plan) (High
deductible health plan (HDHP) may be employer
sponsored or an individual plan)
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How Do HSAs Work?
Establish a Health Savings Trust Account to cover
eligible medical expenses and/or save for the
future.
Obtain an IRS approved (Sec. 223) qualified
high-deductible health plan
Premium Savings
EQUALS
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How Do HSAs Work?

• Key Points
• The qualified high deductible health plan must
  be in place to set up the Health Savings Account.
  The health plan and the HSA are two separate
  programs.
• Keep in mind also The qualified health plan may
  be sold as stand alone catastrophic medical
  coverage.
• The insured is not required to set up the HSA
  account simultaneous with the health plan.

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Health Plan Specifications

• Plan cannot have any 1st dollar benefits except
  wellness
• Family deductible can be an aggregate or
  embedded.
• (In aggregated deductible plans, individual
  limits do not apply. e.g. in a 1,050
  single/2,100 family deductible plan, one family
  member could incur all 2,100 of the expenses to
  meet the family deductible.)

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Health Plan Specifications
A HSA account holder cannot be covered by another
health plan, but is still eligible for certain
other coverages

• Accident
• Disability
• Dental Vision
• Long-Term care

• Hospitalization indemnity
• Workers compensation
• Specified illness
• Property liability

If an employee chooses to keep double coverage,
his/her HSA would have to be considered a
non-qualified HSA.
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Health Plan Specifications

• Single Deductible
• 1,050 minimum/2,700 maximum
• Family Deductible
• 2,100 minimum/5,450 maximum
• Out of Pocket Limits
• (Including deductible and any coinsurance. Out
  of network penalties do not apply to this
  maximum.)
• Single 5,250
• Family 10,500

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What is an HDHP? (contd)

• HDHP can provide first-dollar (or below the
  deductible) coverage for Preventive Care
  benefits
• Preventive care includes
• Periodic health evaluations, including tests and
  diagnostic procedures in connection with routine
  exams, such as annual physicals
• Routine prenatal and well-child care
• Child and adult immunizations
• Tobacco cessation programs
• Obesity weight-loss programs
• Screening services (Mammograms, Pap Smears,
  Glaucoma test, and so on)
• Preventive care does not include any service or
  benefit intended to treat an existing illness,
  injury, or condition

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What is an HDHP? (contd)

• Preventive Care.
• Drugs and medications qualify as preventive care
  when taken by a person who has developed risk
  factors for a disease that has not yet manifested
  itself or not yet become clinically apparent, or
  to prevent the reoccurrence of a disease from
  which a person has recovered
• Cholesterol lowering medications to prevent heart
  disease
• ACE inhibitors to prevent reoccurrence of heart
  attack or stroke
• Treating conditions identified during a
  preventive care service or screening (for
  example, removing polyps discovered during
  diagnostic colonoscopy) is permissible as
  preventive care

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2006 HSA Contributions

• HSA Contributions are the lower of
• Selected health plan deductible
• OR
• 2,700 single and 5,450 family
• Eligible account holders over age 55 may
  contribute an additional 700 for 2006.

Excess contributions are subject to a 6 excise
tax.
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HSA Contributions

• Contributions can be deposited in lump sum or
  smaller amounts
• Made on the first of the year or anytime
  throughout the year
• Total contribution must be made by
• April 15 of the following year

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Example of Contributions
If high deductible plan is adopted July 1
August
September
July









October
November
December




only ½ of the maximum allowable contribution may
be made.

HSA
(1st year contributions are prorated based on the
number of months your high deductible
health plan is in force.)
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(No Transcript)
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HSAs Favorable With IRS

• The IRS treats HSAs similar to IRAs in that
• Contributions are tax-deductible
• HSAs earn tax-deferred income
• HSAs are portable
• Funds can be withdrawn tax-free for qualified
  medical expenses
• No use it or lose it provisions

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What About Withdrawals?
penalty!
10 penalty and income taxes due on withdrawals
for Non-qualified expenses
Elective cosmetic surgery Weight loss
programs Some health-related travel Health
insurance premiums Dietary supplements
Non-health care expenses
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What About Withdrawals?
Exception Penalty-free withdrawals for
non-medical expenses upon disability, death or
age 65.
Withdrawals subject to regular income taxes.
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What About Account Funds?

