HSA withdrawals

📅 November 1, 2024 ✍️ By Suzanne Mcbride MD ⏱️ 26 Mins Read 🗂️ Blog 🕒 Last updated: November 5, 2024 📌 Tags:health savings account,Optum

Optum Bank℠ Health Savings Account Debit MasterCard®

You can use your Optum Bank Health Savings Account Debit MasterCard for direct payment at a doctor's office, pharmacy or any health care facility that accepts MasterCard. In most cases, the card can also be used to pay a bill from a doctor's office or health care facility, provided they accept MasterCard.

You will receive your card in the mail seven to ten days after opening an HSA. Be sure to activate your card so you can start using it for your qualified medical expenses. You can activate your card using the included toll-free number and you may obtain your PIN at that time. With your PIN you can use your Debit MasterCard to withdraw funds at any ATM displaying the MasterCard brand name. So, for example, if you go to the doctor and pay for your services out of your own pocket, you can then withdraw money at the ATM to reimburse yourself.

Optum Bank will charge a per transaction fee for ATM withdrawals. Fees may also be charged by the ATM owner.

If you would like an additional debit card, download a request form at www.optumbank.com and follow the directions. Remember that your HSA Debit MasterCard acts like any other debit card and could incur charges not made by you. Protect yourself against fraudulent charges by routinely checking your HSA statement.

Paying online

When using your Optum Bank Debit MasterCard to pay for qualified medical expenses online, you receive additional protection of your personal information by using the MasterCard SecureCode™.

A SecureCode, known only to you, validates your identity as the cardholder for online transactions with participating retailers. Here's how it works:

Each time you make an online purchase with a participating retailer, a window pops up, asking for your SecureCode.
Correctly enter your SecureCode. This confirms you are the authorized cardholder and your purchase is completed.

Online retailers cannot see your SecureCode, adding another layer of protection.

Obtaining a SecureCode

The next time you use your Optum Bank Debit MasterCard for an online purchase, you will be prompted to register for a SecureCode. Choose your password, briefly provide other requested information identifying yourself, and continue to complete your purchase.

When making future online purchases, you will be asked to enter that same SecureCode to complete the transaction.

SecureCodes are required for all your HSA online debit card purchases at participating retailers.

Online banking and bill payment

Log in to www.myuhc.com and enjoy the convenience of online banking with Optum Bank. You can view recent account activity, link to your investment account, if you have one, and view and download your monthly statements. You can also pay bills for qualified medical expenses directly to your doctor or other health care providers. With online bill payment, you can set up the names and addresses of your providers to make future payments a snap.

At time of application, you agree to receive electronic monthly statements. You can, if you choose, request to have monthly statements mailed to your home. You can opt out of electronic statements by completing and returning a statement delivery change request form, available at www.optumbank.com.

Paying with checks

You may also request HSA checks to use when paying your medical bills. Checks are issued for a fee of $10 for a book of 25. Refer to the fee schedule for a list of fees that apply to your HSA.

Reimbursing yourself

You may choose to pay for some or all of your medical expenses out of pocket, saving receipts to track your qualified expenditures.

Then, at some point in the future, you may reimburse yourself for those expenses. Go to www.myuhc.com, log in to your HSA and select "Reimburse Yourself." You'll be able to choose to set up an electronic funds transfer (EFT) from Optum Bank to your savings or checking account at another bank. Or, you can ask Optum Bank to send you a check by mail. You may also use paper checks, if you have purchased them, or withdraw money with your debit card from an ATM to reimburse yourself.

When you reimburse yourself is completely up to you. It can be weeks, months or even years after you've paid for the qualified medical expenses. You must, however, have retained the receipts for the qualified medical expenses in the event the IRS inquires, and the expenses must have been incurred after the date when you established your HSA.

Disbursement limits

OptumBank℠ limits your ATM withdrawals to $300 within a 24-hour period. There is also a $10,000 limit on disbursements at a point of service, such as a health care facility, in a 24-hour period.

