What is a Health Savings Account?
A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying or reimbursing the qualified medical expenses of you, your spouse, and your dependents.
Am I eligible for an HSA?
You are eligible to make or receive HSA regular contributions if you:
- are covered under a high deductible health plan (HDHP) at the beginning of the month. You must have coverage on the 1st of the month to qualify for that month.
- are not also covered by any other health plan that is not an HDHP (with certain exceptions for plans providing preventative care and limited types of permitted insurance and coverage.
- are not enrolled in Medicare.
- cannot be claimed as a dependent on another person's tax return.
What is a High Deductible Health Plan - HDHP?
A HDHP is a plan with a higher deductible than traditional insurance plans. The monthly premium is usually lower, but you pay more health care expenses out-of-pockets before the insurance company pays its share (your deductible). A HDHP can be combined with a HSA, allowing you to pay for qualified medical expenses with tax-free money.
Are there other requirements for the HDHP?
Yes. The HDHP must limit out-of-pocket expenses. The maximum out-of-pocket expenses, including money applied to your deductible and coinsurance for covered charges, are set annually. These amounts are subject to cost-of-living adjustments.
How much can I contribute to my HSA?
The maximum annual contribution amount is a specified amount (subject to cost-of-living adjustments). This amount can change ever year. Please ask us about the contributions or visit the IRS website.
Note that a "catch-up" contribution is available for eligible individuals age 55 or older by the end of their taxable year and are not enrolled in Medicare.
What happens if I accidently use my HSA Debit Card for a non-qualified expense?