Page 14 - Lyon Benefits Guide 01-18 National - FINAL

[EMPLOYEE BENEFITS]

MEDICAL - HOW THE HSA WORKS

A Health Savings Account (HSA) is a tax-advantaged account that you own. In 2018, Lyon Living will make the following per pay
period HSA contributions of $9.62 per employee, $19.23 per employee + 1 dependent, and $28.85 per employee + family. Lyon Living’s
contribution will be deposited into your account whether or not you decide to make your own contributions. In addition to Lyon Living’s
contribution, you may elect to contribute into your account up to IRS maximums. IRS maximums for 2018 are $3,450 for employee
coverage and $6,900 for family coverage. If you are 55 years of age or older in 2018, the IRS also permits you an additional catch-up
contribution of $1,000. 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.

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 this plan year or in future plan years. 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 Lyon Living, no longer participate in a
high deductible health plan (like the HDHP with HSA), 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 HDHP with HSA coverage if your
employment terminates.

Eligible HSA Expenses Include:

Medical Dental Vision Premiums
• Doctors/Nurses • Durable Medical • Dentists • Optometrists • COBRA
• Prescription Drugs Equipment • Orthodontists • Ophthalmologists • Long-Term Care
• Hospital • Artificial Limbs • Periodontists • Exams • Medicare
• Ambulance • Sterilization • Teeth Cleaning • Glasses
• Lab work • Acupuncture • X-Rays • Contact Lenses
• X-Ray • Chiropractic • Fluoride • Lasik Surgery
• Insulin Treatment Treatments

Ineligible HSA expenses include expenses that are not medical or health related as well as cosmetic surgery.

HSA SAVINGS COMPARISON
WITHOUT THE HSA WITH THE HSA
Gross Annual Pay $45,000 $45,000
Employee pre-tax HSA contributions used to Not Elected $1,200
pay for annual healthcare expenses (deductibles,
copays, prescription drugs, dental expenses,
vision expenses, etc.)
Taxable Gross Income $45,000 $43,800
Payroll Taxes (at 30%) $13,500 $13,140
Employee-Funded HSA Bank Account $1,200 $0
Net Pay $30,300 $30,660
Annual Savings with Pre-Tax HSA Deduction $0 $360

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