What is an HSA?

A Health Savings Account (HSA) is a medical savings account available to individuals who are enrolled in a High Deductible Health Plan (HDHP) . The funds contributed to the account are not subject to federal income tax at the time of deposit, and unlike a Flexible Spending Account, funds accumulate if not spent. HSAs are owned by the individual, which differentiates them from the company-owned Health Reimbursement Arrangement, but similar to an individual retirement arrangement (IRA); also similar to the IRA, HSA funds can be invested and controlled by the individual.

HSAs will help to reduce employer healthcare expenses by allowing them to offer better benefit packages to their employees and provide their employees with flexibility, choice and tax advantages. The HSA provides attractive incentives for employers of all sizes and individual consumers to provide health insurance while putting healthcare decisions back in the hands of the consumers.

Who contributes to an HSA?

Individuals or employers may contribute the HSA on a pre-tax basis; if the employer contributes to the account, all employees must be treated equally. The main advantage of making pre-tax contributions is the FICA savings which amounts to 7.65% to both the employer and employee. Regardless of the tax savings associated with the deposit, the deposits may only be made for individuals covered under the high deductible HSA-eligible health plan. Deposits may be made through payroll reductions, wire transfers, and standard check deposits.

If you have individual healthcare coverage, the maximum annual contribution that you can make to an HSA is $3,000 for 2009. If you have family healthcare coverage, the maximum annual contribution is $5,950 for 2009.

Beginning in 2007, the contribution was not limited to the annual deductible under the high deductible health plan.

What and how can I spend my HSA funds?

HSA funds are designed to be used to pay for qualified medical expenses at any time without federal tax liability. There are no transaction fees associated with the Bentley, Yates sponsored HSA account; all withdrawals are free of charge. Withdrawals for non-medical expenses are treated very similarly to those in an IRA account in that they may provide tax advantages if taken after retirement age but will incur penalties if taken earlier.

With the Bentley, Yates HSA, participants will receive a Benny™ Prepaid Benefits Card as well as a check book to make qualified medical payments; online bill pay is also available.

How can Bentley, Yates help?

Bentley, Yates has partnered with The Bancorp Bank to provide its HSA services. The employee owned HSA accounts will be opened by Bentley, Yates requiring little work by plan participants. Employers no longer need to send HSA payroll deposits to multiple banks rather one lump sum deposit will be allocated to participant accounts by Bancorp. Bentley, Yates can make the transition to an HSA a smooth and fluid process that is easy to understand by both employers as well as employees.

Features and Benefits of an HSA

Employers and employees will benefit from Bentley, Yates' HSA solution in the following ways:

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