Page 15 - Technip Energies 2022 benefits guide

6 Good Reasons To Have an HSA

Contributions are tax-free. HSA contributions are made on a pre-tax basis. Similar to 401(k)
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pre-tax contributions, state and federal taxes are not withheld. Unlike 401(k) contributions,
there are no Social Security taxes deducted. When balances are withdrawn and used to pay
for qualified health care expenses, they come out of an HSA tax-free.

No use-it-or-lose-it. Employees may confuse HSAs with flexible spending accounts, where
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balances not used during a particular year may be forfeited. In HSAs, unused balances carry
over to the next year. HSA balances are never forfeited due to lack of use during the year.

Paying for retiree health care. Building a significant HSA balance is not only important from the
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perspective of paying for health care expenses as an active employee, account balances can also
be used to pay for health care expenses in retirement. This may allow a retired employee to avoid
using taxable 401(k) plan balances to pay for health care expenses.

Many eligible expenses. Anyone able to accumulate an HSA balance that is carried over into
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retirement may use it to pay for many routine and non-routine health care expenses. Eligible
expenses include prescription drugs, medical premiums, COBRA premiums, dental expenses,
Medicare premiums, long-term care insurance premiums and of course any co-pays, deductibles
or co‑insurance amounts.

Using HSA balances after age 65. Before age 65 any withdrawals from an HSA that are not
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used to pay for health care expenses are subject to state and federal tax and a 20% penalty tax.
After age 65, funds withdrawn from HSAs and used for non-health care related expenses are still
subject to state and federal tax but do not incur a 20% penalty tax.

Portability. HSAs are completely portable. It doesn’t matter where you work or how many times
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you may change jobs. Your HSA always remains with YOU.

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