Need a smarter way to plan and pay for your health care? A consumer-directed health plan typically gives you lower monthly premium costs – and workplace contributions – in exchange for a higher deductible amount. And if your high-deductible plan includes a Health Savings Account – known as an HSA – your HSA can help you plan for and meet that deductible, along with any other out-of-pocket costs.

Because HSAs let you or an employer set aside pre-tax and tax-deductible dollars to be used for qualified medical expenses such as:

• deductibles
• coinsurance
• prescriptions
• dental expenses
• vision care
• long-term care insurance
• COBRA premiums and more

Along with tax advantages that help you keep more money in your pocket, using your HSA to pay for medical expenses empowers you with the flexibility and choice to make wiser health care decisions.

HSAs at a glance

1. You and/or an employer contribute funds to your HSA account
2. Funds go into an IRA-type account through payroll deduction
3. You can contribute up to the deductible amount -- or $2,650 – whichever is less
4. You own the money in your account – it’s yours
5. You can move the account with you if you change jobs
6. Funds roll over each year, so your account can continue to build
7. Contributions are tax-deductible
8. You earn interest on the account
9. You can use a debit card to pay qualified medical expenses
10. Reimbursable expenses are defined in IRS Section 213d

In addition, you can use your HSA funds to pay COBRA and long-term care premiums, but not health insurance premiums. Withdrawals for non-qualified expenses are taxable, plus carry a 10% penalty

How an HSA works

With an HSA, you learn more about the true cost of care by using your HSA funds to pay for medical services and prescription drugs. As a result, you learn how to choose and buy health care services more wisely. You also save pre-tax dollars for health care needs in the future – something we all should do. With an HSA:

1. You get to think and act more like a consumer when it comes to health care – comparing cost, quality and value.
2. When you visit the doctor, dentist or pharmacist, your HSA is designed to help you pay the entire costs at the time of service.
3. Your HSA covers all out-of-pocket costs as long as there are funds available in your account
4. Be sure to use services wisely and budget the funds in your account to last throughout the year
5. Remember to take advantage of our pre-negotiated discounts, and be sure to choose providers who participate in your plan’s specific Blue Network (P, S, or K).

Tips on using your HSA

Here are a few things to keep in mind when using your HSA.

When paying for medical services:

1. Ask your provider to estimate the amount of your financial responsibility before accepting services.

2. Choose a provider that participates in your specific Blue Network so you benefit from the discounts we have arranged with that provider.

3. Always check your Explanation of Benefits form (EOB) after a claim is submitted. The EOB will show what you owe the provider.

4. If your EOB shows you owe less that what you paid your network provider, the provider will reimburse you that amount. If you don’t receive a refund within a reasonable time, check with your provider to see if you have a credit balance.

When talking with your provider about costs:

• Ask if you can wait to pay fees until you have received the EOB that outlines final costs, or ask if you can pay a portion of the charges until you have received an EOB.
• If the deductible amount is more than you can afford to pay at that time, ask your provider about a payment plan. If the visit is for preventive services, you may only be required to pay the copay amount.
• Paying with an HSA means you are required to reconcile the account funds to avoid unnecessary taxes and penalties. The best way to avoid unnecessary taxes or penalties when using HSA funds is to first pay for medical expenses with personal funds or a credit card. Then reimburse yourself out of your HSA account for the actual medical costs shown on your EOB after a claim has been filed.

When paying for prescriptions:

1. If you have prescription drug coverage, you must pay the full cost of prescription drugs at the pharmacy.
2. If you’re using a network pharmacy, you’ll pay the lesser of our “preferred price” or the pharmacy’s usual price for the drug.
3. The network pharmacy will file a claim for you, and we will reimburse you for any covered expenses.

If you do not have prescription drug coverage, you can still use your HSA account to pay at the pharmacy; however, the amount will not be applied to your health plan deductible.