Category: Health Savings Accounts

For Accountholders: 2011 Tax Forms & Information

New This Year: Forms 1099-SA and 5498-SA Sent by January 31, 2012

We are acting on feedback from clients who tell us that waiting until May for us to send Form 5498-SA is not helpful, as many of you file your tax report by April 15 or earlier.  Expect to receive all tax-related reports on your HSA account by the end of this month. In case you’re wondering about those reports, below is a quick summary:

  • Form 1099-SA – This form records all the disbursements you’ve generated in 2011. For many of us, we associate any 1099 form in the context of taxable income.  That is NOT the case with HSAs.  Form 1099-SA simply tells the IRS what amounts were spent from your HSA account and whether any of those dollars were used for “nonqualified” expenses. Sterling will also send the IRS an electronic version of Form 1099-SA. Please note that we will report to the IRS that distributions were for qualified medical expenses except in those instances in which we had knowledge of an unqualified distribution or if you closed your account. If your records indicate to the contrary, please let us know, so that we may correct our files. If you spent zero dollars out of your HSA account in 2011, then you will NOT receive Form 1099-SA. Please know that account fees are not reported as distributions from your account. We are not tax advisors, but we understand that these fees may also be deductible as “Other Miscellaneous Deductions”. Please consult your tax preparer.
  • Form 5498-SA – This form records all contributions made to your HSA account in 2011, regardless of who makes them. If you did not make any contributions, then you will not receive this form. Note that you are allowed to make contributions for the 2011 tax year up to April 15, 2012. If you decide to do so, then we will reissue your form 5498-SA by no later than May 31, 2012. Please remember that unless you tell us differently, any contributions received in 2012 will be posted to your account as 2012 contributions. If you intend the contributions for 2011, then you need to note that online (the pull down category allows for “prior year” contributions) or write it on the check.

While Sterling sends you forms that can help you prepare your tax return, these forms are not to be sent to the IRS. Instead, you need to send Form 8889 along with your tax return. This form can be obtained from the IRS website here: http://www.irs.gov/pub/irs-pdf/f8889.pdf. While we can’t complete this form for you, your statement is a key source of information and should help you. Again, if you plan to add more deposits to your HSA account for tax year 2011, then you will need to add those amounts to what is included on the attached statement when you file your taxes. By the way, we’ve heard from many clients that filing your tax returns without Form 8889 could cause the IRS to give you special attention, so please include this form in your tax filing.

2011 Contributions – In case you’re planning to maximize your tax-deductible contribution for 2011, please remember that you and your employer may contribute in total up to $3,050, if you are under 55 years of age and have single HSA compatible health coverage, and up to $6,150 if you are under 55 years of age and have family HSA compatible health coverage. If you are 55 years old and over and not receiving Medicare benefits, then you may also contribute an additional “catch-up” contribution of  $1,000. Your spouse is also entitled to a catch-up contribution if he/she meets the eligibility requirements noted above. For your spouse to make the catch-up contribution, he/she will need to open a spousal HSA account. It’s a quick and easy process and we’d be happy to help.

Problem With Excess Contributions – Please compare your year-end statement against the contribution limits noted above. If you’ve contributed in excess of those limits, then you need to let us know immediately so we can help you correct this. If you fail to do so, then the IRS will levy an excess contribution penalty. To prevent that from happening, please call us at 800.617.4729. Customer service representatives are available Monday – Friday from 8 am to 6 pm Pacific time.

Tax Issues for Residents of California, Alabama and New Jersey – While HSA contributions enjoy federal tax advantages, remember that if you live in California, Alabama or New Jersey, your contributions are not tax-advantaged for state income tax purposes. That means for residents in these three states, contributions are not tax-deductible, employer contributions are considered taxable income, and any interest earned is considered income for state tax purposes.

