Health Savings Accounts (HSAs) - Citgo · QMEs, which include: Deductible, coinsurance, and ......

Health Savings Accounts (HSAs)

Workplace Education Series

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The CITGO Self Directed Health Plan optionBenefits of a Health Savings Account (HSA)Getting started Additional resources

Today’s Agenda


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Health Care Choices

The CITGO Self Directed Health Plan

Fidelity HSA


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What is the CITGO Self Directed Health Plan?

Health plan that meets certain federal requirements for deductibles and out-of-pocket expenses

Generally offers a lower premium than other medical plan options One requirement for establishing an HSA


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What is an HSA?

Tax-advantaged account that can be used to pay for current and future qualified medical expenses

Can be established once enrolled in the CITGO Self Directed Health Plan


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Fidelity HSA® Advantages

“Triple” Federal tax advantages:Contributions can be made pre- or post-taxPotential tax-free growth Tax-free withdrawals for qualified medical expenses

FlexibilityYou choose how and when you use your HSA funds Use for current expenses, or invest for the future

Carry Over BalancesNot subject to the “use it or lose it” rule

Unlimited Time for Reimbursement Withdrawals Portability

The account is yours


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Maximum Portability

If you retire, leave your employer, or change your medical coverage in the future, you can:Keep your Fidelity HSAUse your Fidelity HSA for future

qualified medical expenses for yourself, your spouse, or your dependents


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Rules to Establish and Contribute to an HSA

You must be enrolled in an HSA-Eligible Health Plan You are not eligible if covered by any of the following:

Healthcare Flexible Spending Account Spouse’s non-HSA-Eligible Health Plan Spouse’s health care FSA (flexible spending account)

You may not be enrolled in Medicare You may not be claimed as a dependent on another’s

federal tax return BUT: you MAY participate in the Limited Purpose FSA


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How to Contribute

Through a few different ways: Personal contributions

Payroll deductionPersonal check

Third-party contributions


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HSA Contribution Limits

2012 Limits

$6,250$3,100Annual HSA Contribution Limits

$1,000$1,000Catch-up Contribution (age 55 and older)

FamilyIndividual


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You can use HSA funds to pay for QMEs, which include:Deductible, coinsurance, and

copayments IRS-approved medical expenses

not covered by your health planMedicare premiums, including Part

A, Part B, and Part D Long-term care insurance

premiums, subject to certain limits Age 65: no more penalties for non-

QME withdrawals

Rules for Taking Money Out of an HSA—Qualified Medical Expenses (QMEs)


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Taking a Distribution From Your HSA

There are multiple options available for accessing your HSA funds: HSA debit card Distribution check or electronic funds transfer (EFT) HSA checkbook Fidelity BillPay®—

Distributions used to pay for expenses other than qualified medical expenses are considered taxable income and will be subject to an additional 20% penalty. The 20% penalty will not apply to distributions made after your death, you become disabled, or once you reach age 65.


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CITGO Self Directed Health Plan — Fidelity HSA

ExampleYear 1—Family Coverage

Health Care Services Used

Doctor visits, non-preventive $ 200

Prescriptions $ 300

Total Out-of-Pocket $500

Fidelity HSA Activity

Employee contributes $2,000

Total in Fidelity HSA = $2,000

Amount withdrawn $500

Carry Over Amount = $1,500

For illustrative purposes only; this example may not be representative of your CITGO Self Directed Health Plan. You may also wish to use the HSA modeling tool located at www.hr.citgo.com to enter your own expected utilization and model out your specific plan design.


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ExampleYear 2—Family Coverage

Health Care Services Used

Doctor visits, non-preventive $ 500

Emergency room visit $ 700

Lab work $ 350

Prescriptions $ 450

Total Out-of-Pocket $2,000

Fidelity HSA Activity

Total in Fidelity HSA $1,500

Employee contributes $3,000

Total in Fidelity HSA = $4,500

Amount withdrawn $2,000

Carry Over Amount = $2,500

For illustrative purposes only; this example may not be representative of your CITGO Self Directed Health Plan. You may also wish to use the HSA modeling tool located at www.hr.citgo.com to enter your own expected utilization and model out your specific plan design.

CITGO Self Directed Health Plan — Fidelity HSA


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Account Growth

A Fidelity HSA offers an opportunity for growth* based on:

How much you contribute to your account

Your health care expenses and whether you choose to withdraw funds from your Fidelity HSA

How you invest your Fidelity HSA funds

• Because these accounts may be invested in securities, the funds may be subject to market risk. The minimum investment for mutual funds is $2,500 and subsequent investments must be at least $250. This may vary depending on the fund selected.