Investment options are available to those with account balances in excess of $2,100.

You can learn about available investment options by calling Optum Bank customer service at 800 387 7508 or by visiting the UnitedHealthcare website at www.myuhc.com

It is important for you to know the amount in your HSA prior to withdrawing funds. You should not withdraw funds that will exceed the available balance.

Upon request from a health care professional, UnitedHealthcare and/or the financial institution holding your HSA funds may provide the health care professional with information regarding the balance in your HSA. At no time will UnitedHealthcare provide the actual dollar amount in your HSA, but they may confirm that there are funds sufficient to cover an obligation owed by you to that health care professional. If you do not want this information disclosed, you must notify the Claims Administrator and the financial institution in writing.

You can obtain additional information on your HSA online at www.irs.gov. You may also contact your tax advisor. Please note that additional rules may apply to a spouse's (who is an eligible individual) intent to opening an HSA.

Certain plan provisions may vary depending on your state of residence. For details, refer to the Certificate of Insurance.

Life and accidental death and dismemberment (AD&D) insurance offers you and your eligible dependents financial support and peace of mind in the face of unforeseen events.

Stryker provides basic life and AD&D insurance coverage through Unum at no cost to you.
You also have the opportunity to purchase additional life insurance coverage for yourself and your covered dependents, through Unum.

This section of the Stryker benefits summary provides an overview of your life and AD&D benefits. For more detailed information about these benefits and eligibility rules, refer to the Life and Accidental Death & Dismemberment Certificate of Insurance, available at the links below.

For full-time employees: https://totalrewards.stryker.com/spd/us-full-time-group-life-and-acc-group-1.pdf
For part-time employees: https://totalrewards.stryker.com/spd/us-part-time-group-life-and-acc-group-2.pdf
For Howmedica retirees (a closed group): https://totalrewards.stryker.com/spd/howmedica-group-life-and-add-group-5.pdf

Together, this section of the Stryker benefits summary and the Certificate of Insurance issued by Unum constitute the Summary Plan Description for this plan.

Rehires

If your coverage ends because you no longer work for Stryker or you are no longer in an eligible class, and you are later rehired or return to your eligible class within 30 days (and within the same plan year), coverage for you and your covered dependents may be reinstated. Evidence of Insurability will not be required as long as you return within 30 days. The reinstated coverage will be the same election that was in force when coverage ended; the amount of coverage may change if you are rehired in a new plan year.

Definition of domestic partner

For purposes of Stryker's benefit plans, a domestic partnership is defined as:

A same-sex or different-sex couple who has registered with any state or local governmental domestic partner registry.

A domestic partnership that meets all of the following requirements for the immediately preceding 12 months:

Is at least age 18 and mentally competent to enter into a legal contract when the domestic partnership began.
Is your sole domestic partner in a committed relationship and intends to remain so indefinitely.
Has not had another domestic partner within the prior 12 months.
Has not been a party to a divorce or annulment proceeding in at least 12 months.
Is not related to you in a way that would prohibit a legal marriage.
Is not legally married to anyone else, and any prior marriages have been dissolved through death, divorce or nullity.
Shares a household with you that is the primary residence of both of you (although you may live apart for reasons of education, healthcare, work, or military service).
Shares joint responsibility with you for each other's basic living expenses incurred during the domestic partnership.

Employees of Stryker Puerto Rico, Inc.

If you are an eligible full-time, active employee of Stryker Puerto Rico, Inc., you receive basic life and accidental death and dismemberment (AD&D) insurance coverage through Unum at no cost to you. You also have the opportunity to purchase additional life insurance coverage for yourself and your covered dependents, through Unum.