2012 Contributions – In 2012, the maximum amount that can be contributed to your HSA is $3,100 for accountholders under age 55 with single coverage and $6,250 for accountholders under age 55 with family coverage. “Catch-up” contributions of $1,000 for accountholders who are 55 years or over are allowed. Spouses age 55 and over may also contribute $1,000 towards a “catch up” account, but they must have a spousal HSA account.

Sterling does not offer tax advice, but if you have questions about this information, please call or email at 800-617-4729 or customer.service@sterlinghsa.com. Customer service representatives are available Monday – Friday from 8 am to 6 pm Pacific time.

2011 Tax Forms & Information

No Comments by Sterling HSA on January 23, 2012
filed in Education, Health Savings Accounts, Our Accountholders
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Sterling Updates: Important Changes for 2012

We’re pleased to announce new services at Sterling Health Services Administration, as well as share reminders about important industry changes in 2012.

New Sterling Services:

  • Login Once for Access to HSA, HRA and FSA Accounts – We’ve made it easier for you to access account information online. If you have multiple accounts with Sterling, such as an HSA and HRA, or HSA and FSA, just one login at www.sterlinghsa.com now provides access to account information and transaction tools for HSAs, HRAs and FSAs. You may remember that each product required a separate login until now. At this time, COBRA account access still requires a separate login to our WebCOBRA portal. Product web guides with more details can be downloaded by clicking the buttons below.
  • Fast Account Balances Via Phone – You can get your HSA,HRA and FSA account balances anytime just by calling 800-617-4729, pressing 1 at the prompt, and entering your Sterling account number. The response to this new service has been very positive, making it easy for you to access information on funds available anytime from anywhere.

Industry Updates:

  • HSA contribution limits for 2012 increased to $3,100 for individuals and $6,250 for families, regardless of the health plan deductible. Accountholders over 55 can make a $1,000 annual catch up contribution as well.
  • For Transit and Parking FSAs, the 2012 benefit amounts are $240 per month for parking (a $10 monthly increase) and $125 per month for transit (down from $230).

If you are a Sterling Accountholder or Subscriber, download your web portal guides below:

FSA Employee Guide
HRA Employee Guide
HSA Employee Guide

If you are a Sterling Employer Client, download your web portal guides below:

FSA Employer Guide
HRA Employer Guide
HSA Employer Guide

Questions? Contact Sterling customer service by calling 800-617-4729 or emailing customer.service@sterlinghsa.com. Now through February 2012, we have extended customer service hours and are available to help you from 6 am to 8 pm PT.

No Comments by Sterling HSA on December 9, 2011
filed in Flexible Benefit Plans, Flexible Spending Accounts, For Employers, Health Reimbursement Accounts, Health Savings Accounts, Healthcare Flexible Spending Accounts, News, Our Accountholders, Transit & Parking Benefits
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New Surveys Reveal Consumers Taking Charge of their Healthcare Costs with Health Savings Accounts

Employers and consumers alike are adopting Health Savings Accounts (HSAs) as a viable way to manage their health care costs without compromising care, according to two recent national surveys.

The “2011 Employer and Account Holder Surveys,” commissioned by ACS and conducted by Buck Consultants, show a  majority of small employers (77 percent) believe that High Deductible Health Plans (HDHP) with an HSA are key in controlling health care costs.

Additionally, more than half (56 percent) of account holders have found that their HSA-qualified plan provides an affordable health care option.

The surveys show that HSAs put consumers in the driver’s seat when it comes to managing their health services and care. Three-quarters of respondents say the ability personally to control their own health costs is an “extremely” or “very” important benefit of HSAs.

Not only are account holders setting aside more money than before they had an HSA to cover potential medical costs (54 percent), but they are also engaging in healthier lifestyle choices (18 percent), researching preventive care programs (18 percent), shopping for lower priced prescription drugs (28 percent), and planning health care better throughout the year (31 percent). Individuals perceive that they consume medical services at approximately the same rate but are shopping for care more than before.

