BlueAccount HSAYour Guide to

Please keep this Guide for future reference.

SM

An HSA is a tax-advantaged savings account that’s available to people whose healthcare coverage is provided through a qualified high-deductible health plan. Since thedeductible—or amount you must pay out of pocket before these plans begin to coverbenefits—is high, establishing an HSA to pay for your out-of-pocket care expensesmay help you save money.

• HSA contributions and earnings are tax-exempt.

• HSA distributions are also tax-exempt as long as they are used for eligible medical services.

• HSA balances may accumulate tax-free interest or investment earnings from year to year.

• HSA dollars are portable—they go where you go even if you leave your current employer.

BlueAccount HSA helps you “Have a Greater Hand in Your Health®” throughgreater control over your health care spending. With an HSA, you put your healthcare dollars into the investment vehicles of your choice. You can also choose how you useyour account dollars. You can invest for ready access to your funds or you can invest forfuture care expenses and potential growth.

Why Open a BlueAccount HSA?While other companies may offer Health Savings Accounts, integrating your HSA withyour health care coverage through Mountain State Blue Cross Blue Shield (MSBCBS)makes good sense, both financially and in terms of account and coverage convenience.

• Easy to Open: It’s quick and convenient to establish your HSA through MSBCBS. Youopen your account online through your member Web site and take advantage of oneWeb site to manage both your health coverage and your Health Savings Account.

• Easy to Access: BlueAccount information is also easy to access. You can view both yourtransaction history and account balance online in one central location on your memberWeb site.

• Easy to Manage: You can elect to have MSBCBS automatically send unpaid claims toyour HSA or you can submit only the claims you want—using an HSA debit card orby submitting claims online or via paper. You can even choose to pay care providersdirectly from your account.

• Investment Choice: Your BlueAccount HSA gives you the opportunity to invest ina variety of mutual fund options.*

Read more about BlueAccount HSA and how we can help you make the most of yourcoverage by helping you make informed care choices…

Does BlueAccountSM HSA make sense for you?Want to save, tax-free, for future care expenses? Thenyou’ll want to consider an HSA, or Health Savings Account.

* Note: You do not have an individual account at the bank. Also, shares of mutual funds are not deposits orobligations or guaranteed or endorsed by any bank, nor are they federally insured or otherwise supportedby the FDIC or any other governmental agency, and may lose value.

HowBlueAccount HSAWorks

3BlueAccount HSA Guide

Your BlueAccount HSA is

easy to maintain and track.

You simply log onto your

member Web site at

www.mybenefitshome.com

where you can access all

of your account information

at any time.

How to Use Your BlueAccount HSA

1. You receive eligible health care services.2. Your provider submits a claim toMSBCBS or the local Blue Plan, whichwill then submit a claim to MSBCBS.

3.We process the claim and determinethe provider’s allowable charges. Wealso apply your payment liability towardsyour deductible.

4. If the deductible has not been met,no payment is made and the providermay bill you. If the deductible has beenmet, the claim is paid by MSBCBS asa program benefit claim.

5. You receive an EOB (Explanation ofBenefits) statement with claim informationin the mail or, for more convenience, youcan opt to automatically receive yourEOBs online.

6. You have three options for paymentof health care services. You can:• opt for a debit card to pay for servicesdirectly;• submit each claim online;• elect to have all your claims automati-cally submitted to your spendingaccount for reimbursement.

Your choice is made when the BlueAccountHSA is opened, but can be changed atanytime.

7. You receive an EOP (Explanationof Payment) statement.

Make the smart decision and opena Health Savings Account

Accumulate savings fromyear to year for futuremedical expensesWith the rising costs of health careand a greater need for medical careas you age, it only makes senseto invest and save for your future.With an HSA, your contributionsmay accumulate over time, to helpbetter prepare for future care costs.Your HSA is designed to be therewhen you need it—today or evenafter you retire. In fact, after youturn 65 your HSA funds can beused for your medical premiumssuch as Medicare.

Mutual funds choicesto meet your needsYour BlueAccount HSA allowsyou to select investment optionstailored to your needs. There isan FDIC-insured, interest-bearingbank account to provide readyaccess to your account balance,as well as a variety of mutualfund options that offer longerterm growth potential.

Reduced net cost to youA high-deductible health plan withan integrated HSA combines taxbenefits with a practical way topay for your out-of-pocket healthcare expenses. You can save ontaxes and on your expenses forhealth care services not coveredunder your health plan. You canuse your HSA to pay for these“qualified medical expenses” withthe same ease and convenience asyour covered health care services.

