Health Savings Accounts - FAQ
What is a Health Savings Account?
A Health Savings Account is money put in a special account owned by an individual to pay current and future medical expenses.
Who is eligible for an Health Savings Account?
- Covered by a High Deductible Health Plan (HDHP).
- Generally not covered by any health plan that is not a HDHP.
- Not enrolled in Medicare.
- Not eligible to be claimed as a dependent on another person's income tax return.
Definition of High Deductible Health Plans
A health plan is a high deductible health plan (HDHP) if the plan satisfies both an annual deductible and an out-of-pocket expense requirement.
Health Savings Account Contribution Limits:
|Year||Self||Family||Catch-up (age 55+)|
Contributions may be made by:
- The individual.
- The employer.
- By others on behalf of the individual.
Health Savings Account Distributions
Qualified Medical Expenses are medical expenses that are:
- Incurred on behalf of the HSA owner, spouse or dependents.
- Incurred after a HSA has been established.
- Not covered by insurance.
- Paid by the HSA owner, spouse or dependent.
If a distribution is not used for Qualified Medical Expenses:
- The distribution amount will be included in income.
- 10% penalty will be assessed; this penalty will be waived upon death, disability or attaining age 65.
* Consult your tax advisor regarding the tax advantages of a Health Savings Account.