Employers and employees are benefiting from more educated, responsible health and wellness decisions, but the benefits don’t end there. HDHPs are less costly to employers for both individual and family coverage. Employers report that the cost of providing HSA-qualified plans is less than the cost of providing a standard Preferred Provider Organization (PPO). The average direct cost to provide an HDHP/HSA is $5,469 for individual coverage and $9,909 for family coverage. In comparison, the average PPO cost is $7,158 for individuals and $10,691 for family.

Other significant findings include:

2011 Employer Survey

  • The average employer that implemented an HDHP and HSA program has 49 percent of eligible employees enrolled in the HDHP.
  • Sixty-nine percent of employer respondents contributed to their employees’ HSA accounts.
  • Employers’ contributions to HSAs average $1,000 for individual coverage and $1,500 for family coverage.

2011 Account Holder Survey

  • Seventy-two percent of account holders indicated that they actively chose the HSA-qualified plan although other plan options exist for them.
  • Eighty-two percent of account holders surveyed reported that the ability to save tax-free money was “extremely” or “very” important in selecting an HSA-qualified plan.
  • Seventy-nine percent of respondents state that having an HSA is valuable to them.
  • Sixty-four percent of respondents state that their HDHP/HSA combination meets their family’s needs.

These surveys, commissioned in the fall of this year by ACS and conducted by Buck Consultants, both of which are Xerox companies, generated more than 14,000 existing account holder and 300 employer responses. The surveys are the largest ever conducted on the subject of HDHPs and HSAs.

For more information on Health Savings Accounts, visit our website or contact a Sterling sales representative today.

No Comments by Sterling HSA on November 18, 2011
filed in Consumer Directed Health Plans, Health Savings Accounts, News
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What You Need to Know About Open Enrollment

Along with the return of school buses and shorter days, Fall is open enrollment time – the period in which you can sign up for, or adjust, your participation in your employee benefits package.

A recent study conducted by Harris Interactive and released as part of the Aflac WorkForces Report found that most workers regret their health benefit choices. The study reports that 77 percent of workers say they’ve made mistakes in their benefit decisions in the past, with 42 percent saying they waste money every year.

The most common mistakes include:

  • choosing the wrong deductible
  • not taking advantage of flexible spending accounts (FSAs)
  • passing on coverage — such as vision and dental care

What can you do to make the most of your benefits package?

  1. Visit the Consumer Reports Health website for information on how to choose a plan as well as what changes you should expect due to healthcare reform.
  2. If your employer offers an Flexible Spending Account, sign up for it. See below for more on FSAs.
  3. Make sure you put enough money in your FSA. According to the Aflac report, 43 percent of respondents said they didn’t contribute enough to the account.
  4. Visit the Sterling Resources page for links to companies we’ve partnered with in order to help you negotiate healthcare bills, find the best doctors and medical service providers, comparison shop for prescriptions, and more.
  5. Of course, the best resource during open enrollment is always your Human Resources department. They will have all the information that is specific to your particular benefit offerings.

About Flexible Spending Accounts (FSAs)

FSAs enable you to set aside pre-tax dollars to pay for qualified medical, dependent care, and commuter transportation expenses. Depending upon your tax-bracket, an FSA can save you up to 40% on items you already pay for out-of-pocket – such as co-pays for doctor visits, daycare tuition fees, and even gasoline for your “commuter highway vehicle” (better known as your car)!

Don’t forget that even if you’ve participated in an FSA in the past, you still have to re-enroll in these benefits each year, during open enrollment.

Sterling is led by experts in the health benefits and banking industries for one primary purpose – to put our customers in control of healthcare spending. Please contact us with any questions on Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), Premium Only Plans (POPs), or COBRA.

http://www.sterlinghsa.com/resources/
No Comments by Sterling HSA on September 29, 2011
filed in Consumer Directed Health Plans, Dependent Care Flexible Spending Accounts, Education, Flexible Benefit Plans, Flexible Spending Accounts, Health Savings Accounts, Healthcare Flexible Spending Accounts, Our Accountholders, Partners and Resources, Transit & Parking Benefits
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