|
The following information is a brief description of health savings accounts (HSAs) and some of the benefits and rules regarding their use. Federal tax laws regulate HSAs; therefore, you are encouraged to access the most current and more detailed information at the Department of Treasure website:
The Basics
What is a Health Savings Account (HSA)?
What is a High Deductible Health Plan (HDHP)?
Who Can Have a Health Savings Account?
Who can set-up an HSA?
Can a spouse establish his/her own HSA?
Can a child establish his/her own HSA?
Are there income limits?
Is it necessary to have earned income to contribute to an HSA?
What other health coverage is allowed for an individual to still be eligible for an HSA?
What Does a High Deductible Health Plan Cover?
What plans qualify as HDHP plans?
What “first-dollar” medical expenses are covered?
What “first-dollar” medical benefits could make someone ineligible for an HSA?
What covered benefits must apply to the plan deductible?
What are some of the HDHP reasonable benefit designs that are not counted toward the out-of-pocket maximums?
What about prescription drugs?
What about preventive care?
What is the “safe harbor” list for preventive care?
How Do I Use a Health Savings Account?
HSA Distributions
What are qualified medical expenses?
Can HSA funds be used to pay other health insurance premiums?
Are premiums for long-term care insurance considered to be a qualified medical expense?
How can I use funds from my HSA to pay my provider?
Can I use my HSA to pay for medical services provided in other countries?
top
What Records Do I Need to Keep?
Should the HSA account holder keep receipts or other records of medical expenses?
Can distributions from an HSA be used to reimburse prior years’ expenses?
What if I Lose My High Deductible Health Plan Coverage?
I have an HSA but no longer have HDHP coverage. Can I still use the money that is already in the HSA for medical expenses tax-free?
What happens to the money in my HSA if I lose my HDHP coverage?
What are Health Savings Account Custodians or Trustees?
What does the HSA custodian or trustee do?
Who can be an HSA custodian or trustee?
Can the HSA custodian or trustee put reasonable limits on accessing money in the account?
What about HSA custodian or trustee fees?
top
General Questions About Health Savings Accounts
How much can I contribute to an HSA annually?
What happens to the money in an HSA after I turn age 65?
Can mistaken distributions from an HSA be returned to the HSA?
Who owns/controls the HSA account?
Do “use it or lose it” rules apply to HSA accounts?
Are all amounts in an HSA account fully vested?
What happens to unspent HSA account balances?
HSA account investment options and investment restrictions.
Are rollovers from Archer MSAs and other HSAs permitted?
Where Can I Go for More Information?
How do I contact the U.S. Treasury Department?
top
The Basics What is a Health SavingsAccount (HSA)? An HSA is a special account owned by an individual where contributions to the account are to pay for current and future medical expenses. HSAs are used in conjunction with a “High Deductible Health Plan” (HDHP) offered on an individual basis or on a group basis through your employer. These accounts can be interest bearing or earn income on the invested money. top
What is a High Deductible Health Plan (HDHP)?
- • A health insurance plan with minimum deductibles for 2006 of at least $1,050 for an individual and $2,100 for a family, and maximum annual out-of-pocket amounts (including deductibles and copays) that are indexed annually for inflation.
- • If the HDHP covers more than one person, the entire “family” deductible must be satisfied before any benefits are paid.
- • First-dollar coverage (no deductible) for certain preventive care services (copays are allowed).
- • Higher out-of-pocket amounts (copays and coinsurance) for non-network services are allowed.
- • The in-network deductible determines HSA contribution limit.
top-
- Who Can Have a Health Savings Account?
Who can set-up an HSA? Any individual that meets all of the following:
• Is covered by a High Deductible Health Plan (HDHP).
• Is not covered by any other insurance with first-dollar coverage. (Specific injury insurance or accident, disability, dental care, vision care, or long-term care insurance are permitted.)
• Is not enrolled in Medicare.
• Cannot be claimed as a dependent on someone else’s tax return. top Can a spouse establish his/her own HSA? Yes, spouses can establish their own HSAs, if eligible. Can a child establish his/her own HSA? No, children cannot establish their own HSAs if they are claimed as a dependent on someone else’s tax return. top Are there income limits? No, there are no income limits on who may contribute to an HSA. Is it necessary to have earned income to contribute to an HSA? No, there is no requirement of having earned income to contribute to an HSA. top What other health coverage is allowed for an individual to still be eligible for an HSA?
- • Specific disease or illness insurance, accident insurance, disability, dental care, vision care, and long-term care insurance.
- • Employee Assistance Programs (EAP), disease management programs or wellness programs.
- • Drug discount cards.
- • Eligibility for VA benefits (unless you have actually received VA health benefits in the last 3 months).
What Does a High Deductible Health Plan Cover? What plans qualify as HDHP plans? Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) or Indemnity plans qualify as HDHPs, as long as each meets the requirements. top What “first-dollar” medical expenses are covered? Except for certain preventive care services, first-dollar medical benefits are not allowed in an HSA-qualified HDHP. What “first-dollar” medical benefits could make someone ineligible for an HSA?
- • Medicare
- • Tricare
- • Flexible Spending Arrangements (FSA)
- • Health Reimbursement Arrangements (HRA)
- top
|
