Things You Should Know When Using Your …

1 Things You Should KnowWhen Using your fidelity HSA About HSAsAHealthSavingsAccount(HSA) is a tax-advantaged account that can be used to pay for current and futurequalified medical expenses for you, your spouse, and your dependents. It was created under theMedicarePrescriptionDrug,Improvementa ndModernizationActof2003. With an HSA, you can make contributionsand take distributions from your account on a federally tax-free basis. And, because contributions may beinvested, they have the potential to grow over time also federally tax-free. (Most states also allow tax-freecontributions, distributions and earnings, but please consult a tax advisor for specifics.) You can use funds inyour account to pay for or to reimburse yourself for qualified medical expenses for you, your spouse, andyour eligible HDHPsA High-Deductible Health Plan (HDHP) is a specific type of health plan with a higher deductible thantraditional health plans and with lower premiums.

2 In order to open and contribute to an HSA, you must beenrolled in the HDHP and meet other eligibility requirements, including: You cannot be covered by any other health plan that is not an HDHP You may not currently be enrolled in Medicare You cannot be claimed as a dependent on another person s tax returnWith an HDHP, most eligible medical expenses, even prescription drugs, are subject to the annualdeductible. You are responsible to pay expenses up to the HDHP s annual deductible. For many HDHPs,preventive care is not subject to the deductible, but may require small co-pay amounts. Once you vereached the deductible, your HDHP will cover all or a percentage of your eligible expenses (as defined bythe plan). For more information on the provisions of your HDHP, refer to your HDHP enrollment an HSA WorksYou can use your HSA funds to pay for current and future out-of-pocket qualified medical expenses, includingexpenses related to meeting your health plan s annual deductible.

3 Because the contributions and distributionsused to pay for these expenses are federally tax-free, you have use of the money you would have otherwisepaid out in taxes. your contributions to an HSA may be invested and therefore have the potential to growfederally tax-free. And, unlike flexible spending accounts (FSAs), HSAs are not subject to any use it or loseit rules; any unused funds remain in your account from year to year. This flexibility allows you the opportunitytosaveforfuturehealth care expenses even in retirement in your HSA. So you can choose to pay forcurrent health care expenses with money outside of your HSA, and save your HSA funds for health careexpenses in retirement when your medical costs may be higher than they are today. Finally, your FidelityHSA is yours and is completely portable; meaning that if you change health plans, leave your employer, orretire, the account and fund remains yours to to your fidelity HSAYou, your employer, and other third-parties may contributeto your HSA.

4 Together, contributions to your account maynot exceed your maximum annual contribution. Yourmaximum contribution limit depends on whether you haveindividual or family HDHP coverage, whether you re age 55or older and whether you re enrolled in an HDHP for a fullyear. The statutory maximum annual contribution amountsare set by the Treasury Department and indexedannually. If you are 55 years of age or older, you are alsoeligible to make additional catch-up contributions toyour HSA. In addition, if you enroll in an HDHP mid-year,you may still contribute to the statutory maximum, providedyou are enrolled in the HDHP as of the last month of thetaxable year and remain enrolled for the 12 months follow-ing. If you enroll in an HDHP at the beginning of the year,but terminate your coverage under the HDHP sometimeduring that year, your maximum annual contribution limitis pro-rated.

5 See the Treasury Web site for moreinformation on contribution and catch-up that your contribution total is tallied fromcontributions from all sources including payroll deferrals,direct deposits by you, employer contributions and anyother third party contributions. To ensure that you don texceed your contribution limit, you Should :1. Calculate your maximum annual contribution Determine if and how much your employer willcontribute to your Determine if you will have any other contributions toyour Decide on your monthly pre-tax contributions based onthe other that your maximum annual contribution limitapplies to each calendar year, and contributions may bemade up to April 15 of the following year. Contributions toyour fidelity HSA can also be made with after-tax moneyvia check or ContributionsExcess contributions include contributions from any source employee, employer and other third party that are inexcess of your maximum annual contribution limit.

6 Fidelityprevents contributions above the statutory maximum forfamily HDHP coverage, but it s incumbent on you to ensurethat contributions do not exceed your annual contributionlimit. For instance, if you become ineligible for eitherindividual or family HDHP coverage during the year, yourannual limit is pro-rated. If you have front-loaded yourannual contributions, you may be in danger of havingcontributions exceed your you do contribute more to your account than yourcontribution limit, then you, as the account holder, areresponsible for withdrawing the excess contributions andany earnings on those contributions. You have two optionson how to do this:1. Go to and click Customer Service, Finda Form. In the alphabetical list, go to HSA forms, anddownload the HSA Return of Excess Call fidelity and indicate that you need to withdrawfunds from your fidelity HSA due to an excess contribu-tion, and a fidelity representative will advise you on thecorrect form and you do not withdraw the excess contributions (and anyearnings on those contributions) from your account, theamount in excess will be included in your gross incomeand subject to a 6% excise tax.

7 You will need to withdrawthese funds by your tax filing deadline for that tax year. Itis important to consult with a tax advisor in handlingexcess DistributionsOnce you establish an HSA and begin making contributions,you can start Using your account. You may use your HSA topay for out-of-pocket qualified medical expenses, includ-ing expenses you incur before reaching the HDHP s annualdeductible. Defined under the Internal Revenue ServiceCode (IRC), qualified medical expenses (QMEs) generallyinclude costs for most medical care and services, dentaland vision care, prescription drugs, and some over-the-counter drugs, that are not paid by your health insurance premiums are generally not consideredqualified medical expenses; but premiums paid for COBRA continuation coverage, qualified long-term care insurance(subject to limitations), and Medicare premiums do you use your HSA funds to pay for qualified medicalexpenses, distributions from your account are federally tax-free (and also tax-free in most states).

8 You do not need tosubmit receipts or claim forms to take distributions from youraccount, but you are responsible for determining that theexpenses are qualified medical expenses and for complyingwith all IRS tax reporting requirements. As such, it isimportant that you keep records to show your distributionswere exclusively to pay for or reimburse qualified medicalexpenses. You do not need to send these records withyour tax return, but can keep them with your tax are four primary methods for taking distributionsfrom your HSA:1. Debit card You and your dependents may utilize adebit card to pay for qualified medical expenses directlyfrom your Checkbook You can request a checkbook to payqualified medical expenses directly, or to reimburseyourself for qualified medical expenses you paid froma taxable Electronic Funds Transfer (EFT)

9 You can establish adirect connection between your fidelity HSA and yourbank account to reimburse yourself for qualified medicalexpenses you paid from a taxable Request distribution check You may call fidelity directlyto request a distribution check be mailed to you can find more information about all of the abovemethods of distribution at Click CustomerService, Find a Form, and then go to H in the alphabeti-cal list to find all HSA request method of distribution you use, with a fewimportant exceptions, you may not want to pay your healthcare expenses at the time of service. All claims Should besubmitted to your HDHP for payment. After your claim isprocessed you will receive an Explanation of Benefits fromthe HDHP indicating the amount, if any, you owe thehealth care provider.

10 However, paying at point of servicemight make sense for the following exceptions: Pharmacy prescriptions Preventive care visits if a copayment is required Healthcare services that will not go through the claimsubmission processPlease note: Distributions you take that are not used topay for or reimburse qualified medical expenses will beincluded in your taxable gross income and will be subjectto an additional 10% tax DistributionsIf you take a distribution from your fidelity HSA for anexpense that is not a qualified medical expense, you may repay your account. (This includes distributions intendedfor a qualified medical expense and later returned to youas overpayment by a health care provider.) You have threeoptions for handling mistaken distributions:1. Pay for other qualified medical expenses.