For detailed information about these benefits and the eligibility rules, refer to the Life and Accidental Death & Dismemberment Certificates of Insurance, available at the following links:

For full-time employees: https://totalrewards.stryker.com/spd/2024-add-life-pr-ft-ees.pdf.
For part-time employees: https://totalrewards.stryker.com/spd/2024-add-life-pr-pt-ees.pdf.

Basic Life Insurance for you	Pays benefits to your beneficiary in the event of your death Coverage of one times your eligible annual earnings, up to $500,000 Provided automatically at no cost to you
Basic AD&D Insurance for you	Pays benefits to you for certain injuries or other conditions resulting from an accident, and benefits to your beneficiary in the event of your death Coverage of one times your eligible annual earnings, up to $500,000 Provided automatically at no cost to you
Supplemental Life Insurance for you	Pays benefits to your beneficiary in the event of your death You may purchase additional coverage for yourself in any of the following amounts, up to $1,500,000: 1 × your eligible annual earnings 2 × your eligible annual earnings 3 × your eligible annual earnings 4 × your eligible annual earnings 5 × your eligible annual earnings Evidence of Insurability may be required
Dependent Life for your spouse/domestic partner	Pays benefits to you in the event of your spouse/domestic partner's death You may purchase coverage for your spouse/domestic partner in increments of $10,000, up to $100,000 Evidence of Insurability may be required
Dependent Life for your child(ren)	Pays benefits to your dependent child(ren)'s beneficiary(ies) in the event of their death You may purchase coverage for your dependent child(ren) equal to $10,000.

Stryker provides short-term disability (STD) and long-term disability (LTD) coverage through Unum. Disability coverage offers you income protection in case a sickness, injury, or pregnancy, leaves you unable to work.

STD benefits and employment status

Your STD benefits are based on whether you are an exempt or non-exempt employee. Generally, you are considered:

Exempt if you are not eligible for and do not receive overtime pay
Non-exempt if you are entitled to receive overtime pay

This section of the Stryker benefits summary provides an overview of your short-term and long-term disability benefits.

For more information about the STD plan, refer to the benefits booklet for exempt and non-exempt employees, available at https://totalrewards.stryker.com/spd/unum-us-short-term-disability.pdf.
For more information on the LTD plan, all eligible employees should refer to the LTD Certificate of Insurance, available at https://totalrewards.stryker.com/spd/unum-us-long-term-disability.pdf.

Together, this section of the Stryker benefits summary and the STD booklets and LTD Certificate of Insurance issued by Unum constitute the Summary Plan Description for these plans.

Employees of Stryker Puerto Rico, Inc.

For information on the LTD plan for eligible employees of Stryker Puerto Rico, Inc., refer to the LTD Certificate of Insurance, available at:

For part-time employees: https://totalrewards.stryker.com/spd/2024-ltd-pr-pt-ees.pdf.
For full-time employees: https://totalrewards.stryker.com/spd/2024-ltd-pr-ft-ees.pdf.

STD coverage

Eligibility	Active full-time employees scheduled to work 40 hours per week Active part-time employees scheduled to work 20 hours per week
Cost for coverage	Stryker pays the full cost of your STD coverage. You do not contribute toward the cost of STD coverage
Enrollment	Eligible employees are automatically enrolled for STD coverage as of their date of hire
When coverage ends	Generally, coverage under the STD plan ends on the earliest of the following: The date you leave Stryker. Qualifying disabilities, which occur prior to separation, will remain covered by the plan The date you're no longer actively employed The date the plan is terminated
Weekly benefit	Exempt employees: Weekly benefit equal to 100% of your eligible earnings Non-exempt employees: Weekly benefit equal to 60% to 100% of your eligible earnings: For the first 56 days of disability: 100% of your eligible earnings For days 57 to 180: 60% of your eligible earnings Benefits are reduced by the amount of any other income benefits, such as state disability or workers' compensation
When benefits are payable	Benefits are payable beginning on the: Eighth day of your total disability due to sickness First day of total disability due to an accident, outpatient surgery, or a hospital stay
How long benefits last	Generally, benefits are payable for up to: 173 days if disability is due to sickness 180 days if disability is due to an accident

