Page 10 - KNCH Benefits Guide 2019 v3

MEDICAL INSURANCE

HOW THE HEALTH SAVINGS ACCOUNT (HSA) WORKS

The HSA plan includes two components:
1. A health plan that consists of medical, prescription drug, mental health and substance abuse benefits. You make before-tax
contributions from your paycheck for this coverage.
2. A Health Savings Account, or “HSA,” is a bank account funded by you that gives you the opportunity to save and pay for
current and future eligible healthcare expenses with pre-tax dollars.

The illustration below shows the basics steps to how this medical option works.

1 You pay the full cost for most expenses (including the full cost for You can use the HSA, a
most prescription drugs) until you meet the annual deductible.
tax-advantaged saving and
spending account, for
2 Once you meet the annual deductible, you pay the cost of medical eligible medical
services and prescription drugs through coinsurance (the
and prescription drug
percentage of costs that the medical option pays, and that you expenses. See pages
pay).
5 and 7 for more HSA
details, including
3 If the total amount you pay (your deductible cost plus your
coinsurance) reaches your annual out-of-pocket maximum, then annual IRS contribution
the medical option will pay 100% of eligible costs for the rest of the maximums.
year.

HSA OPTION HIGHLIGHTS
• You’re covered in full for most preventive care services when you use network providers. Checkups, immunizations, routine
screenings, and even some prescription drugs — they are covered at 100% when you visit network providers.
• You’re protected from excessive costs. Your out-of-pocket expenses are limited to the annual out-of-pocket maximum which
includes your deductible and the percentage of the cost you pay for medical services and prescription drugs. If the cost you
pay for covered services reaches the annual out-of-pocket maximum, you’re covered at 100% for the rest of the year.
However, if you use a non-network provider, your out-of-pocket costs (including your out-of-pocket maximum) will be
higher. In addition, the amount the HSA option will cover towards out-of-network expenses will always be subject to
reasonable and customary limits.
• You can save, invest and spend tax-free using your HSA. Only the HSA option lets you use a Health Savings Account to save
tax-free for eligible out-of-pocket healthcare expenses to include dental and vision. Please reference Section 213(d) for a
complete list of the eligible expenses defined by the IRS. Spend the money now or save it for future healthcare expenses
even when you retire or leave Koeller, Nebeker, Carlson, & Haluck. The money rolls over from year to year – meaning
there’s no “use it or lose it” rule!
• For 2019, as an HSA holder, you can choose to save up to $3,500 for individual and $7,000 for family coverage, and for 2020, up to
$3,550 for individual and $7,100 for family coverage (if you are 55 years old or older, you can save an additional $1,000) - and these
contributions are 100% tax deductible from gross income.

KEEP IN MIND
You can change your HSA contribution amount at any time during the year. However, you must establish your HSA through HSA
Bank during the 30 day enrollment window after your hire date.

Educational Video
Click here to watch a quick video to learn the basics of how our the HSA medical plan works.

HSA Compatible High Deductible Health Plan (HDHP + HSA)
http://video.burnhambenefits.com/hdhp/

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