“Triple Tax Advantage”for even more savingsLower your tax bill with your HSAin three ways:

1. Cash contributions during a taxyear are deductible from yourfederal gross income.

2. Any earnings in your HSA accu-mulate on a tax-deferred basis.

3. Withdrawals from your HSA forqualified medical expenses arefree from federal income tax.

Simple to use—fastand automaticIt’s easy to set up your HSA online,and experienced customer servicerepresentatives are available toassist you if you have questionsabout opening your account.

To simplify the ongoing adminis-tration of your HSA, all contribu-tions to your account will be madeto an FDIC-insured, interest-bearing

bank account until your balancereaches $500. At that time, youwill be able to use the onlinefeatures of the HSA program todirect future deposits into otheravailable fund options or to movefunds among your chosen invest-ment options.

All requests for reimbursement ofhealth care expenses are fulfilledfrom your account. You can easilytransfer available balances onlinefrom your other investmentoptions to the account if additionalamounts are needed to cover yourreimbursement request.

It’s also easy to keep track of yourHSA activity—either through yourmailed account statements oronline, where you can view yourcurrent account status.

Certain fees apply to the BlueAccount HSA.Details are available online or in the HSAApplication Package.

4 BlueAccount HSA Guide

Make Informed Care DecisionsAs a Mountain State Blue Cross Blue Shield (MSBCBS) member, youhave easy online access to a wide range of care cost and providerquality tools to help you make informed care decisions. At yourmember Web site, you can:

• Look up typical medical expenses for a wide range of outpatientcare procedures.

• Compare costs at network hospitals for elective inpatient andoutpatient procedures.

• Learn how much medications cost and see if you have accessto a lower-cost generic medication.

5BlueAccount HSA Guide

Online convenienceand care cost toolsYour member Web site is your“one-stop” to easy and informedmanagement of your health caredollars.

You simply log ontowww.mybenefitshome.comto access your BlueAccount HSA.Everything you need to use youraccount funds, submit claims, checkaccount balances, view deposits,transaction and care claims is onlinein one easy central location. Youeven have your own personalexpense summary to track yourcare costs. And you can connectto tools that can help you spendyour health care dollars wisely bylooking up typical costs for medicalservices and quality measures onhospitals and care providers.

How to manage yourBlueAccount HSA:

With BlueAccount HSA you getyour care exactly as you would withany MSBCBS program, meaningyou show your ID card to yourhealth care provider. You alsohave the same broad selectionof care providers.

The only difference is in thedeductible and other cost-sharingportions of your coverage. WithBlueAccount HSA, you decide eitherto use the money in your accountor pay out-of-pocket and save youraccount money for future care.Any unused account funds auto-matically roll over from year toyear. And your account funds areportable—they go where you go,even if you change employers.

Not yet logged into yourMember Web site?Your first step is to get yourPersonal Identification Number (PIN).

• Go towww.mybenefitshome.com

• Click on “Log in” in thegreen box.

• Click on “Register now”in the red box.

• Complete the informationrequested. Have your MSBCBS IDcard and e-mail address handy.

• Create your login ID, passwordand security question (rememberto keep this information).

• Click “Submit.”

• Within 3 business days, you’ll getyour PIN in the mail. Go to yourmember Web site and enter yourlogin ID and password, and thistime only, enter your PIN.

6 BlueAccount HSA Guide

Frequently asked Questions about HSAs

What is a Health SavingsAccount (HSA)?A Health Savings Account (HSA) isa savings account that can be usedto pay medical expenses as well asto save for future qualified medicalexpenses on a tax-advantaged basis.Contributions, earnings and distri-butions are exempt from federalincome and Social Security (FICA)taxes when used to pay for quali-fied medical expenses.

Visit www.treas.gov/offices/public-affairs/hsa for detailedinformation about HSAs.

Who is eligible to openan HSA?To be eligible to open an HSA,you must be enrolled in a federallyqualified high-deductible healthplan. You cannot be:

• covered by any health plan otherthan a high-deductible healthplan (dental and vision plans arenot included in this restriction);

• enrolled in Medicare; or

• claimed as a dependent onanother individual’s tax return.

Can my employer contributeto my HSA?Contributions to HSAs can be madeby you, your employer, or both.Please refer to your member mate-rials to determine if your employeris contributing to your HSA onyour behalf.

What can the HSA be usedfor on a tax-preferred basis?The HSA can be used for “qualifiedmedical expenses,” as defined bythe IRS in Section 213(d) of theInternal Revenue Code. Broadlyspeaking, these are health careexpenses for the prevention andtreatment of health conditions,including dental and visionexpenses. They exclude servicesthat are cosmetic in nature.