LTD coverage

Eligibility	Active full-time employees scheduled to work 40 hours per week
Cost for coverage	Stryker pays the full cost of your LTD coverage. You do not contribute toward the cost of LTD coverage
Enrollment	Eligible employees are automatically enrolled for LTD coverage as of their date of hire
When coverage ends	Generally, coverage under the LTD plan ends on the earliest of the following: The date you leave Stryker. Qualifying disabilities, which occur prior to separation, will remain covered by the plan The date you're no longer actively employed (including temporary layoff or leave of absence) or become otherwise ineligible The date the plan is terminated
Monthly benefit	Disability income equal to 60% of your monthly pre-disability earnings, up to $15,000 a month as defined by the plan rules Benefits are reduced by the amount of any other income benefits, such as worker's compensation, no fault disability insurance, Social Security disability, veteran's benefits, and state disability
When benefits are payable	Benefits are payable beginning on the 181st day of your total disability, provided you are under the regular care of a physician and have an approved disability
How long benefits last	Generally, benefits are payable up to the earlier of the date: You are no longer totally disabled as defined by the plan Your current pay exceeds 80% of your indexed pre-disability earnings You reach your normal retirement age (rules vary if you are age 64 or older when you become totally disabled) You die

Stryker sponsors the Stryker Corporation 401(k) Savings and Retirement Plan (the "Plan") so that you and other employees of Stryker and its participating subsidiaries (all referred to in this summary as the "Company") may save for retirement on a before-tax basis. The benefits provided under the Plan are in addition to Social Security.

The Plan provides different benefits for sales representatives and eligible employees other than sales representatives. To help each participant understand the Plan without confusion, the benefits are described separately, in two summary plan descriptions (SPDs):

401(k) Plan (Non-Sales Rep Employees)
401(k) Plan (Sales Reps)

The SPD's purpose is to explain your rights under the overall Plan. Note that each version of the SPD contains all the information required to be a complete SPD for the Plan. You do not need to read any other sections of the Stryker Benefits Summary to obtain the information you need for this Plan.

You are urged to read the SPD that applies to you carefully and to acquaint your family or beneficiaries with the Plan. You should retain a copy of the SPD for future reference.

As of January 1, 2024, this benefits summary replaces all earlier descriptions of the Stryker Healthcare Benefits, Spending Accounts, 401(k) Savings and Retirement Plans and Additional Benefits. The summary plan descriptions outline the Plans, which are complex and technical legal documents. In the event of any difference between the summary plan descriptions and the Plan document, the terms of the Plan document will control.

The Stryker Corporation 401(k) Savings and Retirement Plan (the "Plan") gives participants a way to save for their future financial needs.

Important

This summary plan description (SPD) describes the main features of the Plan that apply to Stryker employees who are not sales employees (different Plan features for employees who are sales employees are described in a separate SPD). As used in this SPD, "sales employee" means an employee who has a classification of "Direct Sales" in the Job Family segment within the Company's or other Participating Employer's human resources management system. If an employee's status changes from a sales employee to a non-sales position or vice versa, the features described in this SPD apply only with respect to the period of employment in a non-sales employee position.

The Plan is a type of profit-sharing retirement plan known as a "401(k)" plan. This means that you may elect to defer part of your compensation and have the Company contribute the deferred amount to the Plan instead of receiving it in your paychecks. The Company may also make discretionary contributions and will make matching contributions, as explained in "Contributions to the Plan."

Your pay deferrals, Roth pay deferrals, and the other Company contributions made for you are placed in accounts in your name. Your accounts are invested together with the other participants' accounts in certain investment funds. The investment earnings are allocated to the accounts.