• Account may earn tax-deferred income
• Account funds may be accumulated for the future

• Not required to use HSA funds to pay current
  medical bills

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Aegis Administrative Services
HSA Transition Account Structure SAMPLE Interest
Rate Schedule Interest Subject to change at the
discretion of Banking Institution Best in Class
!
Average Daily Balance 10,000 Interest Rate 4.00 APY 4.07
5,000 - 9,999.99 3.00 3.03
2,500 - 4,999.99 2.50 2.51
500 - 2,499.99 1.60 1.61
00- 499.99 .50 .50
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Aegis Administrative Services

• Interest Bearing Checking
• Access via checks or VISA debit card
• Interest earned and paid monthly
• Monthly statements
• Year end Tax Statements
• Minimum initial deposit 100
• Monthly ACH deposit available at no additional
  cost
• 24 hour access to account balance and transactions

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Aegis Administrative Services
SAMPLE Account Fee Structure Best in Class!
Setup Fee No Charge
Interest Checking Account with Mutual Fund Sweep Option No Charge
Monthly Fee 3.00
Sweep Option No Charge
Initial one hundred fifty checks No Charge
Check Transactions No Charge
Initial Debit Card No Charge
2nd Initial Debit Card No Charge
Debit Card point of purchase No Charge
ATM withdrawal at participating ATM No Charge
Debit Card point of purchase using PIN No Charge
Internet Banking No Charge
Internet Bill Pay No Charge
Close Account Fee 25.00
Monthly Statement No Charge
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Aegis Administrative Services

• HSA Account Options
• Interest Bearing Checking Account
• Check access
• Debit card access
• Investment Alternatives
• Mutual funds options
• Minimum Account Balance 2,500 / 4,500 to invest

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Aegis Administrative Services

• Customer Service Standards
• Performance standards
• HSA Administration - 90 of completed
  applications submitted within 24 hours
• 2004 Performance (97 submitted within 24 hours)
• 2005 Performance (98 submitted within 24 hours)

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Wellness HSA
Brokers/Agents Service your clients with a turn
key HSA Wellness Solution! HSA accounts
automatically include access My Healthy
Lifestyle, the ultimate all-inclusive buying
club for Health Lifestyle creating the
Wellness HSA. Use HSA dollars when spending
money on healthcare expenses and realize
discounts while meeting your deductibles Savings
is anywhere from 20 to 60 off of retail pricing
for all healthcare services! Supplement
your everyday health and lifestyle expenses
that are incurred in a proactive and healthy
lifestyle experience.   Easy and convenient
electronic enrollment and payment functions
provide centralized administration. Tracking and
reporting tools necessary to adjudicate deductible
s seamlessly at the point of services to your
health plan!       
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My Healthy Lifestyle 

• About My Healthy Lifestyle 
• Created by the leading experts in the fields of
  natural health, lifestyle, fitness and wholesale
  discount buying clubs.  My Healthy Lifestyle
  Members shop on-line and access savings on a
  large variety of services and locations
  nationwide all at wholesale pricing with savings
  from 20 to 60 with our special incentive
  plans.
• www.MyHealthyLifestyle.com
• Exclusively offered to Brokers/Agents through
• Aegis Administrative Services, MGA

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Aegis Administrative Services

• Customer Service Standards
• Customer Calls - 90 of customer calls returned
  within 1 business day, 100 returned within 3
  business days
• 20004 Performance (95 returned within 1 day)
• Abandonment rate of 5 or less
• 2004 Performance Inbound calls 85,147
• Abandoned rate 2.83
• Average speed to answer 6.2 sec
• Written Correspondence - 90 within 7 business
  days, 98 within 14 business days
• 2004 Performance (100 within 7 business days)
• Written Complaints - 100 within 5 business days
• 2004 Performance (1 complaint, 100 addressed
  within 3 business days)
• 2005 Performance (0 complaints)

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Health
Savings
Accounts
Aegis Administrative Services
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Aegis Administrative Services 6970 W. Diversey
Avenue Chicago, IL 60707 888-881-2307 HSA_at_aegis
admin.com
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The information contained in this publication is
for general purposes only and is not intended,
and should not be construed, as legal,
accounting, or tax advice or opinion provided by
Aegis Administrative Services, Inc. to the
reader. This material may not be applicable or
suitable for, the readers specific circumstances
of needs. Therefore, the information should not
be used as a substitute for consultation with
professional accounting, tax, or other competent
advisors. Please contact an Aegis Administrative
Services professional before taking any action
based upon this information.
DISCLAIMER