Professional Musicians & Employer’s Health & Welfare Fund
High Deductible Plans & HSAs
The Board of Trustees of the Professional Musicians, Local 47 and Employers’ Health & Welfare Fund (the “Fund”) is committed to providing the best health insurance delivery and cost platforms available to the Fund’s participants. In furtherance of that goal, and as reviewed in this article, the Fund will offer, during the upcoming open-enrollment period, two “High Deductible Plans” (“HDPs”) that can be coordinated with a properly established and administered Health Savings Account (“HSA”).
What is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is a tax-exempt trust or custodial account you (the individual participant) set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. You must be an eligible individual, and remain an eligible individual, to qualify for an HSA.
No permission or authorization from the IRS is necessary to establish an HSA. You set up an HSA with a “trustee” — a qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be trustee of individual retirement arrangements (IRAs). The HSA can be established through a trustee that is different from your health plan provider. In this regard, please note that the Fund is not an approved trustee for HSA accounts and, therefore, cannot assist you in setting up an HSA or administering the HSA once it is operational.
Please note that the establishment of an HSA is the individual Participant’s responsibility: the Fund does not establish nor administer HSA’s for any Participant. Any Participant can set up an HSA by going to a bank or insurance company that offers HSA administrative services (and many banking institutions now offer this service).
Once the HSA is set up, it is the Participant’s duty to properly fund and administer the HSA: the Fund takes and has no role in the administration of an HSA. If you are contemplating the establishment of an HSA, you should truly consider taking an on-line tutorial or checking out the IRS website to make sure you understand how HSA’s work and if it is the right health-care financing vehicle for you/your family.
Who Qualifies for an HSA?
To be an eligible individual and qualify for an HSA, you must meet the following requirements:
- You are covered under/enrolled in a high deductible health plan (HDHP)
- You have no other health coverage except what is permitted under by the IRS
- You aren’t enrolled in Medicare
- You can’t be claimed as a dependent on someone else’s tax return
- You have an HSA established to accept contributions and to pay your deductibles/co-pays
What are the Benefits of an HSA?
- You can claim a tax deduction for contributions you directly make to your HSA (up to the allowable limits) even if you don’t itemize your deductions on Schedule A (Form 1040)
- Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income. Under certain circumstances, these contributions can be in excess of what your employer contributes on your behalf to the Fund
- The contributions remain in your account until you use them
- The interest or other earnings on the assets in the account are tax free
- Distributions may be tax free if you pay qualified medical expenses
- An HSA is “portable.” It stays with you even if you change employers or leave the work force
- However, be aware of the level of the applicable deductible as the holder of the HSA must be able to put enough dollars into the HSA to cover the deductibles
The Fund’s High Deductible Plans for 2019
Blue Shield High Deductible PPO PLAN
The Fund will be offering a new Blue Shield High Deductible PPO (“Blue Shield HD PPO”) plan to eligible participants as of the upcoming open enrollment for 2019 coverage. It is the intent of the Fund’s Trustees to give participants — who qualify at Level A1 or B1 — a more affordable PPO plan option to the present Blue Shield PPO offered by the Fund. As a result, the Blue Shield HD PPO will replace the existing Blue Shield PPO offered by the Fund effective January 1, 2019, and the existing Blue Shield PPO will be closed to further enrollment.
Also, the Fund has determined that the Blue Shield HD PPO meets the IRS qualifications for a Health Savings Account. Thus, a participant may legally coordinate an HSA with the Blue Shield HD PPO.
Kaiser High Deductible Plan
In addition to the Blue Shield HD PPO, the Fund currently offers a Kaiser High Deductible Plan (“Kaiser HDP”) which was available in 2018 to all eligible participants and will be offered again for the 2019 coverage year. You can enroll in the Kaiser HDP no matter what benefit coverage level (A, B or C) you qualify for.
2019 HSA Contribution Limits
The maximum contribution limits to an HSA for 2019 are $3,500 for single coverage and $7,000 for 2-party or family coverage. These limits change every year, so if you establish an HSA, keep up-to-date on the allowable annual contribution limits.
2019 HDHP Minimum Deductibles
For calendar year 2019 the IRS regulations define a High Deductible plan as one that has an annual deductible of at least $1,350 for single party coverage, and $2,700 for those with two-party or family coverage.