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 to the Fund’s participants and that are available in the health insurance marketplace.

In furtherance of that goal, and as reviewed in this article, the Fund now offers, for registration by all Fund Participants, two “High Deductible Plans” (“HDP’s”) 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 the individual participant (this means “you”) 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 set up and qualify for an HSA.

No permission or authorization from the IRS or the Fund is necessary to establish an HSA. You just need to fill out some paperwork to set up an HSA with a “trustee”: a qualified HSA trustee is any bank, insurance company, or anyone already approved by the IRS to be trustee of individual retirement arrangements (IRAs).

The HSA trustee, though, is different from your health plan provider. The job of the HSA trustee is to pay you, not your doctor or other provider, with reimbursement funds from the HSA. Also, and 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 proper set-up 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 (many banking institutions now offer this service).

Once the HSA is set up, it is the Participant’s duty to keep the HSA properly funded and administered: the Fund has no role at all 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 group-sponsored high deductible health plan (such as the two HDHP’s offered by the Fund)

You have no other health coverage except what is permitted by federal law (i.e., the Affordable Care Act & the Internal Revenue Code)

You aren’t enrolled in Medicare

You can’t be claimed as a dependent on someone else’s tax return

You have an approved/IRS compliant 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 make from our own money 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, no longer qualify for participation in the Fund’s benefit plans 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 or else you can lose the tax advantaged status of the HSA

The Fund’s High Deductible Plans:

Currently, the Fund offers the following High Deductible Plans for calendar year 2019 enrollment/coverage:

Blue Shield High Deductible PPO PLAN

The Fund offers Blue Shield High Deductible PPO (“Blue Shield HD PPO”) plan to participants who have qualified for “Level A” or “Level B” benefit coverage.

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 is available in 2019 to all eligible participants. 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.

The above levels of deductibles as well as the allowable individual/employer annual HSA contribution will change for calendar year 2020. Please consult you CPA, financial advisor and/or the IRS website for the calendar 2020 allowable HSA annual contribution limits and deductible requirements.