Page 11 - Omega Benefits Guide

Health Savings Account

Provided by Allegacy Federal Credit Union
If you are enrolled on the Core medical plan with United HealthCare you are eligible to
open a Health Savings Account (HSA) through Allegacy Federal Credit Union. An HSA is a tax-exempt
savings account established for the purpose of paying for the qualified medical expenses of an individual
and/or his or her spouse and tax dependents. HSA’s are designed to provide eligible individuals with the
following federal tax benefits:

• HSA contributions are tax-free.
• Interest and other earnings on HSA contributions accumulate tax-free.
• Amounts distributed from an HSA for qualified medical expenses are tax-free as well.

HSA’s are offered in combination with high deductible health plans (HDHPs); your core medical plan
with UHC. To be HSA-eligible, an individual must be covered under a qualified HDHP and not also
covered by another health plan that is not an HDHP (with a few exceptions, including disability, dental
care, vision care and long-term care insurance). In general, money placed into an HSA can be withdrawn
at any time. Any HSA withdrawal used for a purpose other than to pay for qualified medical expenses is
taxable as income and subject to an additional 20 percent penalty. After an individual reaches age 65,
the additional penalty tax does not apply to HSA withdrawals.

Omega Contributions to Employee HSA Plans
 If you elect Employee only coverage, Omega will contribute $105 per month ($1260 per year) to
the Employee’s HSA Plan.
 If you elect Employee + Spouse, Employee + Child(ren) or Employee + Family coverage, Omega
will contribute $30 per month ($300 per year) to the Employee’s HSA Plan.
 Amounts Omega contributes to the Employee’s HSA Plan will reduce the amount of the annual
contribution allowed to an HSA Plan.

Qualified Medical Expenses
The Internal Revenue Service (IRS) defines qualified medical care expenses as amounts paid for the
diagnosis, cure or treatment of a disease, and for treatments affecting any part or function of the body.
The expenses must be primarily to alleviate a physical or mental defect or illness.

Examples of HSA Qualified Medical Expenses:

• Acupuncture • Chiropractor • Fertility Enhancement
•
•
• Annual Physical Examination • Contact Lenses • Hospital Services
Laboratory Fees
• Artificial Limb • Crutches • Lactation Expenses
Bandages
•
• Birth Control Pills • Diagnostic Devices • Medicines
Eyeglasses
• Body Scan • Operations

For 2018 there is a $3,450 annual limit for individuals and $6,900 limit for 2 or more people in a family.
In addition, there is a $1,000 catch up contribution for those individuals age 55 or older.

You are allowed to contribute the entire year’s limit whenever you first become eligible for the HSA
(even if that is in December). However, you must remain eligible for at least 12 months after that date,
or you will be subject to taxes and penalties on the amount you contributed.
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