FAQs about Health Savings Accounts (HSA)
I heard that FSAs are limited to $2,650 for 2018; does that rule apply to HSAs?
No. The IRS limits Flexible Spending Accounts (FSAs) contributions to $2,650 starting in 2018, but that does not apply to HSAs. Check out a sample information packet here.
What happens to my HSA balance in the case where I can no longer contribute new money?
You can continue to use any amounts in your HSA for eligible medical expenses or save it for later even if you are no longer eligible to contribute more to your HSA. This is important to know in case you do change plans to a non-HSA eligible plan to comply with the new law. The HSA remains one of the best tax favored options available. One good strategy is to accumulate assets now in the HSA to prepare for whatever happens.
Can you coordinate an HSA with a cafeteria plan?
Yes. Under certain limited circumstances it is possible for employees to fund an HSA in addition to a health FSA. Integration of these plans must be carefully constructed so that the benefits being reimbursed under the health FSA are limited to benefits not paid by the high deductible plan. For example, it would be possible to have an vision and dental FSA, as long as the high deductible plan does not cover vision or dental benefits. However, this is a plan design that must be offered by your Employer.
If I lose my job, what happens to my HSA?
Your HSA belongs to you regardless of your employment. If you lose your job and elect to retain your HDHP under COBRA you may even pay the COBRA premiums from your HSA.
Who is eligible to open an HSA?
Anyone, individuals, employees and employers, can open an HSA but you must have a qualified high deductible health policy. An HSA can be established for any individual that meets all of the following:
- is covered by a HSA qualified high deductible health plan
- is not covered by another health plan
- is not eligible to be claimed as a dependent on another person’s tax return
- is not entitled to Medicare benefits
My spouse has a health policy through her employer, am I eligible?
If your spouse has an individual policy and no other insurance and you are otherwise qualified (see above), you are eligible to have an HSA. However, if your spouse participates in an FSA you would not be eligible for an HSA if your spouse can use the FSA for your general health expenses. This is because you are not eligible for an HSA if you are covered by “other insurance”. Even though you are not covered by your spouse’s health insurance, the IRS has determined that your spouse’s FSA is considered “other insurance” thus rendering you ineligible for an HSA. An exception to this rule exists for limited purpose FSAs (those that cover vision and dental expenses only) and you would be eligible for an HSA if your spouse had a limited purpose FSA.
Will my account be protected?
An HSA is a trust or custodial account that can hold many different types of assets; including, both FDIC insured investments and others. If your money in your HSA is placed into an FDIC insured deposit account, an FDIC checking account for instance, then it will enjoy FDIC insurance.
What if I don’t have a high deductible health insurance policy?
Before you can open a Health Savings Account, you must first be insured with a qualified High Deductible Health Plan (HDHP).
How much can I contribute to my HSA?
The guidelines for contribution maximums are shown below:
Self-only coverage $3,450 $3,500
Family coverage $6,900 $7,000
Do I need to fund my entire HSA all at once or can I fund it over time?
You can fund your account over time or all at once. Also, one of the large benefits for employees is that contributions can be tax free (an individuals’ contributions are made on a pre-tax basis) if offered as a part of your Employer’s cafeteria plan. Find more information here.
What can I spend my HSA funds on?
In general, you can use your HSA funds to pay for any qualified medical expense for you, your spouse, and your tax dependents. Qualified medical expenses is a defined term created by the IRS and includes: medical care, prescription drugs, and payment for long term care.
What documentation is needed to open an account?
To be in compliance with the USA Patriot Act, TaxSaver must provide certain information to our HSA Bank Partner to open your HSA. This information is provided to TaxSaver Plan by your Employer, via a secure eligibility file process. If the information provided to our HSA Bank Partner does not match the information that they pull from their resources of public data, Bancorp and / or TaxSaver Plan will contact you to provide additional information to Bancorp to verify your identity. This is for your protection as well as a government requirement when opening any bank account. Therefore, you may be asked to provide additional information and documentation before your account can be established.
The additional information requested may be any one or combination of the following:
- copy of your current driver’s license
- current government issued passport
- IRS Form W-2
- Social Security Card
- a current utility bill showing your address
My debit card number is not being recognized during the account registration process on the HSA website www.mywealthcareonline.com?
If you received two cards as part of your welcome packet, please input the other card number. If you still experience an issue completing your registration, please contact us at 800-328-4337.
When can I begin using my HSA to pay eligible expenses?
As soon as your account is opened and there is money in it, you can use the account for eligible expenses incurred any time after your account opening date. Expenses incurred prior to your account opening date are ineligible for reimbursement from your HSA.
Is there a required minimum deductible to qualify?
For 2015 and 2016, the minimum annual deductible for self-only HDHP coverage is $1,300. The minimum annual deductible for family HDHP coverage is $2,600.
Is there an out-of-pocket maximum?
The 2016 maximum limit on out-of-pocket expenses (including items such as deductibles, copayments, and coinsurance, but not premiums) for self-only HDHP coverage is $6,550 (a $100 increase from 2015), and the limit for family HDHP coverage is $13,100 (a $200 increase from 2015).
How can I avoid any monthly bank fees for having paper statements issued from my HSA account?
To manage your monthly bank statement options, you may log into your account and select the desired option under the ‘My HSA’ tab. Usually opting for electronic statements will prevent a fee.