Introducing AAFD Health Benefits, featuring our branded Health Savings Accounts (HSA's) and HSA qualified individual and group health insurance. These are not ‘discounted’ or ‘stripped down’ health care programs, but a whole new way to attack health care and health care costs. We are excited at the prospect of educating our members about an amazing new approach to taking control of your health care, dramatically reducing health insurance costs, and helping to build your retirement fund with your health insurance savings!

With AAFD Health Benefits, the AAFD is able to help our members:

1. Dramatically reduce health insurance premium costs by combining high deductible HSA qualified health insurance with tax deductible Health Savings Accounts.
2. Use pre-tax-dollars to set aside funds to pay your medical expenses up to your insurance deductible.
3. Enjoy consumer driven health care – you decide what health care options are right for you, choose your own doctors, and now use the money you set aside for health care to cover doctors, dentists, chiropractors, and eye care specialists—even over the counter health care remedies that were not covered under your existing health insurance benefits.
4. Place money that used to go to premiums into a tax advantaged savings account where you decide what to spend on health care, instead of paying your insurance company to pay for doctor visits and drug benefits you may or may not use.
5. Protect and insure against high cost care with insurance, but allows members to ‘self-insure’ routine costs—and if you enjoy good health, your health care savings can grow into an additional retirement fund.

Introduction to Health Savings Accounts (HSAs)
A Health Savings Account (HSA) is like a 401(k) for healthcare. It is a tax- advantaged personal savings or investment account that individuals can use to save and pay for qualified health expenses, now or in the future. Paired with a qualified high deductible health plan (HDHP), an HSA is a powerful financial tool that empowers consumers to be more actively involved in their health care decisions.

However, unlike other financial savings vehicles (Roth IRA, Traditional IRA, 401K, etc.), an HSA has the unique potential to offer triple tax savings through:

• Pre-tax or tax-deductible contributions to the HSA
• Tax-free interest or investment earnings
• Tax-free distributions, when used for qualified medical expenses

The employer, the employee/individual, or both can make contributions. Tax-free withdrawals can be made to pay for qualified medical expenses incurred by the accountholder, spouse, children and other dependents.

HSAs are also portable, which means that individuals keep their HSAs, if changing jobs or becoming unemployed. Also, since the account is owned by the individual, there is no “use-it-or-lose-it” provision, like with a Flexible Spending Account (FSA). Instead, unused contributions roll over each year, with interest and/or investment earnings compounding on a tax-free basis, like an IRA or 401(k).

HSAs offer the potential for long-term, tax-free savings that can be used for future medical expenses, such as Medicare premiums and certain long-term care expenses and insurance.

Any adult who is not already enrolled in Medicare and is covered by an HDHP (and has no other first dollar coverage except for preventive care) may establish an HSA. There are no income limitations.

Universal HSA Principles for Consumers

1. You must be enrolled in an HSA-qualified high deductible health plan (HDHP) to open or contribute to a Health Savings Account (HSA) in your own name.
2. Switching to an HDHP from a traditional low deductible health plan will substantially lower your health plan premium. The money you save in premiums can be deposited into your HSA.
3. The money in your HSA is entirely your own. Even if your employer makes contributions to your HSA, your employer cannot restrict what you can spend it on. Since it is your money, it also stays with you when you change jobs.
4. You are in charge of your HSA funds, making you and your doctor the decision makers, not some third-party. Spending your own money also means that you will likely inquire more about the cost of your health care expenditures, helping to introduce marketplace competition into the world of health care.
5. There is no time limit as to when you can reimburse yourself for your health care expenses; you just need to keep legible receipts and records in case you do reimburse yourself or if you are audited.
6. You decide whether and how much to spend from the account for your medical expenses, whether to spend out-of-pocket or to save the HSA money for the future. Just like a 401(k), earnings that compound tax-free for several years have the potential to grow exponentially into a supplemental retirement nest egg. After age 65 (or if you’re disabled), funds can be withdrawn for non-qualified expenses without being subject to the 10% penalty, but ordinary income taxes still apply.
7. Anyone can contribute to another person ’s HSA. The tax benefit from such a contribution is gained by the person receiving the contribution, not the person giving the contribution.
8. You decide which company will hold your HSA money (your trustee or custodian), and what type of investments you make with your account. Any investment allowed for IRAs is allowed for HSAs. IRS Publication 502 provides a list of most allowable HSA expenditures.