Health Savings Account – FAQ
What is a Health Savings Account (HSA)?
A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying qualified medical expenses of the account beneficiary who, for the months for which contributions are made to a HSA, is covered under a high-deductible health plan (HDHP). Get a Free Quote Now!
What is a High Deductible Health Plan (HDHP)?
Generally, an HDHP is a health plan that satisfies certain requirements with respect to deductibles and out-of-pocket expenses. Specifically, for self-only coverage, an HDHP has an annual deductible of at least $1000 and annual out-of-pocket expenses not exceeding $5100. For family coverage, an HDHP has an annual deductible of at least $2000 and annual out-of-pocket expenses not exceeding $10200. First dollar coverage for preventive care does not disqualify a plan. Get a Free Quote Now!
Who is eligible for a HSA?
“Eligible individuals” are any individuals who: are covered under a high deductible health plan on the first day of the month; are not covered by any other health plan that is not an HDHP (with certain exceptions for plans providing certain limited types of coverage); are not entitled to benefits under Medicare (generally, has not yet reached age 65); and may not be claimed as a dependent on another person’s tax return. Get a Free Quote Now!
What are the eligible expenses with a HSA?
The term “qualified medical expenses” are expenses paid by the account beneficiary, his or her spouse or dependents for medical care as defined in section 213(d) (including nonprescription drugs), but only to the extent the expenses are not being covered by insurance or otherwise. The qualified medical expense must be incurred only after the HSA has been established. For purposes of determining the itemized deduction for medical expenses, medical expenses paid or reimbursed by distributions from a HSA are not treated as expenses paid for medical care under section 213. Get a Free Quote Now!
What is the maximum contribribution to a HSA?
Health Savings Accounts (HSA) provide tax benefits for the funds that you contribute. However, the Internal Revenue Service limits the amount you are able to contribute to a HSA for each tax year. To view the annual limits click here maximum annual contributions. Get a Free Quote Now!
What are the tax benefits of a HSA?
Eligible individuals can write off contributions to a HSA up to the maximum contribution limit. Dollars in the account grow tax-deferred and can be used tax free for eligible expenses during your lifetime. After the age of 65 dollars can continue to be used tax-free for eligible expenses but you may also take taxable distributions similar to an IRA. Consult with a tax professioal for details and/or limitations. Get a Free Quote Now!
Who may contribute to my HSA?
Any eligible individual can contribute to a HSA. For a HSA established by an employee, the employee, the employee’s employer or both may contribute to the HSA of the employee in a given year. For a HSA established by a self-employed (or unemployed) individual, the individual may contribute to the HSA. Family members may also contribute to a HSA on behalf of another eligible family member. Get a Free Quote Now!
What are the survivor benefits associated with my HSA?
Upon the death of the account owner, any balance remaining in the account becomes the property of the individual named in the HSA instrument as the beneficiary of the account. If the account beneficiary is the surviving spouse, then the surviving spouse is subject to income tax only to the extent distributions from the HSA are not used for eligible medical expenses. Get a Free Quote Now!