HSA BASICS AND FINANCIAL STRATEGIES

Understanding Health Savings Accounts (HSAs) and

Maximizing their Financial Potential

Consumer Plan vs. PPO Plan

Consumer Plan

• Type: PPO network• Basic Concept: Lower

premiums with higher deductible

• Health Savings Account: Money not spent by the end of the calendar year rolls over to the next year and accumulates

• Limited Flex Spending Account

PPO Plan• Type: PPO network• Basic Concept: Higher

premiums with lower deductible

• Flex Spending Account: Money MUST be spent by end of calendar year or you lose it

HSA vs. FSA

HSA – Health Savings Account

• All money contributed pre-tax• Available for use for IRS qualified

medical expenses• Contribution rate can be adjusted

during year• Can reimburse yourself later in

year• Savings Tool: If you don’t spend

the money during the calendar year, it rolls over to the next.

• Can be used for medical expenses in retirement, including long term care premiums.

FSA – Flex Spending Account

• All money contributed pre-tax• Available for use for IRS

qualified medical expenses• Contribution rate fixed and

non-adjustable• Fully funded day 1• Spending Account Only: No

savings function. Use it or lose it.

How Much Can You Contribute?

Filing Status2013

IRS Max.Amway

BaseMax for

EmployeeWeekly

Bi-Weekly

Single $3250

$2000

$1250 $24 $48

Family $6450 $4450 $86 $171

> 50 Catch up $1000 $1000 N/A N/A

FSA $2500 N/A $2500 $48 $96

• Not required to contribute• Permitted to make HSA contribution rate changes

during year

Notes: Combining HSA & Limited FSA in Consumer Plan

• FSA is limited until plan deductible is met

• Only need both if:• you know you will need

more than IRS HSA limit, or• you want to maximize your

HSA rollover/accumulation

• Use for specific, planned expenses

• Be conservative with funding your FSA

IRS Qualified Medical Expenses

• Applies to both the HSA and FSA accounts

• From Acupuncture to Chiropractorto Dental Treatments to Eye Exams/Glasses to Home Care

• To Learn More, Google:• HSA Qualified Medical

Expenses • IRS Publication 502 (starting

on page 5) for a complete list from the IRS

HSA Strategies

Health Savings Account• Save little

• Take advantage of $2000 Amway contribution• Not required to contribute at all • Consider the difference in premiums as a minimum

Save little

HSA Strategies

Health Savings Account• Save little

• Take advantage of $2000 Amway contribution• Not required to contribute at all • Consider the difference in premiums as a minimum

• Save enough – enough to cover potential out-of-pocket costs

Save littleSave enough

How Much to Cover the Out-of-Pocket Maximum?

Filing Status

OPMAmway

BaseEmployee

TotalWeekly

Bi-Weekly

Single $2500$2000

$500 $10 $19

Family $5000 $3000 $58 $115

PurposeTo have enough pre-tax money to cover expenses until Consumer Plan pays 100%.

HSA Strategies

Health Savings Account• Save little

• Take advantage of $2000 Amway contribution• Not required to contribute at all • Consider the difference in premiums as a minimum

• Save enough – enough to cover potential out-of-pocket costs • Save as much as possible – roll over and accumulate

Save little

Save AMAP

Save enough

Which Bucket is Most Efficient for Medical Expenses in Retirement?

401(k)

All distributions taxed

Roth IRA / 401(k)

Principal taxed at time of contribution; growth

is not taxed.

HSA

NEVER TAXED

when used for qualified medical expenses.

MOST EFFICIENT

HSA Accumulation Strategy

• Goal – Accumulate maximum you can by rolling over as much as possible each year.

• Strategy• Fund HSA – Fully, if possible• Pay small expenses using taxed money, not the HSA.

• Establish the maximum amount you are comfortable paying out of pocket instead of with HSA. Any expenses over that amount, use HSA.

HSA Accumulation StrategyFiling Status

IRS Max.

Amway Base

Max for Employee

WeeklyBi-

Weekly

Single $3250

$2000

$1250 $24 $48

Family $6450 $4450 $86 $171

> 50 Catch up $1000 $1000 N/A N/A

Filing Status

OPMAmway

BaseEmployee

TotalWeekly

Bi-Weekly

Single $2500$2000

$500 $10 $19

Family $5000 $3000 $58 $115

Out-of-Pocket Max Strategy

HSA Accumulation Strategy

The HSA as longer-term investment vehicle• Multi-year strategy• Base

• $2500

Max OOP

Base $2500

HSA Accumulation Strategy

The HSA as longer-term investment vehicle• Base

• Remains at $2500• Tier 1 - Cash

• Automatically refills Base• OPM account

• $2500 Single• $5000 Family

Max OOP

Base $2500

Tier 1OPM

Single $5000Family $7500

HSA Accumulation Strategy

The HSA as longer-term investment vehicle• Base

• Remains at $2500• Tier 1

• Automatically refills Base• OPM account

• $2500 Single• $5000 Family

• Tier 2• Conservative Investments

• Tier 3 & Beyond• Riskier investments

Base $2500

Tier2

Single $5000Family $7500

Tier 1OPM

Single $5000Family $7500

What We Have Learned

• If you/family are healthy, the Consumer plan is a clear choice.

• The Consumer Plan’s maximum out-of-pocket cap may save you money if you:• regularly take expensive non-

preventive prescription drugs• have an unusual & expensive medical

condition or need

Your Life – Your Plan

• Transition to proactive consumer of medical services

• How you fund and spend your HSA is specific to you and your family’s situation.

• You can always adjust your contribution level during the year.

• Our take: Take advantage of free money. Amway is being extremely generous with the $2000.

Unsure? BeManaged Can Help.

• Nov. 12th – Dec. 10th – Free onsite and online consultations.

• Online Tools Available: PlanAdviser helps determine which plan is most advantageous financially.

Amway.bemanaged.com Online Tools > Estimate Medical Expenses

• Prescriptions Questions? Connect with Express Scripts

• Claims or Expense Questions? Connect with Encompass.

Schedule a Consultation

Visit us - Amway.BeManaged.com

Call us - (616) 871-0751 or

(888) 738-8780