Page 12 - Rauxa EE Guide 04-18 CA

Medical Insurance

Health Savings Account: It’s as easy as 1-2-3!

The opportunity to establish and contribute to a Health Savings Account is available when you elect the HSA Medical
option. It’s like a personal, tax-free savings account for health care expenses that earns interest. Any unused money rolls
over from year to year.

Here’s an overview of how it works:
1. You enroll in the HSA plan for Medical coverage and establish your HSA with Health Equity online during open
enrollment or any time during the year. You will receive a Welcome Packet at your home address with detailed
instructions on how to administer your HSA.
2. In 2018, Rauxa will make per paycheck HSA contributions of $20 per employee and family. These contributions can
total as much as $480 for the year. Rauxa’s contribution will be deposited in your account whether or not you decide
to make your own contributions. In addition to Rauxa’s contribution, you may elect to make contributions into your
account up to IRS maximums. In 2018, the IRS allows deferrals up to $3,450 for employee coverage and up to $6,900
for family coverage. If you are age 55 or older, you are also permitted an additional catch-up contribution of $1,000
for 2018. The portion of your paycheck that you contribute to your HSA will be taken out before you pay federal
income taxes, Social Security taxes and most state taxes (excluding state taxes in AL, CA and NJ). Any contributions
you make can be increased or decreased over the course of the year.
3. You can decide how to manage your money. The money in your HSA is yours to save and spend on eligible health
care expenses whenever you need it, whether in 2018 or during a later year. You can use the funds in your account
to pay tax-free for qualifying out-of-pocket Medical, Dental and Vision expenses such as deductibles, coinsurance
and copays. Your account balance earns interest and the unused balance rolls-over from year to year. The money is
yours to keep even if you leave Rauxa, no longer participate in a high deductible health plan (like the HSA Medical
plan), or retire. You may continue to make contributions to your HSA if you enroll in another qualified high deductible
health plan, or elect COBRA continuation coverage of your HSA coverage if your employment terminates.
HSA Savings Comparison:

John has elected to contribute $2,500 annually to his HSA bank account.

Without the With the
HSA HSA
Gross Annual Pay $45,000 $45,000
Employee pre-tax HSA contributions used to pay for annual Not Elected $2,500
healthcare expenses, deductibles, copays, prescription
drugs, dental, vision, etc.)
Taxable Gross Income $45,000 $42,500
Payroll Taxes (at 30%) $13,500 $12,750
Employee-Funded HSA Bank Account $0 $2,500
Net Pay $31,500 $32,250
Annual Savings with Pre-Tax HSA Deduction $0 $750

Keep in mind, you can change your HSA contribution amount at any time during the year; however, you must establish
your HSA through Health Equity during the 30-day enrollment window following your hire date to be eligible to receive
the full company contribution. Also, in order for an expense to be paid through your HSA account, it must be opened
and funded with at least one cent on the date when the claim occurred.

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