HSA FAQs

Your health insurance provider would be able to tell you if you have an HSA-eligible HDHP. Your health plan is an HDHP if it meets certain requirements, which vary based on type of coverage you have (self-only or family).

2015 HDHP Requirements:

Qualified medical expenses are medical expenses that are:

• Incurred on behalf of the HSA owner, his/her spouse, or dependents
• Incurred after an HSA has been established
• Not covered by insurance
• Paid by the HSA owner, his spouse or dependents

As the HSA owner, you can take money out of your HSA at any time to pay for qualified medical expenses tax free, even if you are no longer an HSA eligible individual at the time of the distribution.

As the HSA owner, you are responsible for determining whether an expense is a qualified medical expense and therefore, a qualified distribution, so review the information answering the question, “What are qualified medical expenses?” You should also keep your receipts and maintain your records for any tax free distributions you take from your HSA, in case you need to defend your expenditures or decisions during an IRS audit.

HSAs are designed to help you save for future qualified medical expenses on a tax-free basis. HSAs are individually owned accounts to which you can make tax deductible contributions, accumulate tax deferred earnings, and take tax free distributions whenever you need to pay for qualified medical expenses.

The maximum amount you can contribute to an HSA each year depends on:

• Whether or not you are eligible for a contribution, and if so, if you are eligible for a catch-up contribution;
• What type of HDHP coverage the HSA owner carries throughout the year (self-only or family); and
• How many months the HSA owner is covered by a qualified HDHP.

Total contributions made by or on behalf of an HSA owner cannot exceed the annual contribution limit for the given year.

You can use the money in your HSA to pay your insurance deductible when qualified medical expenses arise. One of the biggest advantages for having an HSA is that, unlike flexible spending accounts (FSAs), any unused savings in the HSA accumulate year-over-year with tax deferred earnings can be used to pay for qualified medical expenses in the current or future years for you, your spouse, or your dependents.

With HSAs, you use pretax dollars to pay for future medical expenses. The contributions you make to your HSA are tax deductible, and the earnings accumulate on a tax deferred basis. Your HSA distributions will be tax free if they are used to pay for qualified medical expenses. Any unspent account balance will continue to accrue earnings each year, so there is no “use it or lose it” provision.

As the HSA owner, you can take money out of your HSA at any time to pay for qualified medical expenses tax free, even if you are no longer an HSA eligible individual at the time of the distribution.

As the HSA owner, you are responsible for determining whether an expense is a qualified medical expense and therefore, a qualified distribution, so review the information answering the question, “What are qualified medical expenses?” You should also keep your receipts and maintain your records for any tax free distributions you take from your HSA, in case you need to defend your expenditures or decisions during an IRS audit.