Your benefits from the Plan are the vested amounts in your accounts. When you leave the Company and become eligible for benefit payments, the Trustee will make the payments in the form you choose until you have received the full amount owed to you from your accounts. The amount in your accounts will largely depend on the amount of your deferrals, the amount of Company discretionary and matching contributions, and the investment performance of the funds in which you are invested.

You will not be taxed on the contributions to the Plan (except for contributions that are Roth pay deferrals), or on the investment earnings credited to your accounts, until these amounts are actually distributed to you from your accounts. If you receive a "qualified" distribution from your Roth accounts, as explained in "Tax consequences of Roth distributions", you will not be taxed on the investment earnings credited to your Roth accounts.

Plan records are administered by The Vanguard Group located in Valley Forge, Pennsylvania. You can access information about the Plan and your accounts (including information on your investment performance, account balance, loan information, current investment elections and your recent activity) by

Calling Vanguard's VOICE Network automated phone service (at 800 523 1188), which is available 24 hours a day,
Accessing your account through the Vanguard web site (www.vanguard.com/retirementplans), or
Speaking directly to a Participant Service Associate ("PSA") during business hours (at 800 523 1188).

You can also use any of these methods to make or cancel a pay deferral election or Roth pay deferral election, change your pay deferrals or Roth deferrals, change how your existing account balance is invested, change the investment mix of future contributions or your current account balance, and change your Personal Identification Number.

You will become a participant in the Plan on the date you become an eligible employee of the Company (but not before your 18th birthday).

You are not eligible to participate in the Plan if:

You are a temporary employee (that is, you were hired for a position that is not permanent and is not expected to continue for more than one year), unless and until you complete 1,000 hours of service during the first 12 months of your employment or during any Plan Year thereafter;
You are a "leased" employee;
You are a union employee (unless your collective bargaining agreement provides for participation in the Plan);
You are employed by one of the Company's foreign branches;
You actively participate in another 401(k) or similar plan to which the Company or an affiliate of the Company contributes;
You are not on the Company's payroll, or you are classified as an independent contractor (even if an agency or court later determines that your relationship to the Company was that of a common law employee); or
You actively participate in a non-U.S. retirement plan or government retirement system to which the Company or an affiliate of the Company contributes.

If you terminate employment with the Company after you have become a participant, and you later become reemployed, you will resume participation in the Plan on your reemployment date.

At the end of each Plan Year, the Company will decide on the amount of its discretionary contribution for that year. The Company is not required to make a discretionary contribution.

Who is eligible

After you become a participant, you will share in the Company's discretionary contribution, if one is made, for a Plan Year if:

You are employed on the last day of the Plan Year and have at least 1,000 hours of service during the Plan Year; or
You terminate employment during the Plan Year as a result of your retirement after reaching age 65, total disability, or death.

An hour of service is each hour for which you are paid or entitled to be paid by the Company or an affiliate of the Company.

Contribution amount

Your share of the Company's discretionary contribution will be a percentage of your compensation while you are a participant during the Plan Year. If the Company contributes less than 7% of the total compensation of all participants during the Plan Year, a cap will apply to the amount of compensation qualifying for the maximum discretionary contribution percentage.

Example 1

Assume the Company makes a 7% discretionary contribution for a Plan Year in which your compensation is $30,000. Your share of the Company discretionary contribution is $2,100, and it will be credited to your "discretionary contribution account."

Example 2

Assume that your Plan Year compensation is $125,000, and that the Company makes a 7% discretionary contribution for compensation capped at $110,000. Your share of the discretionary contribution is $7,700.

Example 3

Assume that your Plan Year compensation is $125,000, and that the Company makes a discretionary contribution of 7% of compensation up to $110,000 and 1% of compensation above $110,000. Your share of the discretionary contribution is $7,850.

You may contribute to the Plan by deferring a portion of your compensation as either pay deferral contributions, Roth pay deferral contributions, or a combination of both.

