What is a Health Savings Account (HSA)? An HSA is a special, tax-advantaged account - meaning money goes in tax free, earns interest tax free and is not taxed when it is withdrawn to pay for qualified expenses.
Is there an annual "cap" or maximum amount that may be contributed to my HSA? HSA contributions are limited to your High Deductible Health Plan's (HDHP) annual deductible or $2,650 for an individual or $5,250 for a family, whichever is less. If you participate in a HDHP for less than the entire taxable year, the limit is prorated on a monthly basis. These limits will be adjusted for inflation in future years.
Who is eligible for an HSA? To be eligible, you must be covered by a "high-deductible" health plan (a deductible of at least $1,000 for individuals and $2,000 for families - adjusted each year for cost of living). You cannot have other health insurance coverage (including a spouse's plan) that is NOT a "high-deductible" plan. You may not contribute to an HSA once you are eligible for and enrolled in Medicare.
What happens to any remaining money in my HSA at the end of the year? At the end of the year, any money remaining carries over to the next year.
Does the money in my HSA earn interest? Yes - your HSA can grow over time! Your funds earn interest tax free. There is no minimum balance required to earn interest.
When will contributions to my account be available for withdrawal? HSA contributions will be available for withdrawal when funds are deposited. HSA contributions made by payroll deduction are pro-rated over the course of the plan year based on payroll schedules. HSA contributions may also be made on a lump sum basis at any time during the plan year. The availability of funds is dependent upon how funds are contributed (payroll deduction or periodic, lump sum contributions) and varies by individual.
What expenses can I pay for with my HSA? Your HSA can be used to pay for most "qualified expenses" as defined by IRS Code 213(d). These expenses include, but are not limited to, medical plan deductibles, diagnostic services covered by your plan, health insurance premiums if you are receiving federal unemployment compensation, over-the-counter drugs, LASIK surgery and some nursing services. For the complete list of IRS-allowable expenses, you can request a copy of IRS Publication 502 by calling 1-800-829-3676, or visit the IRS website at www.irs.gov and click on "Forms and Publications."
Can I use my HSA to pay for non-health-related expenses? Yes. You may withdraw money from your HSA for items other than qualified expenses, but it will be subject to income tax (unless you are age 65 or disabled) and an additional 10 percent penalty tax on the amount withdrawn.
Why Are Health Savings Accounts Becoming Popular? Health Savings Accounts (HSA) are becoming more popular as the cost of health insurance continues to increase. An HSA provides a method for you to reduce health insurance costs by enrolling in a less expensive High Deductible Health Plan as long as you are willing to finance, through the HSA, the medical expenses that are incurred, up to the amount of the deductible. An HSA also provides certain tax advantages and investment opportunities. You should consult with a tax advisor to determine eligibility requirements and tax advantages before you decide to participate in an HSA.
Can I obtain an HSA through USFSB? Yes. USFSB offers a variety of options on a national level including United Healthcare and Aetna, and in New York we also offer Empire BlueCross BlueShield.
For more information about this program, please contact Darlina at 1-800-637-3331, M-F 9AM-5PM, est or use our online contact form.
