The details of how a health savings account (HSA) works and the benefits it can provide can be explained with four simple words: deposit, grow, save and pay.

	What you need to know
Deposit your health care dollars.	Deposits — While you are participating in a high-deductible health plan, anyone can make a deposit into your HSA — you, your employer, your family or any other individual. Your employer may arrange for deposits to be deducted from your paycheck. Other options include deposit forms, the HSA administrator’s Web site and online transfers from your bank. Contribution limits — HSA contribution limits for 2011 are $3,050 for individuals and $6,150 for families.  For 2012, the limits are $3,100 for individuals and $6,250 for families. People age 55 and older may be able to make additional catch-up contributions of $1,000 each.
Grow your savings.	Interest — Deposits to your HSA can earn tax-deferred interest. Investment options* —Some HSAs offer an option to invest some of your HSA dollars in mutual funds after you have saved a certain amount in your account — if that fits your risk tolerance and long-term goals. Carry-over — There is no “use it or lose it” rule for HSAs. Unspent funds remain in your account.
Save on taxes.	Contributions — The money you contribute to your HSA is tax-deductible up to the annual contribution limit. So, if you are in the 28% tax bracket and deposit $3,000 into your HSA, you save $840 in federal income taxes. Distributions — Money you take out of your HSA to pay for eligible medical expenses is tax-free. Earnings — Interest you earn on your HSA grows tax-deferred.
Pay for health care now or later.	Eligible expenses — Pay for current and future eligible medical expenses for you, your spouse and your dependents. You can continue to use the funds in your account even if you stop participating in a high-deductible health plan (although you cannot contribute more to it). Payment methods — Some HSAs offer a debit card you can use to pay pharmacies, doctors, clinics and other health care providers on the spot. Or, you can withdraw funds to reimburse yourself for out-of-pocket expenses. Tax implications — It’s up to you to maintain records to verify that funds were used for eligible medical expenses . Funds used for ineligible expenses will be taxed as income and subject to a 20 percent penalty. If you are 65 and older, the 20 percent penalty does not apply.

Enroll today
If you have or choose a high-deductible health plan, make a health-wise investment by adding an HSA. Your employer may offer an HSA as part of your health and wellness benefits. Or, you can open one on your own if you meet the criteria.

> Visit OptumHealthBank.com to enroll in an HSA.

Health savings accounts are offered by OptumHealth Bank and are subject to eligibility. This communication is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment and restrictions. Federal and state regulations are subject to change. Please check your health benefit plan materials to determine whether your employer will make supplemental contributions to your HSA.