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Investment Options for the Fidelity HSA

A Fidelity HSA is an individual brokerage account

Contributions are automatically invested in a core position

Once you reach the minimum balance, you can invest in: The full range of Fidelity mutual funds Over 4,000 additional mutual funds Individual stocks, bonds, treasuries,

and CDs Exchange-traded funds (ETFs) A “single fund” option

Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges, and expenses. For this and other information, call or write Fidelity for a free prospectus or, if available, a summary prospectus. Read it carefully before you invest.


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Fidelity HSA Hypothetical Growth Example

$39,093

$82,696

$126,471

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

1 5 10 15 20

Year

HS

A A

ccou

nt B

alan

ce

HSA Annual Contribution $1,000 HSA Annual Contribution $2,000 HSA Annual Contribution $3,000

This hypothetical example is illustrative and doesn't represent the performance of any security in a Fidelity HSA. Assumes the investor receives 2% investment growth on funds in the default investment option and that once the balance in this account reaches $2,500, excess funds will earn 7%. Actual net returns will be based on the investor’s investment choices within the Fidelity HSA. This example does not account for the effect of interest, dividends and taxes. Investing in this manner does not ensure a profit or guarantee against loss in declining markets.

The CITGO Self Directed Health Plan- Family Coverage


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Getting Started

It’s easy to enroll: Choose the CITGO Self Directed

Health Plan as your medical plan Go to NetBenefits at

www.401k.com to open your Fidelity HSA

For illustrative purposes only


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Online Resources

Frequently Asked Questions and Fidelity HSA guide on NetBenefitsat www.401k.com

HSA Modeling toolwww.hr.citgo.com

IRS Publication 502 (Medical and Dental Expenses):www.irs.gov/publications/p502

IRS Publication 969 (HSAs and Other Tax-Favored Health Plans):www.irs.gov/publications/p969

U.S Department of the Treasury, information about Health Savings Accountshttp://www.ustreas.gov/offices/public-affairs/hsa/


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Important Information

Before investing in any fund, please carefully consider the investment objectives, risks, charges, and expenses. For this and other information, call or write Fidelity for a free prospectus or, if available, a summary prospectus. Read it carefully before you invest.

Information on the tax status of contributions described in this presentation applies to federal taxation, but may or may not apply to state taxation. See your tax advisor for more information on the state tax implications on HSAs.

There are many factors that go into the determination of a maximum contribution amount to your HSA each year. One example to consider is if your opposite-sex spouse has family HSA-Eligible Health Plan coverage, you may need to take that deductible into account when determining your maximum annual contribution amount.

The materials presented during this [Name of HSA-Eligible Health Plan] and Health Savings Accounts Workshop contain general information regarding the terms of the [Name of HSA-Eligible Health Plan], which are sponsored by your employer and its affiliated Companies (the “Company”). The benefits described in this workshop are available only to benefits-eligible employees. The language used in this workshop is not intended to create, nor is it to be construed to create, a contract between your employer and any one of its employees and former employees. In the even the content of this workshop and any oral or written representations made by any person regarding the [Name of HSA-Eligible Health Plan], or any other plans sponsored by the Company, conflicts or is inconsistent with the provisions of the applicable plan document(s), the provisions of the applicable plan document(s) are controlling and will govern. Your employer reserves the right to change, suspend, withdraw, amend, modify or terminate the plan(s), in whole or in part, at any time.

The information provided in this workshop is general in nature. It is not intended, nor should it be construed as legal or tax advice. In addition, the information is not intended or written to be used, and cannot be used, for the purpose of (a) avoiding penalties under the Internal Revenue Code; or (b) promoting, marketing or recommending to another party any transactions or matter addressed herein. The establishment and ongoing administration of a Fidelity HSA is a taxpayer responsibility. As a result, you are encouraged to consult your tax advisor before establishing a Fidelity HSA. You are encouraged to become familiar with the information available from the U.S. Department of the Treasury, which can be found on the Treasury web site at www.treas.gov/offices/public-arrairs/hsa. You also are encouraged to review information available from the IRS web site at www.irs.gov. You can find IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, and IRS Publication 502 Medical and Dental Expenses (including the Health Coverage Tax Credit), online, or you can call the IRS to request a copy of each at 1-800-829-3676.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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Health Savings Accounts (HSAs) - Citgo · QMEs, which include: Deductible, coinsurance, and ......

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