• What is an HSA?

    Health Savings Accounts are savings accounts that allow individuals to pay for qualified out-of-pocket medical expenses using pre-tax dollars. Unlike more traditional health care accounts, the funds in an HSA belong to the individual, not the employer or the insurance company, and travel with the individual. In order to take advantage of this tax deferred savings new benefit, individuals must purchase a specific type of health insurance coverage called a High Deductible Health Plan (HDHP).

  • What is an HDHP?

    HDHP stands for "High Deductible Health Plan" and is a different type of health plan. Under an HDHP individuals are covered for large expenses and pay for their day-to-day expenses, usually up to the amount of the deductible. In order to meet the requirements an HDHP must have a deductible of at least $1,300 for individuals or $2,600 for families (IRS 2015 limits) plus certain total out-of-pocket expense maximums.

  • What are the benefits of an HSA?

    An HSA is very similar to an IRA in that:

    • Pre-tax dollars can be used to pay for qualified medical expenses
    • You are in control of more of your health care decisions
    • Funds left in an HSA can grow, tax deferred
    • Your account stays with you even if you change employers
    • After age 65 you can withdraw your funds and they are only taxed as ordinary income
  • What expenses are qualified medical expenses?

    Qualified expenses include most normal medical expenses such as:

    • Doctor visits
    • Prescription drugs
    • Dental services
    • Vision care (including contact lenses, glasses and LASIK surgery)
    • View a complete list of qualified medical expenses.
  • How much can I contribute to an HSA?

    2016

    Individuals are allowed to contribute up to $3,350

    Families are eligible to contribut up to $6,750

    2017

    Individuals are allowed to contribute up to $3,400

    Families are eligible to contribut up to $6,750

  • How do I make contributions?

    You will generally open your HSA with an initial contribution. This could be a check, an ACH withdrawal from your checking account or a contribution from your employer made payable to the HSA custodian or trustee. You may then want to set up an automatic deposit plan for future contributions. An automatic monthly deposit allows for you to fund your HSA on a regular basis without any hassle. If you prefer, you can make your full annual contribution all at once. Your employer may also make contributions on your behalf or as a benefit to you.

  • How do HSAs compare to FSAs and HRAs?

    Health Savings Accounts:

    • Financed with employee pre-tax dollars and/or employer contributions
    • Distributions for qualified medical expenses are tax free (employees required to substantiate)
    • Account balance belongs to employee and rolls-over from year to year
    • Amount withdrawn after age 65 taxable as ordinary income

    Flexible Spending Accounts:

    • Financed with employee pre-tax dollars
    • Distributions for qualified medical expenses are tax free (compliance determined at time of payment)
    • Account balance does not roll from year to year; use it or lose it

    Healthcare Reimbursement Accounts

    • Financed with employee pre-tax dollars and/or employer contributions
    • Distributions for qualified medical expenses are tax free (compliance determined at time of payment)
    • Unused funds may be carried to future years

Get a Quote