Health Savings Accounts Health savings accounts (HSAs) are a great way to save money and budget for qualified medical expenses. HSAs are tax- advantaged savings accounts that accompany high deductible health plans (HDHPs). HDHPs offer lower monthly premiums in exchange for a higher deductible (the amount you pay before insurance kicks in). You are only eligible to enroll and contribute to an HSA account if you enroll in the Empire Total Blue HSA Plan. What Are the Benefits of an HSA? There are many benefits of using an HSA, including the following: • It saves you money. HDHPs have lower monthly premiums, meaning less money is being taken out of your paycheck. • It is portable. The money in your HSA is carried over from year to year and is yours to keep, even if you leave the company. • It is a tax-saver. HSA contributions are made with pre-tax dollars. Since your taxable income is decreased by your contributions, you’ll pay less in taxes. The maximum amount that you can contribute to an HSA in 2022 is $3,650 for individual coverage and $7,300 for family coverage. In 2023, it increases to $3,850 for individual coverage and $7,750 for family coverage. Additionally, if you are age 55 or older, you may make an additional “catch-up” contribution of $1,000. You may change your contribution amount at any time throughout the year if you don’t exceed the annual maximum. HSA Case Study Justin is a healthy 28-year-old single man who contributes $1,000 each year to his HSA. His plan’s annual deductible is $1,500 for individual coverage. Here is a look at the first two years of Justin’s HSA plan: Year 1 Year 2 HSA Balance $1,000 HSA Balance $1,850 Total Expenses: (-$150) Total Expenses: (-$300) - Prescription drugs: $150 - Office visits: $100 - Prescription drugs: $200 - Preventive care services: $0 (covered by insurance) HSA Rollover to Year 2 $850 HSA Rollover to Year 3 $1,550 Since Justin did not spend all his HSA dollars, he did Once again, since Justin did not spend all of his HSA not need to pay any additional amounts out-of-pocket dollars, he did not need to pay any additional this year. amounts out-of-pocket this year. 7