Page 11 - Surfline Benefits Guide 2017
P. 11

Medical







          How the Health Savings Account (HSA) Works

          The PPO HSA Option includes two components:
          •   A high deductible health plan (Blue Shield Silver PPO HSA) that consists of medical, prescription drug, mental health and substance abuse
              benefits. You make before-tax contributions from your paycheck for this coverage. All services (except preventive care) are subject to the
              plan deductible before the plan begins to pay.
          •   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, if you choose.


          The illustration below shows the basic steps to how the PPO HSA Medical plan works. For more benefit details on the medical plan coverage,
          see page 9.


            1    You pay the full cost for most expenses (including the full cost for most prescription   You can use your tax-
                 drugs) until you meet the annual deductible.
                                                                                           advantaged HSA dollars to
            2    Once you meet the annual deductible, you pay the cost of medical services and   pay for eligible medical and
                 prescription drugs through coinsurance (the percentage of costs that the PPO HSA   prescription drug benefits on
                 Medical plan pays, and that you pay, or copays).                         the PPO HSA Medical Plan. In
                                                                                           addition, you may use your
            3    If the total amount you pay (your deductible cost plus your coinsurance) reaches   account to pay for eligible
                 your annual out-of-pocket maximum, then the PPO HSA Medical plan will pay   dental and vision expenses.
                 100% of eligible costs for the rest of the year.



          IRS maximum allowable contributions:
          •   2017: $3,400 for individual coverage and $6,750 for family coverage
          •   2018: $3,450 for individual coverage and $6,900 for family coverage
          •   If you are 55 years old or older, you may contribute an extra $1,000
          •   To take advantage of tax savings, consult your banker and tax-consultant to set-up a personal HSA Bank


          How can you benefit from tax savings?
          The PPO HSA Medical plan provides triple tax savings by reducing your Federal, State and FICA taxes. Contributions to your HSA can be
          made with pre-tax dollars up to the IRS maximum allowable amount (shown above), which reduces your taxable income and any after-tax
          contributions that you make to your HSA are tax deductible. HSA funds earn interest tax-free and when used for eligible healthcare expenses,
          are also free from tax. Your contributions will be deducted pre-tax from your paycheck and automatically transferred to your bank account
          through HealthEquity for you to use.


                                                                         Without the              With the
                                                                             HSA                    HSA
           Annual Salary                                                    $60,000                 $60,000
           Employee pre-tax HSA contributions used to pay for annual healthcare   Not Elected       $2,500
           expenses (deductibles, copays, prescription drugs, dental, vision, etc.)
           Total Taxable Income                                             $60,000                 $57,500
           Estimated annual taxes: approximately 25% tax bracket            $15,000                 $14,375
           Savings with pre-tax deduction for health care expenses            $0                     $625
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