How to make pay deferral contributions or Roth pay deferral contributions

You may elect to defer a portion of your compensation and have the Company contribute your deferred compensation to the Plan on your behalf. When taken on a pre-tax basis, these contributions are called "pay deferrals" and are credited to your "pay deferral account." When taken on an after-tax basis, these contributions are called "Roth pay deferrals" and are credited to your "Roth pay deferral account." Contact Vanguard (see "Contacting Vanguard") to make a pay deferral election and/or Roth pay deferral election.

Your pay deferrals and Roth pay deferrals may be any whole percentage up to a combined total of 75% of your compensation during a Plan Year. However, your total pay deferrals plus Roth pay deferrals may not exceed the dollar limit described in "Dollar Limit," and the Company may limit pay deferrals for highly paid employees to ensure that IRS nondiscrimination tests are met.

Automatic enrollment

If, upon becoming eligible to participate in the Plan, you fail to make an election either to make pay deferral contributions or Roth pay deferral contributions, or to opt out, you will automatically be treated as having made a pay deferral election. Your automatic election will start at 3%* of your compensation and will increase by 1% each year until it reaches 8% (15% if you became eligible to participate in the Plan on or after July 1, 2017). This automatic election will cease to apply, however, if and when you make your own pay deferral election or Roth pay deferral election, or elect not to make pay deferral contributions or Roth pay deferral contributions. Amounts contributed to your account under automatic enrollment will not be treated as Roth pay deferrals.

* If you enrolled prior to April 1, 2015, your automatic pay deferral elections will start at 2% of your compensation.

Changing, stopping, resuming contributions

You may change your pay deferral (or Roth pay deferral) percentage or stop or resume your pay deferrals (or Roth pay deferrals) at any time by contacting Vanguard (see "Contacting Vanguard"). Your instructions will be implemented as soon as administratively feasible.

If you think there is a discrepancy between the classification of pay you elected to defer as a pay deferral vs Roth pay deferral and the classification of amounts actually being taken out of your compensation, you should report that discrepancy right away, and in any case by the end of the calendar quarter following the quarter in which discrepancy occurred. Otherwise you will be deemed to have elected the classification that is actually being contributed.

Discrepancies

If you think there is a discrepancy between the percentage of pay you elected to defer (or the automatic enrollment percentage, if applicable) and the percentage actually being taken out of your compensation, you should report that discrepancy right away, and in any case by the end of the calendar quarter following the quarter in which discrepancy occurred. Otherwise you will be deemed to have elected the percentage that is actually being contributed.

Benefits of deferring compensation

There are four benefits of deferring compensation under the Plan.

First, any amounts contributed to the Plan as a result of your pay deferral election are not subject to current income taxes. As a result, your current taxable income will be reduced. Note that this is not true for Roth pay deferral elections because they are taken on an after-tax basis.
Second, the amount contributed to the Plan as pay deferrals is invested on a tax-deferred basis. This means you will not pay income tax on the investment earnings that are allocated to your accounts. You will pay income taxes only when you receive your benefits from the Plan. As a result, this tax deferral permits a much more rapid accumulation of funds for your retirement. Unlike pay deferrals, however, your Roth pay deferrals will be taxed at the time you contribute them to the Plan, but these contributions and the related earnings will generally not be taxed when you receive a qualified distribution from the Plan. See "Tax consequences of Roth distributions" for more information on the tax treatment of distributions of Roth pay deferrals.
Third, under current provisions of the tax law, you may be ineligible to make deductible contributions to a traditional individual retirement account ("IRA"). Pay deferrals under the Plan allow you to save for retirement on a before-tax basis.
Fourth, the Company will contribute 50¢ for each $1 that is contributed to the Plan as a result of your pay deferrals and/or Roth pay deferrals (up to a maximum match equal to 4% of your compensation). The portion of your matching contribution that does not exceed 2% of your compensation will be invested in the Stryker Stock Fund. Matching contributions above 2% of compensation will be invested according to your investment election. See "Company matching contributions" for a discussion of "matching" contributions.

