Health Savings Accounts

2008 Annual Combined Maximums are:

Since the IRS maximums are total amounts, you will need to factor in the County contribution when determining your allowable maximum contribution. The management of the HSA and additional related funding is the responsibility of the employee.

The funds on deposit belong to you, not the County. Therefore, these funds roll over from year to year and continue to be available after employment ends. These monies remain tax-free if used for qualified medical expenses (including dental, vision, over the counter drugs, etc.).

IRS Publication 969 – Tax Year 2007

IRS Publication 502 - Tax Year 2007

These funds are invested and earnings are also tax free. If funds are withdrawn for non-medical expenses, those monies are subject to a 10 percent penalty as well as income tax.

In order to be eligible for an HSA, the employee must:

• be enrolled in a qualified high deductible health plan.

• have no other medical coverage (certain exceptions apply).

• not be enrolled in Medicare.

• not be claimed as a dependent on someone else's tax return.

• not be enrolled in a Flexible Spending Account - except a "Limited Purpose" FSA. (A Limited Purpose FSA may only be used for dental or vision expenses, not covered by the health plan.

HSA/FSA comparison

Since HSAs are the property of the employee (the taxpayer) it is your responsibility to manage funding amounts. There are several options available for funding your HSA, (lump sum payment, bi-weekly payroll deduction, transfers from IRA, etc.) Pima County will deposit amounts based on your enrollment level and your payroll deduction authorization. You will need to manage all other details. In order to prevent tax consequences, it will be your responsibility to ensure that payment requests are for qualified medical expenses. Typically, HSA administrators (JP Morgan/Chase) don't scrutinize claims to ensure compliance. It is the taxpayer's responsibility. If you wish to enroll in the HSA, you will need to complete the JPMorgan/Chase HSA Enrollment and the HSA Payroll Deduction Authorization Form in addition to the Insurance Enrollment Form.

Note: If you are an employee of Pima Association of Governments, Superintendent of Schools, Metro Water, Marana Water District or Southwest Fair Commission, you must contact your HR department for HSA instructions.

JPMorgan/Chase HSA Member Services - 1-866-524-2483

Chase HSA Online Service – www.chase.com/hsa

Department of Treasury HSA FAQs

Chase HSA FAQs

Chase HSA Qualified Medical Expenses

JPMorgan/Chase HSA Enrollment

HSA Payroll Deduction Authorization Form