A Reserve Fund Annuity
, is a flexible premium deferred annuity, to assist policyholders with accumulating funds needed to meet their health insurance calendar year deductible, copayment, out-of-pocket limits, (or Part B excess charges with Plans A, B, and D) amount(s).
The Reserve Fund Annuity is available with ProCare Medicare Supplement Plans A, B, D, G, HDF, K, and L.
Consider these features:
• Issue ages 65-90 (65-86 is OK).
• No-load annuity – you keep the full amount you deposit.
(Less State Annuity Premium Tax in CA, ME, NV, SD, WV, & WY).
• No fees or penalty charges for withdrawal of funds.
• The interest rate is guaranteed to never be less than 3%.
You choose how to use your annuity. Use the annuity as a traditional savings vehicle. The RFA would be used to pay the following:
• Plan A – Medicare Part A hospital inpatient deductible, Medicare Part B annual deductible, and Medicare Part B excess charges
• Plan B & D- Medicare Part B deductible and Medicare Part B excess charges
• Plan G – Medicare Part B deductible
Or, use your annuity to automatically pay your calendar year deductible, copayment, or out-of-pocket (OOP) limits by authorizing Medicare Senior Health Advisor to draft funds from the annuity.
• HDF – Calendar year deductible ($2,300 in 2019)
• K – OOP Limit ($5,560 in 2019)
• L – OOP Limit ($2,780 in 2019)
This is a non-qualified annuity.
How Does This Work?
You may elect to place funds into a Reserve Fund annuity to help pay for your calendar year deductible, copayment, or out-of-pocket limits. Funds can be deposited in a lump sum and/or through monthly deposits ($50 minimum) made with your insurance premium payments. When a receives a healthcare provider’s
claim and your calendar year deductible, copayment, or out-of-pocket limits amount has not been met, we will withdraw funds from your Reserve Fund, subject to the restrictions noted on facing page, and directly pay your deductible or copayment amount to the healthcare provider to the extent such funds exist in the Reserve Fund.
Are There Restrictions?
Funds must have been on deposit in the annuity for 14 days prior to being applied to the calendar year deductible. A minimum of ten dollars ($10) must be maintained on deposit in the Reserve Fund.
There are a maximum initial deposit amount of two times the policyholder’s anticipated deductibles, copayment amounts, or excess charges for Medicare-approved services, or $4,600. $20,000 is the maximum that may be deposited over the life of the annuity. If the available funds cannot fully pay the deductible or
copayment amount to the provider, we will pay the amount available to the healthcare provider and any remaining deductible or copayment balance will be your responsibility. There are no fees associated with the payment of a deductible or copayment amounts or withdrawals from the accumulated
Any deposited funds not used and remaining at the end of the year can be left on deposit for the next year or withdrawn by you subject to the ten dollars ($10) minimum.
Annuitants in CA, ME, NV, SD, WV, & WY are subject to a State Annuity Premium Tax. Interest withdrawn on deposits will be reported on Form 1099 each year. The maturity date of the annuity must not have passed.
How Do I Enroll?
Simply complete the USFMS-AP enrollment form, including how you will deposit funds into the Reserve Fund. This form also provides your authorization to pay the calendar year deductible or copayment on your behalf. A $50 minimum initial deposit is required.
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