Example

Here is an example of how these benefits can affect you:

If you earn $30,000 per year and you defer 10% of your compensation as pay deferrals, your total deferral for the year is $3,000. The Company contributes your deferral of $3,000 to the Plan for you, along with a $1,200 matching contribution, of which $600 is invested in the Stryker Stock Fund.

In addition, the $4,200 contribution in your name is increased by any discretionary contribution that the Company makes for you and will reflect any change in value of the investment funds in which your accounts are invested. You will not pay income tax on your $3,000 pay deferral, the $1,200 match, any discretionary Company contribution, or any change in investment value until you eventually receive the amount in your accounts after terminating employment (or as a hardship withdrawal or other withdrawal).

Dollar limit

Federal law limits the amount of your total pay deferrals (including Roth pay deferrals) in a calendar year to $23,500, subject to adjustments for inflation after 2024 (the "dollar limit").

If your total pay deferrals and Roth pay deferrals under all 401(k) plans or other qualified plans in which you participate during a calendar year exceed the dollar limit for that calendar year (January 1 through December 31), the excess amount of pay deferrals will be included in your taxable income for the year of the deferral. The excess amount will also be taxed again in the year it is distributed to you if it is not withdrawn by April 15 of the following year. To receive a distribution of the excess amount before April 15, your request for distribution must be made to the Plan Administrator by March 1.

The Company will attempt to make sure that your pay deferral contributions and Roth pay deferral contributions to the Plan do not exceed the dollar limit. However, if you participate in another employer's 401(k) plan or a pay deferral simplified employee plan (SEP) during the same calendar year, the dollar limit applies to the total deferral contributions to both plans. Also, if you participate in a tax-sheltered annuity plan of another employer, there is an increased combined limit that applies to deferrals to the Plan and the tax-sheltered annuity. You should monitor your pay deferral contributions and Roth pay deferral contributions so that you do not exceed the dollar limit.

If you will be at least 50 years old by the end of the Plan Year and you make the maximum amount of pay deferral contributions and Roth pay deferral contributions allowed under the Plan, you are eligible to make "catch-up" contributions in addition to your pay deferral contributions and Roth pay deferral contributions. The law allows up to $7,500 in catch-up contributions. Pay deferral catch-up contributions will be allocated to your pay deferral account, and Roth pay deferral catch-up contributions will be allocated to your Roth pay deferral account.

To give you an incentive to defer a portion of your compensation, the Company will make "matching" contributions based upon the amount of your pay deferrals and/or Roth pay deferrals. The Company will contribute 50¢ for each $1 of your pay deferrals and Roth pay deferrals, up to a maximum matching contribution equal to 4% of your compensation.

The matching contributions are made as of the end of each Plan Year. To receive a matching contribution, you must be employed on the last day of the Plan Year and must have at least 1,000 hours of service during the Plan Year. You will also be eligible for a matching contribution if you terminate employment during the Plan Year as a result of your retirement after reaching age 65, total disability, or death.

These matching contributions made for you are credited to your "matching contribution account" as soon as administratively feasible following the end of the Plan Year. The portion of your matching contributions that does not exceed 2% of your compensation will be credited to a "2% subaccount" within your matching contribution account, and will be initially invested in the Stryker Stock Fund. Any additional matching contributions are invested in accordance with your election.

Example

Here is an example of how matching contributions work:

If you earn $30,000 per year and you defer 10% of your compensation, your total deferral is $3,000. Your pay deferrals and/or Roth pay deferrals up to 8% of your compensation ($2,400) qualify for a matching contribution at the rate of 50¢ for each $1 of deferrals, for a total matching contribution of $1,200. Of that total matching contribution, $600 (2% of your compensation) will be invested in the Stryker Stock Fund. The remainder of your matching contribution will be invested in accordance with your election.