Health Savings Account
What are the federal tax benefits of a HSA?
Contributions to a HSA are fully deductible, the earnings grow tax deferred, and distributions for qualified medical expenses are tax free. Consult with your tax or legal professional for guidance.
What is a Health Savings Account?
A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying qualified medical expenses of you and your family.
Am I eligible for a HSA?
You are eligible to make or receive a HSA regular contribution if, with respect to any month, you:
- Are covered under a high-deductible health plan (HDHP);
- Are not covered by other health insurance (does not apply to specific injury insurance and accident, disability, dental care, vision care, long term care);
- Are not entitled to benefits under Medicare, and;
- May not be claimed as a dependent on another individual’s tax return.
Minimum to open: $25
Account set-up fee: None
Fees: $2 per Quarter if below $200 ADB
Interest Rate: Accrues daily on the actual collected balance of $1,000 and above. Pays quarterly at rates.
What is a HDHP?
A HDHP is a plan with an annual deductible of at least $1,250 for individual coverage or $2,500 for family coverage. These amounts are subject to cost-of-living adjustments COLA’s.
Are there other requirements for the HDHP?
Yes. For HSA purposes, the HDHP must limit out-of-pocket expenses. The maximum out-of pocket expenses, which include money applied to your deductible and your coinsurance for covered charges, must be no more than $6,350 of individual coverage and no more than $12,700 for family coverage. The amounts are subject to COLA’s.
Who can contribute to my HSA?
If you meet the eligibility requirements for a HSA, you, your employer, and your family members may contribute to your HSA. This is true whether you are self-employed or unemployed.
How much can I contribute to my HSA?
The maximum annual contribution amount is generally the lesser of 100% of the annual deductible under the HDHP or a specified amount. For 2015 the specified amount is $3,300 for individual coverage and $6,550 for family coverage.
When is the contribution deadline for funding a HSA?
Regular and catch up HSA contributions can be made at any time for a taxable year up to and including your federal tax return due date, excluding extensions, for that taxable year. The due date for most taxpayers is April 15 (or IRS tax deadline date).