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HEALTH SAVINGS ACCOUNT 2012

A Health Savings Account, or HSA, is a custodial account established to receive tax-favored contributions on behalf of eligible active employees enrolled only in a qualified high deductible health plan (as defined below) to pay for qualified medical expenses. The IRS regulates HSA plans, so many of the plan design features below are a result of those regulations.

More Information

♦  Contributions

♦  Eligibility

♦  High Deductible Health Plan

♦  Contribution Limits

♦  Eligible Expenses

♦  Account Funding

♦  HSAs and FSAs

♦  Fees

♦  Account Balance

♦  Enrollment Process

♦  Additional Resources

♦  Whom to contact

 

Contributions

Amounts are contributed to an HSA on a pre‐tax basis, earnings on those contributions accumulate tax free and distributions are not subject to tax if they are used to pay for eligible medical expenses for employees and their dependents. Contributions made in one year do not have to be used to pay expenses in that year and may be carried over to pay eligible medical expenses at anytime in the future. Similarly, expenses in any year do not have to be reimbursed during the year that they were incurred. Dartmouth is offering the ability for employee's to make contributions through a voluntary payroll deduction.

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Eligibility

To be eligible to contribute to the HSA, you must meet all the following criteria:

•  You must be enrolled in a high‐deductible health plan (HDHP);

•  You may not be covered by a health plan that is not a HDHP;

•  You may not be enrolled in benefits under Medicare;

•  You may not be claimed as a dependent on another person's tax return and

•  Not enrolled in a Health Flexible Spending Account (FSA).

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High Deductible Health Plan

To participate in the HSA, Dartmouth employees must be enrolled in the College's high deductible health plan. Our high deductible health plan is an Indemnity plan with Anthem Blue Cross Blue Shield and has the following plan design:

•  An annual deductible of $2,500 for individuals and $5,000 for families; 

•  No deductible for qualified preventive care; 

•  Prescription drugs are subject to the deductible; 

•  An annual out‐of‐pocket maximum of $2,500 for individuals and $5,000 for families.

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Contribution Limits

The annual HSA contribution limit is the statutory maximum contribution.

•  For calendar year 2012, the maximum contribution for an eligible employee with individual coverage is $3,100, and the maximum contribution for two‐person or family coverage is $6,250.

For individuals age 55 and older can also make an additional "catch‐up" contribution of $1,000.

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Eligible Expenses

You can use the money in the account to pay for any "qualified medical expenses" permitted under federal tax law. This includes most medical care and services, dental, and vision care. You can pay for expenses of your spouse and dependent children even if they are not covered by your HDHP. For more details about qualified medical expenses, please refer to IRS Publications 969 and 502.

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Account Funding

Funds have to be available in the account in order for the participant to be reimbursed for eligible expenses. You can authorize Fidelity's debit card provider, PNC Bank, Delaware to issue a HSA debit card to you or request a checkbook for your Fidelity HSA. The debit card and check book can be used to pay a provider directly for eligible expenses. All record keeping for tax purposes is the responsibility of the employee.

Funds will be initially deposited into a FDIC insured interest bearing checking account. Once the account value is greater than $2,500, the participant will be given the opportunity to invest the excess in their choice of a variety of funds with varying degrees of risk offered by Fidelity.

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HSAs and FSAs

If an active employee enrolls in the HSA, they are not eligible to enroll in the Health FSA plan at the same time. Also, employees enrolled in an HSA may only be reimbursed for out‐of‐pocket health expenses up to the current balance in their account and will need to wait until deposits into the account create a sufficient balance to be fully reimbursed.

In accordance with IRS regulations, if an employee enrolls in the HSA and had a Health FSA in the previous calendar year, they will not be able to begin their HSA contributions until April 1. Also, they will only be able to contribute 9/12ths of the maximum annual limit. For 2011, the individual maximum is $2,287.50 and family maximum is $4,612.50.

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Fees

Dartmouth College will pay the administrative fees for all active employees who participate in the plan. Once the employee terminates or retirees, the fee will be the responsibility of the employee.

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Account Balance

If you are no longer covered by an HSA‐eligible health plan but still have funds in your Fidelity HSA, you can still use the funds in your account to pay for qualified medical expenses federally tax free. The funds in your HSA remain in your account until used.

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Enrollment Process

After electing the high deductible health plan (Indemnity):

For calendar year 2011, you elect the Health Savings Account by using the Health Savings Account Election Form. Once filled out, this original, signed form should be returned to the Benefits Office at Hinman Box 6042 or 7 Lebanon Street, Suite 203, Hanover, NH 03755. For calendar year 2012, you elect the Health Savings Account electronically only via FlexOnline (no longer mailing the paper form).

Your election will then be processed by the Benefits Office and Fidelity Investments. You will be contacted by Fidelity and asked to open an account. Until you open an account with Fidelity, you will not be eligible to make contributions to your HSA. Also, any expenses you wish to submit for reimbursement must be incurred after the date in which you open your account with Fidelity. Once your account is opened, your contributions will begin through pre‐tax payroll deduction.

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Additional Resources

•  Fidelity HSA Presentation(23 minutes)

•  Fidelity HSA Reference Guide

•  Fidelity HSA Checklist

•  Fidelity's "Four Things to Know About Health Savings Accounts

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Whom to Contact

If you have questions regarding your election form or paycheck deductions, please contact the Benefits Office at mailto:human.resources.benefits@dartmouth.eduor 603-646-3588

For account and investment questions, you should contact Fidelity at 1-800-544-3716

Please note that some questions, such as eligibility and tax questions may best be answered by a qualified tax accountant or consultant.  When contacting the Benefits Office or Fidelity, some questions may be referred to these types of specialists.

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Last Updated: 3/3/13