In addition, you can use the HSAto pay for certain types of healthinsurance premiums, including:(1) qualified long term careinsurance, (2) COBRA health carecontinuation insurance, (3) healthcare coverage while receivingunemployment compensation,and (4) if you are over 65, premiumsfor Medicare Parts A and B, aMedicare Advantage Plan, or yourshare of employer-sponsored healthinsurance. Note that premiums forMedicare supplemental (Medigap)policies are not qualified expenses.

You cannot use the HSA to pay forservices already reimbursed else-where, such as through your healthplan. In other words, you could useit to pay for expenses attributableto your deductible or to your portionof any coinsurance, but not foramounts paid by your health planafter the deductible is met.

When does eligibility foran HSA begin and end?You can establish an HSA on thefirst day of the month that youhave coverage under a qualifiedhigh-deductible health plan andare otherwise an eligible individual.If you obtain a high-deductiblehealth plan after the first of themonth, you are not eligible tocontribute to the HSA until thefirst day of the following month.

You lose eligibility to establishor contribute to an HSA if youbecome covered by a health planother than a qualified high-deductible health plan, becomeenrolled in Medicare, or becomea dependent on another individ-ual’s tax return. However, losingeligibility does not mean you losethe right to use the money in yourHSA. You can keep the HSA andcontinue to use the funds on a tax-preferred basis for qualified medicalexpenses. You cannot contributeto the HSA or establish anotherHSA unless you become an eligibleindividual again.

7BlueAccount HSA Guide

Whose responsibility is itto ensure that I am eligiblefor an HSA, to monitor thecontribution limits, and touse the funds for qualifiedmedical expenses?As the taxpayer, you are responsible.Neither the health plan, youremployer, nor the HSA custodianhas any obligation to verify thatyou are using your HSA in accor-dance with the law. You shouldconsult your tax advisor to ensurethat you understand HSAs andyour eligibility.

How much can becontributed to an HSA?In 2010, the maximum amountyou may contribute to your HSAeach calendar year is $3,050 foran individual with high-deductiblehealth plan coverage only forhimself/herself or $6,150 for high-deductible health plan coveragefor a family. If you are 55 or older,you may also be able to make anadditional “catch-up” contributionof $1,000. These IRS amounts willbe indexed each year for inflation.These contribution maximumsapply to all account holders regard-less of when during the year theybecome eligible. Visit www.treas.gov/offices/public affairs/hsa foradditional details.

Once you are no longer an eligibleindividual—e.g., you lose yourqualified high-deductible healthplan or become enrolled in Medicare—you can no longer contribute toyour HSA, but you can utilize thefunds for eligible expenses.

Do I have to contributethe maximum?You can contribute any amountup to the maximum. However,most HSAs include minimumrequirements for initial and/orongoing deposits.

When can contributionsbe made?Contributions, via individuals orpayroll deductions, can be madeat any time during the tax year, upto the filing limit for your federalincome tax return. Contributionscan be made on a periodic basis(e.g., monthly) or in one lump sum.

Can I transfer funds from anyother investment to my HSA?Your employer may allow a one-time tax-free rollover of FSA orHRA funds. Also, a one-time tax-free transfer of IRA funds to anHSA is now permitted.

Are there any restrictionson my HSA program?Generally, the money in youraccount is yours to manage as youdeem appropriate. Some restrictionsdo apply to BlueAccount HSA:

• Only specified mutual fundscan be selected in yourBlueAccount HSA. You canobtain the list of funds bycalling BNY Mellon HealthSavings Account MemberServices at 1-877-245-0116.

• You must have at least $500 inthe FDIC-insured bank accountbefore you can invest in mutualfund options.

• You are not required to maintaina $500 balance in this bankaccount, but distributions canonly be made from this account.If you have money in mutualfunds, you are responsible fortransferring funds to the bankingaccount if additional amountsare needed to cover your reim-bursement request.

• Your HSA must have a minimumbalance of $50 for as long asyou maintain it. A request forreimbursement that reduces youraccount balance below thisamount will be reduced in orderto keep the required minimum.

• Deposits to your account mustbe at least $25 if made outsideof payroll deductions.

Blue Cross, Blue Shield and the Cross and Shield symbolsare registered service marks of the Blue Cross andBlue Shield Association, an association of independent

Blue Cross and Blue Shield Plans.

BlueAccount and Blues On Call are service marksof the Blue Cross and Blue Shield Association.

BlueAccount HSA Advantages:

• You enjoy “triple tax” advantages. Account contributions,earnings and qualified distributions are all tax-exempt

• You control your benefits spending

• You have a wide selection of mutual fund offerings

• You can track and submit claims and monitor and manageyour account all conveniently online.

• Blue Plan savings provide care at a reduced cost

• 24/7 support for your health care decision-making throughyour member Web site and Blues On CallSM

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