Page 5 - Covered 6 Employee Benefits 2021-2022

Insurance Terminology

Health Savings Account (HSA) - An HSA is a health savings account available to taxpayers who
are enrolled in a high-deductible HSA-qualified health plan. Funds from these accounts must be used
to pay for qualified health expenses. The money accrued in this account can be rolled over year after
year. Funds contributed to the account are not subject to federal income tax at the time of deposit.
The IRS sets annual limits on the amounts that can be deposited for individuals and families. Below is
a listing of the advantages if you’re considering an HSA:

• Plans will be lower in premium but may have a higher deductibles to be satisfied.
• Contributions are typically made with pre-tax dollars, which means they are not subject to

federal income tax.

• Withdrawals from your HSA are not subject to federal (or in most cases, state) income taxes if

they are used for qualified medical expenses.
• If you have money left in your HSA at the end of the year, it rolls over to the next year.

• The money in your HSA remains available for future qualified medical expenses even if you

change your HSA-qualified health insurance plan, change employers or retire. Funds left in your

account continue to grow tax free.

This year, Covered 6 LLC | DGPI is offering you the option of selecting Kaiser Permanente, HSA.
For a complete listing of covered services for each plan, please refer to your Summary of Benefits
and Coverage (SBC). If you are interested in opening a Health Savings Account, you may do so
through the bank of your choosing. Covered 6 LLC | DGPI does not manage or administer Health
Savings Accounts on behalf of employees though they do offer a High Deductible Health Plan.

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