Optima Equity Common Questions

What is an Health Savings Account (HSA)?
It’s a savings and spending account that offers members a way to pay for qualified medical expenses with pre-tax dollars, as well as a tax-free way to save for future medical and retirement healthcare expenses. To open an HSA, you must be enrolled in a qualified High-Deductible Health Plan (HDHP).

What is a High-Deductible Health Plan?
An HDHP can be thought of as a “low cost” plan. With an HDHP, the member is responsible for satisfying a deductible and paying for initial healthcare expenses. The health savings account may be used to cover those expenses. The Optima HSA qualified plans are called “Optima Equity.”

Who is eligible to open an HSA?
Anyone who is covered by a qualified HDHP, is not covered by other health insurance, not enrolled in Medicare and cannot be claimed as a dependent on someone else’s tax return.

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Who can contribute to an HSA?
HSAs can be funded with pre-tax dollars by the member, their employer, or a third party.

How much can be contributed each year?
For 2008, up to $2,900 for individuals and $5,800 for each family, including all contributions. Those age 55 or older may also make an additional “catch-up” contribution of $900. These rates are subject to change every year, adjusted for inflation.

Who owns the HSA?
The member owns the account regardless of who contributes. The funds remain in the account and earn interest and returns over time, just like an Individual Retirement Account (IRA).

What can an HSA be used to pay for?
An HSA can be used to pay for any qualified medical expenses as defined in Section 213(d) of the Internal Revenue Service Code. Qualified medical expenses include, but are not limited to: copays, deductibles, and coinsurance; and vision and dental care. For a list of qualified medical expenses, refer to IRS Publication 502 at www.irs.gov.

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What are the benefits of using Optima Equity, the integrated HSA that Optima is offering with HealthEquity®?
An integrated HSA offers a number of benefits for members. These include:

By enrolling in the Optima Equity plan, an HSA will be set up during the enrollment process.
Customer service at HealthEquity® is available 24/7 to assist with you questions about your HSA.
There’s only one sign on for Optima Health and HealthEquity® websites.
HealthEquity® also offers enhanced member payment capabilities via PayChoice. PayChoice enables members to manage their account information, see account balances, request reimbursements, make payments from the account directly to providers, schedule one or more payments in advance, set up electronic funds transfers and more – all in one place.

Although you can work with any bank or other provider of HSAs, we believe that our integrated solution with HealthEquity offers our members significant benefits.

How does an HSA work?
The member can use the account to make payments for qualified medical expenses.

HealthEquity® account holders can make payments by debit card, online using electronic funds transfer (EFT), or by phone. Paper reimbursement checks are also available for $2. All records are maintained for future tax purposes.

What happens to HSA funds if the owner changes jobs or retires?
The account still belongs to the owner. You can keep your HSA even if you change jobs, change your medical coverage, become unemployed, move to another state, or change your marital status.

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Can an HSA ever be used to pay for non-qualified expenses?
Once the member reaches age 65 the funds can be used for non-qualified expenses, but withdrawals will be subject to tax. If the funds are used before age 65 for non-qualified expenses, the amount used will be taxed and incur a 10 percent penalty.

Can a retiree contribute to an HSA?
Yes, if they are covered by a qualified high-deductible health plan and not enrolled in Medicare, another health insurance plan, or a claimed as a dependent on someone else’s tax return.

Do members lose HSA funds at the end of the year?
No. Remaining funds roll over into the following year and grow tax-free.

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Can HSA funds be withdrawn any time?
Yes, as long as they’re used to pay for qualified medical expenses the money is not taxed. If money is withdrawn before age 65 for other expenses, the regular tax rate would apply as well as a 10 percent penalty. After age 65, there are taxes when used for non-qualified expenses, but no penalty applies.

Does an HSA earn interest?
Yes. Best of all, the interest accumulates without applied taxes.

Can HSA funds be invested?
Yes. With the HealthEquity HSA, once a $2,000 account balance is achieved, the first dollar above this amount can be invested. Think of an HSA as a medical 401(k), only better. You contribute pre-tax dollars. Then you earn interest or get investment returns – your choice. Unlike a 401(k), your money is never taxed if you use it for qualified medical expenses regardless of your age.

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Which individuals benefit most from HSAs?
HSAs and qualified high-deductible health plans can work for anyone. They offer an option to save for retirement and pay for medical expenses in the meantime. To determine if an HSA is right for you, compare your various benefit options and evaluate them based on your financial and health situation.

Do I have to pay any additional out of pocket costs for wellness or preventive benefits*?
Wellness or preventive benefits are paid by the HDHP, outside of the general deductible. A nominal copay will apply, with preventive services covered at 100 percent of the contracted provider rate.

What happens after I open an HSA with HealthEquity?

Upon opening the HSA, the account holder will receive the following items from HealthEquity:

HSA member welcome letter, which lists all of the features of the HSA, including the client services contact information.
Member Guide providing the account holder with information on how to navigate their HSA and an overview of the HealthEquity® services that will help with management of their HSA.
Visa debit card with activation stick and card carrier.
Custodial agreement for their records.
HSA fee and interest rate schedule.
PIN mailer, which contains their debit card Personal Identification Number.

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How do I access my HSA account?

Sign in and select “Manage My HSA Account” in the “My Optima” menu. If you have not already registered, you will need to register and create a username and password.

*Preventive care is defined as periodic check-ups, well baby care, annual GYN exam, lab & x-ray, mammograms, PSA testing, vision and hearing screenings for children up to the age of 18 (some required by Virginia law).

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Optima Health is the trade name of Optima Health Insurance Company. Optima Equity HSA qualified high deducible PPO is underwritten by Optima Health Insurance Company. Benefit exclusions and limitations apply. For costs and complete details about coverage ask your broker or employer. The information provided in this document is not tax or legal advice. The tax treatments vary for each situation. Please consult your tax and or legal counsel for tax implication of your unique situation.