The Health Savings Account

(HSA)

NIA/Combined presents:

About Assurant Health

• U.S. individual medical market leader

• In business over 110 years

• More than 1,000,000 customers1

1Assurant Health is the brand name for products underwritten and issued by Time Insurance Company.

Assurant Health—an HSA leader

• At the forefront of HSA legislation

• Sold the first HSA

• Expert in account administration

• Offers one of the only custodial accounts in the country providing seamless administration option with no fees

What is an HSA?

• Tax-sheltered savings account

• Allows for the accumulation of funds to pay for qualified current and future health care expenses

• Paired with a qualified high deductible health insurance plan

• Together, the high deductible plan and HSA provide:

— Premium savings

— Tax advantages

— Investment opportunities

Huge new opportunity

HSAs are:

• Tax free• Flexible• Permanent• Portable

Assurant Health makes HSAs simple and easy

How big is the HSA market?

• Congressional analysts estimate up to 40 million accounts will be created over the next 10 years

• Everyone2 with a qualified high deductible plan is eligible

• HSAs make high deductible medical plans more attractive and easier to sell than ever before

2To be eligible, the qualified high deductible health plan must be the client’s only major medical coverage.

Federal guidelines• Annual contribution limits for 2006 are the lesser of:

1) The deductible or

2) $2,700 (individual) / $5,450 (family)

• Individuals 55 and over are allowed to contribute an additional $700 for 2006

• Unused MSA plan funds may be rolled over into an HSA without penalty

• No first-dollar benefits except for wellness

HSA deductiblesSingle Family

Maximum Out-of-Pocket

$5,250 $10,500

Assurant Health Deductibles

$1,100 $2,200

$1,600 $3,200

$2,100 $4,200

$2,700 $5,400

$5,000 $10,000

Family deductiblesWhat is a common family deductible?

A common family deductible refers to the accumulation of all medical expenses for all covered persons to meet a single deductible

HSA advantages

• Funds are contributed tax free

• Funds gain interest tax free

• Withdrawals for qualified medical expenses are tax free

• Funds can be withdrawn at age 65 for other purposes without penalty—only ordinary income tax applies

(A 10% penalty plus ordinary income tax applies if funds are withdrawn before age 65 for non-medical expenses)

Eligible expensesQualified withdrawals:

• Eligible medical expenses as defined under Section 213 (d) of the IRS code

— Medically necessary services

— Deductibles and coinsurance

— Vision correction

— Dental expenses

— Non-prescription drugs

• Qualified long-term care premiums

• COBRA continuation premiums

• Premiums while unemployed

• Medicare Part A, B and D premiums (not Medicare supplemental premiums)

Cost comparison scenario

• Family coverage (husband and wife are 37 years old, have two children)

• 28% federal tax bracket

• Living in metropolitan area

• $1,500 in claims

Typical Family PlanThree times single deductible = $1,000

Assurant Health HSA PlanCommon family deductible = $5,400

Coinsurance: 80%/20% 100%

Premium paid: $8225 $4,506

Insured’s share of health care

expenses: ($1,500 claim)

$1,000 for deductibles, $100 for coinsurance, $550 for dental/eyewear expenses+$1,650

$1,500 for deductible and $550 for dental/eyewear expenses

+$2,050

Expenses subtotal: $9,875 $6,556

Tax savings on HSA deposits:

$0 $1,512

Net expenses: (out-of-pocket minus tax savings)

$9,875 $5,044

Total net savings with HSA Plan:

$4,831

HSA Balance $3,350

Cost comparison

HSA administration options

• HSA Fundamentals

— feeless, seamless administration

• HSA Tools

— enhanced administration

HSA Fundamentals—feeless, seamless administration• No administrative, setup or user fees

• Competitive interest rates

• Optional automatic claims payment

• Several contribution options

— Monthly, quarterly, semi-annual, annual

HSA Tools—enhanced administration option• VISA debit card

• Simple, comprehensive online features

• Competitive interest rates

• All for only $3.95 per month

— Fee not applicable in AZ, GA and NC

Money withdrawal methods

HSA Fundamentals

• Automatic disbursement method

• Manual disbursement method

Assurant Health HSA Tools

• VISA debit card

Clients save premium, reduce taxes

and build savings• Unused funds accumulate from year to year

• Use the money to pay for qualified medical expenses tax free as they occur

• Save money tax free for future medical expenses

• Accrue savings and build a tax-sheltered fund for other expenses in retirement

Get a jump on the competition

• Since everyone with a qualified high deductible medical plan is eligible, these accounts will be in big demand

• Don’t lose a sale to a competitor because you don’t offer them

• Assurant Health has a market leadership position

• Your HSA experts at Assurant Health are ready to assist you

Want more information?

For more information or to obtain additional HSA sales materials, see

www.assuranthealthsales.com