Beginning in 2011 EPISD has contracted with JPM Chase as the Health Savings Account Administrator

Health Savings Account

A Health Savings Account (HSA) is a special tax-advantaged medical savings account owned by an individual used to pay for current and future medical expenses. It combines high deductible health plans with a tax-free Health Savings Account that you and your covered family members can use to pay out-of-pocket expenses such as copays and deductibles, or leave unspent to grow as savings. Each year, the HSA can be funded up to the IRS maximum by you, your employer or both. You control the HSA, giving you the flexibility to decide how, when and where to spend your health care dollars and the HSA is “portable” which means you keep the funds even if you change health plans, take a new job or retire.

WHO IS ELIGIBLE FOR AN HSA?

In accordance with IRS rules, any adult can contribute to an HSA if he/she:

• Coverage under an HSA-qualified high deductible health plan.


• No other first-dollar medical coverage (other types of insurance such as specific injury or accident, disability, dental, vision or long-term care are permitted).


• Is not enrolled in Medicare.


• Cannot be claimed as a dependent on someone else’s tax return.

WHICH TRS-ACTIVECARE PLANS QUALIFY FOR AN HSA?

TRS-ActiveCare 1-HD meets the IRS definition of a high deductible health plan for all coverage categories (Employee Only, Employee Spouse, Employee Children and Employee Family).

TRS-ActiveCare 1 meets the IRS definition of a high deductible health plan for Employee Only coverage.

Participation in an HSA is voluntary. You are not required to participate in the HSA.

Health Saving Account Contribution Limits & IRS Guidelines

The following chart shows maximum HSA contributions for the 2011 tax year.

	2011
Contribution Limit - Individual	$3,050
Contribution Limit - Family	$6,150

NOTE:  The HSA follows a Tax Year (January 1 - December 31) for the purposes of IRS maximum contributions. EPISD does not oversee or manage the contribution maximum. It is the employee's responsibility to ensure that contributions for the tax year do not exceed the annual maximum based on individual circumstances and in accordance with the IRS rules governing a Health Savings Account.

Catch-up Contributions

Individuals age 55 and older, who are covered by an HDHP, can make an additional $1,000 catch-up contribution each year until he/she enrolls in Medicare. Individuals age 55 and over can make catch-up contributions directly through Internet Banking or by mailing a personal check.

Healthcare Reform and HSAs

On March 23, 2010, President Obama signed into law far-reaching healthcare financing legislation. The following is an overview of the impacts to Health Savings Accounts (HSA). Some of the changes will be effective January 1, 2011. Here is what to expect:

• Qualified Medical Expenses: Starting January 1, 2011 you will no longer be able to pay for over-the-counter medications from your HSA as a qualified medical expense. Until the end of this year, you can reimburse yourself or pay from your HSA the money used to buy over-the-counter medications. The new law removes over-the-counter drugs not prescribed by a physician from being paid from an HSA, FSA, or HRA on a tax-free basis.


• Non-qualified expense penalty: Effective January 1, 201, under the new law, if you use your HSA funds for non- qualified expenses, you will face a higher penalty. The tax penalty for non-qualified HSA distributions increases from 10% to 20%.

How do I get started?

To establish an HSA account, you must take several steps:

1. Click on the link to establish an account with JPM Chase “Online Enrollment LINK”


2. You will need to know the effective date of coverage under the TRS-AC 1-HD or the TRS-AC 1 plan options.


3. Once you have received confirmation that your account with JPM Chase has been set up, you will need to complete the EPISD/Chase Health Savings Account Authorization for Payroll Deduction Form in order for EPISD to begin payroll deductions.

Health Savings Accounts have tax and legal ramification. Nothing herein should be construed as legal or tax advice.