Health Savings Accounts

The cost of health care is rising, but how much you will actually spend on medical expenses varies. This means that most people have extra funds available for investing in the future, and a health savings account (HSA) is a great way to accomplish both. By opening an HSA, you can place money into the account to go towards qualified medical expenses. a laptop computer sitting on top of a table

a laptop computer sitting on top of a table

If you have money left in your HSA at the end of the year, it will simply roll over and grow over time through the accrual of tax-free interest.

Frequently Asked Questions

How do I manage an HSA?

Since you are the account holder or HSA beneficiary, you manage your own account. These plans must be coupled with a high deductible health plans (HDHPs).

What expenses are eligible for reimbursement with an HSA?

HSA dollars may be used for qualified medical expenses incurred by the account holder and dependents. According to IRS Section 213(d), “[an] expense has to be primarily for the prevention and alleviation of a physical or mental defect or illness.” In addition, COBRA premiums; health insurance premiums in conjunction with unemployment benefits; qualified long-term care premiums; and health insurance premiums paid by those over age 65 (other than for a Medicare supplemental policy) may be paid with HSA dollars.

What happens if HSA funds run out?

If your HSA dollars run out, you will be responsible for eligible medical expenses that fall within the coverage gap.

Can HSA dollars be used for non-eligible expenses?

Money withdrawn from an HSA to reimburse for non-eligible medical expenses is considered taxable income and is subject to a 20 percent tax penalty, unless you are over 65, disabled or upon the death of the account holder.

When can HSA dollars be used?

HSA dollars can be used immediately following your account activation and once contributions have been made.

When can you contribute to an HSA account?

You, your employer and others can contribute to an HSA account as often as you like through payroll deductions or in the form of a lump sum deposit, provided that you do not exceed the annual limits.

How do you pay your physician or network for services with HSA dollars?

Once the medical claim has been processed, out-of-pocket expenses will be billed to you (if any). At that time, you can use your HSA debit card or check to pay for any out-of-pocket expenses; or you can write a personal check and request reimbursement from your HSA at a later date.

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