About your HSA

The Medicare bill that was signed by President Bush in December 2003 contained a very exciting provision. This law enacted a new program called Health Savings Accounts (HSA). An HSA is a personal savings account for medical expenses that you or your family may have in the future.

The best part is, you can make Tax-Free contributions to your HSA, earn interest that is Tax-Free, and withdraw your savings Tax-Free.

Here is how they work:

First, you must be a participant in the specially designed insurance program offered by NovaSys Health. This plan is called the HSA PPO.

Then, you make monthly contributions to your HSA. The contributions are Pre-Tax, which means that the amount is deducted from your paycheck before federal or state taxes are calculated.

Finally, as you or your family members incur certain medical expenses, simply withdraw the money from your account. This can be done electronically through the Internet or by submitting a paper form to the HSA Administrator, DataPath Administrative Services.

Understanding the Savings

Besides getting a reduction in your monthly insurance premiums, the HSA offers significant savings opportunities both in the current year and for the future.

Immediate Savings

You can make monthly contributions to your HSA on a pre-tax basis, reducing your taxes on every paycheck. This can increase your Net Take Home Pay by hundreds of dollars over the course of a year. Plus, the more you contribute, the more you save.

Long-Term Savings

Many people have heard of the "Use it or Lose it" rule for Flexible Spending Accounts. This is where you have to spend every dollar of your annual election or else you will forfeit the remaining balance. This is NOT the case with an HSA. If you contribute $1,000 for this year and only incur expenses of $250, then your can save the remaining $750 for next year, or the year after that or the year after that. It never goes away, until you withdraw the money.

Start Saving Today for Health Tomorrow

From time to time, we are all faced with medical expenses. It may be the prescription medication that you take for high blood pressure or the trip to the emergency room for a broken arm. One thing is for sure; we will all have medical expenses in the future. Health Savings Accounts allow you to start saving today, for a healthy tomorrow.

When those medical expenses do come up, you have access to your HSA 24 hours a day, 7 days a week through an Internet site: www.myrsc.com. This system provides you with a gateway to your HSA where you can enter a medical expense in the "Claims VaultSM", see your account balance and earned interest, make additional contributions, download documents or forms, and request a disbursement or withdraw from your account.

You can also manage distributions on two different schedules for each individual expense that you or your family incur, as outlined below.

First In - First Out

This approach provides immediate distribution of the HSA funds as soon as you incur an expense. This will typically occur when your insurance carrier, NovaSys Health, electronically sends us an EOB (Explanation of Benefit). EOBs are generated for a majority of your medical expenses such as a doctor's visit or hospital stay. As the EOB is received from NovaSys Health, we will enter the expense into the system and remit the available HSA funds directly to your personal checking or savings account.

Accumulated Disbursement

This allows you to save your receipts, either personally or electronically on www.myrsc.com, and get the money from your HSA at a later time, maybe years after the expense was actually incurred. This may be the best approach for an individual who is looking at the long-term savings of the HSA. The longer that the HSA can accumulate an account balance, the more interest that can be earned.

Access your
HSA Account

Resources

The IRS Giveth and the IRS Taketh Away

HSAToday Account IRA/FSA/HRA
Transfer Form

ArkansasHSA
Investment Guide

ArkansasHSA
Debit Card Enrollment Form

ArkansasHSA
Statement Summary Guide