Health Savings Accounts

Why should I want an HSA?

The U.S. Federal Government wants to give you a big break on your income taxes if you pay for today’s health care out of an HSA or if you save now for health care costs later. The amount you save is equal to your tax bracket rate.  A $10 co-pay paid out of your HSA could have required you to earn $15 if paid by cash or regular check.

Am I eligible to have an HSA?

You are likely eligible if your health insurance has a deductible of at least $1,200 individual or $2,400 family. For complete rules see IRS pub. #969 *.

How is a consumer-directed plan with an HSA different from a regular HMO or PPO plan?

The coverage may not be different at all. Once you have paid the deductible, comparable plans would both pay 80%, for example.

Is an HSA the same as a FSA (Flex Savings Account)?

An HSA is BETTER than an FSA. End-of-year balances are not lost in an HSA and they carry over to the next year until you die (when they go to your beneficiary or estate). An HSA belongs to you, not your employer.

How can I get my money out of my HSA?

Your pre-tax HSA funds may always be used for qualified medical and prescription expenses even if you change jobs or are no longer qualified to contribute to an HSA. If you die, HSA funds go to your beneficiary or estate. Like an IRA, HSA funds can be withdrawn and used for non-qualified expenses but you will pay a 20% penalty (10% if before 01/01/2011) and pay income taxes on the amount. However, if you wait until you are over 65 to use it, you will NOT pay that penalty.

For more tax rules concerning Health Savings Accounts download IRS Publication 969*

Statement of Fees and Policies

*requires a pdf file reader to display and print.