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AgendaIntroduction to The Bancorp BankHSA Eligibility, Features and BenefitsContributions, Distributions & Qualified Medical ExpensesSummary of Healthcare Reform-Related ChangesBancorp Product FeaturesStatements and Tax InformationEnrollment Process for IBC MembersFunding OptionsHSA Withdrawal MethodsOnline Tools Investment Platform Overview Resources

The Bancorp Bank FDIC insured full-service financial institution Headquartered in Wilmington, Delaware Highly experienced banking and technology management team Publicly traded (NASDAQ NM: TBBK) One of the top 6 HSA Custodians- Over 268,000 Health Savings Accounts- 400 Million in HSA Deposits- Clients Provide Services to over 22 Million Members A leader in HSA administration since January 2004 Member of the ABA HSA Council, HSA Coalition and NAHU Principle member of both Visa and MasterCard

How Does a Health Savings Account Work?High Deductible Health PlanComponent (HDHP)Health Savings Account Component(HSA)HDHP HSA SolutionHealth Insurance used to coverexpenses for illness or injury aftermeeting a minimum deductibleamountTax-Advantaged account which canbe used to cover medical expensesbefore the insurance deductible ismet. Funds may also be saved forfuture medical expensesControl Healthcare Expenses!Increase Tax Savings!Lower Insurance Premiums!Flexibility & Portability!Savings for Retirement!Lower premiumsProtection from big medical billsCovers same eligible expensesSame provider networkHelps pay deductiblePre-tax contributionsTax-deferred growthTax-free withdrawals for medical

HSA Key Features & EligibilityKey Features of an HSA:HSA Eligibility: Participants must be enrolled in an Funds deposited into an HSA are taxadvantaged and owned by the account holder HSA-qualified High Deductible Health Plan Accounts can accumulate significant assetsthat can be used for healthcare tax free Individuals cannot be covered by any otherinsurance that reimburses for healthexpenses at the same time they arecontributing to their HSA. That wouldinclude current coverage by a medicalFlexible Spending Account.“Limited-purpose” or “Dependent-care”FSAs do not conflict with an HSA Funds in the HSA can be invested Cannot be enrolled in Medicare or Medicaid Funds are portable – available through jobchanges Cannot be eligible to be claimed as adependent on another person’s tax returnand must be over 18 years of age Funds may be rolled over year to year; no“use-it or lose-it” rule

MedicareOnce enrolled in Medicare, an individual can continue to usetheir HSA funds, but may not contribute into their account any longerContributions After Medicare:When someone turns 65 yrs old and goes on Medicare,IRS rules state they can only contribute until the month beforethey began Medicare.Example: If an individual on a single plan that falls from January1st through December 31st were to go on Medicare in August, theycan contribute for 7 months within that calendar year. They wouldneed to calculate the maximum allowable contribution as 7/12’s.(If they wish to contribute a catch-up contribution, that can beadded to the total and pro-rated as well).

HSA and FSA ComparisonQuestionHSAFSADo the funds belong to the employee?YESNOCan the money be invested and the employeesearn interest?YESNOCan the employees use the funds for thingsother than medical expenses?YESNOIf an employee has committed to direct deposit aportion of each paycheck, can they access thefull amount of funds right away (before they areactually deposited into the account)NOYESCan the employee take the money with them ifthey switch employers?YESNODo the funds rollover year-to-year?YESGenerally, NOWho can contribute to the account?Employers and/orIndividuals (anyone)Employee

Contributions Contributions are not subject to income tax Contributions can be made by:- Account holders- Employers- Any Third Party Contributions in excess of the allowablelimits must be withdrawn or incur a 6%excise tax Individuals 55 or older may contribute“catch-up” contributions of 1000.00 peryear until they enroll in Medicare2010 & 2011Maximum Contribution LimitsIndividual 3050Family 6150Annual Catch-up* 1000*For individuals 55 and older beforethey enroll in Medicare

Distributions Money withdrawn from an HSA may be used to pay for eligible medical expenses for theaccount holder, spouse, or any dependents Reimbursement can be taken from the HSA for expenses from prior years(if the HSA was in place when expenses occurred) Withdrawals for non-medical expenses are possible:Before retirement age Distribution is taxed as income plus a 10% penalty (20% in 2011)After retirement age Only taxed as income Save those receipts!Account holders are responsible for ensuring HSA funds are usedfor qualified expenses and to maintain records

Qualified Medical ExpensesAccording to the Internal Revenue Service (IRS), HSA funds can be used to pay for: Most medical care & services, dental services and vision care “Alternative” care often not covered by traditional insurance Many over-the-counter (OTC) drugs*Starting 1/1/11, Doctor’s prescription required for these expenses Health insurance premiums under COBRA continuation coverage orwhile receiving unemployment compensation Premiums for Medicare Part A/B or qualified long term care insuranceSome examples:Rx DrugsPhysician’s FeesHospitalizationOrthodontiaChiropractic careAcupunctureReading GlassesContact Lens SolutionMaternity CostsLaser Eye SurgeryOxygen EquipmentBand-AidsDental services

How is The Bancorp Bank’s HSA Different? Bancorp is FDIC Insured and publicly traded (NASDAQ: TBBK) Competitive rates & no hidden charges - no monthly maintenance fee for Independence BlueCross members! A user-friendly website and banking portal with 24/7 access to account information A simple online bill payment service available at no cost Free online process for depositing funds from other bank accounts Free Visa debit card and a free first order of checks A free year-end summary of all HSA activity A superior self-directed investment platform 24/7 customer service - HSA experts who are dedicated to your needs

Statements & Tax FormsStatements:Issued monthly with account activity, quarterly if no activityGo Green by selecting our simple e-statements option!!Free Year-End Summary:Issued to every account holder each JanuaryAnnual tax documentation:IRS Form 1099-SA: Details distributions; Bancorp sends toCustomer and IRS by January 31stIRS Form 5498-SA: Details contributions; sent to Customerand IRS by May 31stIRS Form W-2: Reports employer contributions, including pretax payroll deductions. Employer contributions are notconsidered part of income. Produced by Employer in box 12with a code of W.

