A high-deductible heath plan offers catastrophic coverage for you and your covered family members. In exchange for a higher annual deductible your insurance premiums are lower. With a high-deductible health plan, you pay the full cost for medical services and prescription drugs until the annual deductible is met.

The annual deductible for 2009:

• $2,700 for employee coverage
• $5,450 for employee + child(ren) - deductible can be met by one person or any combination of family members
• $5,450 for employee + spouse/domestic partner - deductible can be met by one person or any combination of family members
• $5,450 for family coverage - deductible can be met by one person or any combination of family members

To be eligible for a HSA you must meet the following criteria:

• You participate in a qualified high deductible heath plan (HDHP).
• You have no other health care coverage, unless the other health coverage is an HDHP.
• You are not enrolled in Medicare.
• You are not claimed as a dependent on someone else's tax return.

Enrollment in the Consumer Choice PPO Plan makes you eligible to enroll in a HSA through Bank of America.

You are the primary account owner of your HSA. You are responsible for not contributing more than the amounts allowed by the IRS.

The contribution limits for 2009 is:

• $3,000 for employee coverage
• $5,950 for family coverage (employee + spouse, employee + child(ren) or family)

When calculating your contribution amounts, be sure to include your premium rebate see monthly price sheet.

If you are turning age 55 in 2009, you are eligible to make $1,000 in catch-up contributions to your HSA.

Mid-Year Enrollees
If you become eligible to contribute to an HSA at any point after Jan. 1, there are some requirements to be eligible to make these full contributions. Specifically, the account owner must have qualifying HDHP coverage for at least one full month by Dec. 1. In addition, you must maintain HDHP coverage and continue to be an HSA-eligible individual during the 13-month period beginning with that month of that calendar year and ending at the end of the following calendar year. Failure to maintain HSA eligibility may result in income tax and a penalty on the contribution amounts attributable to the months before you had HDHP coverage.

For Example
If an individual enrolls in self-only HDHP coverage that qualifies them to open an HSA by December 1, 2008, they may contribute up to the maximum limit as if they had been enrolled for the entire year - up to $3,000. To avoid taxes and penalties, the enrollee must maintain HDHP coverage for the next 13 months, or through Dec. 31, 2009.

If you exceed the maximum, you must file the necessary paperwork for adjustments to your annual income tax. You are responsible for ensuring that your account is used to pay for qualified health care expenses.

If you withdraw funds for other purposes, those distributions will be subject to ordinary income tax, and in some cases, a 10% penalty. Be sure to review your HSA Welcome kit and visit the www.IRS.gov Web site for more information on HSA regulations.

While enrolled in the Consumer Choice Plan, Farm Credit Foundations pays the account set-up fees and the monthly maintenance fee. Additional fee information will be included in the Bank of America HSA Welcome Kit.

Your employer, you and your family members may make contributions to your HSA. Contributions can be made any time of the year in one or more payments.

• You can contribute to your HSA with pre-tax dollars taken directly from your paycheck.
• You may deposit contributions directly into the HSA.

About two weeks after your enrollment in the Consumer Choice Plan is processed, you will receive an HSA Welcome Kit from Bank. Be sure to activate your HSA online through Bank of America's Web site:

1. Go to http://www.bankofamerica.com/benefitslogin
2. Click on the "Create Your Account Login" link on the left side of the page under "Account Holder Login."
3. Complete the Applicant ID questions and then click "Continue."
4. On the next screen, follow the instructions to complete your login and password.
5. Read through the Online Service Agreement, check the box that says, "I have read and agreed to Online Service Agreement" and then click "Continue."

When you are completed, your HSA is set up! 

Debit Card
When you enroll in an HSA, you will receive a Visa debit card from Bank of America. You can use your debit card for expenses at most pharmacies and physician offices.

Online Banking
Bank of America offers online banking features for HSA participants.
Preview Bank of America's Web site and reimbursement flash video.

The amount in your HSA checking account earns money market rates, however, once your balance reaches $1,000 you may transfer funds into select additional investment choices. Visit Bank of America's Web site for more information on investment opportunities.

• Unused HSA amounts automatically roll over for use in following years
• HSAs are portable from employer to employer
• HSAs can accumulate balances which can be used to pay for medical expenses during your retirement years

Health Savings Accounts are monitored by the IRS, therefore there are tax forms you will receive and need to complete if you are an HSA account owner:

• If you use a distribution from your HSA for qualified expenses, you do not pay tax on the distribution, but you have to report the distribution on Form 8889. Follow the instructions for the form and file it with your Form 1040.
• If you use a distribution from your HSA for non-qualified expenses, you must pay tax on the distribution. Report the amount on Form 8889 and file it with your Form 1040. You may have to pay an additional 10 percent tax on your taxable distribution. There is no additional tax on distributions made after the date you are disabled, reach age 65, or die.

Additional Tax Forms
Forms 1099 SA or 1099 HSA notify the IRS of distributions made from your HSA during the tax year. Forms 5498, or Form 5498 SA, notify the IRS of contributions made to your HSA during the tax year. Mellon Financial will send the appropriate form(s) to you with instructions regarding the forms' use and requirements for filing your annual tax return.

For more information regarding HSA tax forms, contact your tax preparer or www.irs.gov.