What are the eligibility requirements?
Eligibility to open your tax-exempt HSA is based on meeting these basic requirements:
- Must be covered under a qualified high deductible health plan (HDHP)
- Must not have coverage by another type of health plan
- Cannot be claimed as a dependent on another person's tax return
- Cannot be enrolled in Medicare
Please contact your tax advisor to determine your eligibility.
What qualified expenses can be covered with an HSA?
Your HSA funds can be used on a 100% tax-free basis for the following:
- Qualified medical expenses
- Travel expenses to receive qualified medical care
- COBRA or other medical insurance during times of unemployment
- Long-term care insurance premiums
A great deal of healthcare costs, including many alternative medicines, are considered "qualified medical expenses" under an HSA. We have provided an easy-to-read list of eligible expenses that covers most queries.
For more detailed information, refer to IRS Publication 502.
What are the contribution limits?
Contribution limits are set by the IRS. Current 2018 contribution limits are:
- $3,450 for a single person
- $6,900 for a family
- A person age 55 or older may make an additional $1,000 in "catch-up" contributions
How can I build my HSA balance more quickly?
If you'd like, you may jumpstart your HSA with rollovers or transfers.
- May be funded by IRA rollover once during life of HSA; this rollover is subject to annual contribution limits
- Rollovers from other HSAs or other medical savings accounts are permitted once per 12-month period; these rollovers are not subject to annual contribution limits
What’s a high deductible health plan?
A high deductible health plan (HDHP) is an alternative health insurance plan to a traditional HMO or PPO plan. As the name implies, an HDHP has a higher deductible than regular health insurance plans. This may mean more out-of-pocket expenses up front. But once the deductible is met, an HDHP typically pays for 100% of covered medical costs. So in the long run, an HDHP usually means less—often significantly less—out-of-pocket expenses.
But what about that initial high deductible? That's where combining your HDHP health insurance to a health savings account (HSA) comes in. By accumulating funds in your HSA, you will have the cash needed to cover those costs. What's even better is your HSA is tax exempt.