Tax Benefits - continued Personal contributions may be made through payroll deduction. If you choose to contributepost-tax funds, they may be take as an “above-the-line” deduction on your tax return Distributions are tax-free when used for qualified medical expensesInsurance CoverageTax BracketSingle Coverage15%25%28%33%Annual Tax Savings by Contribution 1,200 2,000 3,050 180 300 458 300 500 763 336 560 854 396 660 1,00715%25%28%33% 2,000 300 500 560 660Family CoverageSalary RangeTax Bracket15%25%28%33% 4,000 600 1,000 1,120 1,320Single Filing 8,026 - 32,550 32,551 - 78,850 78,851 - 164,550 164,551 - 357,700 6,150 923 1,538 1,722 2,030Max Contrib Plus Catchup 4,050 608 1,013 1,134 1,337 7,150 1,073 1,788 2,002 2,360Married 16,051 - 65,100 65,101 - 131,450 131,451 - 200,300 200,301 - 357,700

HSA Enrollment Process1st Step:Enroll in the new High Deductible Health Plan2nd Step:Apply for a Health Savings Account(HSA enrollment forms are processed during open enrollment)3rd Step:Enrollment data is forwarded to Independence Blue Cross for review4th Step:Data is sent electronically to The Bancorp Bank5th Step:Application information is processed / account is openedBancorp receives enrollment data, and immediately reviews information within 24 hours. Theaccount is opened after validation according to Customer Identification Procedures outlined inThe USA Patriot Act

Enrollment (continued)Within 2 weeks of electing a new HSA, you would receive the following items in the mail: Welcome Kit – including User Id(mailed in large white envelope) Password for Online Access(Mailed in business envelope, or may besent electronically if email is available) PIN for Debit Card Cash Access(mailed in small perforated mailer) Checks – Book of 50(mailed in a blue plastic envelope) Visa Debit Card(Mailed in a regular business envelope)409 SilversideRoad, Suite 105Wilmington, DE19809NOTE: After account opening, employeesare encouraged to watch out for newmaterials in the mail. For security, accountrelated materials are mailed in genericenvelopes simply noted with a return addressof:409 Silverside Drive, Suite 105Wilmington, DE 19809

Employee ContributionsEmployeecontributionoptions

Account WithdrawalsEmployeewithdrawaloptions

Paying for Medical ExpensesPayment to a Medical Service Provider (Doctor, Hospital, etc):Show your insurance card and explain that you have a high deductible healthplan. Most Doctor’s offices will request that you wait and pay for their serviceafter the bill is processed through insurance. It is best to pay after theinsurance EOB (explanation of benefits) has been processed and you receivethe correct bill from your provider. Always be sure to check provider billscarefully against your EOB so you receive the negotiated carrier rate!Payment at the Pharmacy:Pharmacies have a system in place which enables them to immediately accessan insurance carrier’s negotiated rate for prescriptions, so payment will benecessary at the time of purchase. Use your HSA debit card or a check forthose items. Keep in mind that it is wise to comparison-shop, as costs can vary

Online Tools: www.mybancorphsa.comThe Bancorp Bank’s Website and Online Banking Portalprovide each account holder with access to the following:Funding/Deposits/TransfersReal Time Account BalancesCheck ImagesOnline CalculatorsInvestment OptionsFree Online Bill Payment ServiceTraining OpportunitiesGuides & TutorialsHSA Information, References & Resources

Self-Directed Investment Platform Once 2500 is saved in an HSA, the member is able toopen a brokerage account offered by The Bancorp Bankthrough an arrangement with National Financial Services,a wholly-owned subsidiary of Fidelity Investments Click on “Investment Account Information” on our websiteto find the application and all necessary information Upon receipt of a brokerage application, Bancorp sendsthe member a new user id and password to allow tradingof HSA monies The HSA and brokerage account are electronically linked,allowing funds to transfer smoothly between the accountsas neededHSA

Maximizing HSA SavingsMost of us are accustomed to a traditional co-pay system where we are unaware of the realcost of healthcare. The following suggestions can be helpful in developing a more “consumerdriven” mindset to save more money with a Health Savings Account: Contribute whatever is possible (up to IRS limit) to increasetax savings Try local clinics vs. ERs for minor emergencies; Explorealternatives to physician office visits when it makes sense Buy generic vs. brand-name prescriptions if they areavailable Compare different locations’ costs for medical procedures/testing in advance. It is often possible to find a lower-costalternatives for the same procedures “Bargain shop” for medicines Wal-Mart, Sam’s Club,Costco, etc. (Check out Wal-Mart's website for their 4.00prescription list!)

Additional ResourcesVisit our website:www.mybancorphsa.comCustomer Service via email: mybancorphsa@thebancorp.com24/7 Customer Service via telephone: 1.800.283.1534For detailed information on HSAs or Qualified Medical Expenses: Visit: www.ustreas.gov/offices/public-affairs/hsa IRS: 800.829.3676 or www.irs.gov

Thank you

The Bancorp Bank HSA Program Overview for Introduction to The Bancorp Bank HSA Eligibility, Features and Benefits Contributions, Distributions & Qualified Medical Expenses Summary of Healthcare Reform-Related Changes Bancorp