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What is an HSA?

A Health Savings Account (HSA) helps you save money to pay for future health care expenses and save on your tax bill, too. Your employer may offer a payroll option that lets you fund your account with pre-tax dollars, or you can contribute to your HSA from your own bank account (up to the annual maximum allowed) and qualify for a deduction on your tax return. For example, if you make $35,000 and contribute $2,000, your taxable income is reduced to $33,000. Plus, you won’t pay any taxes on the interest you earn from your HSA or the money you use to pay for health care expenses.

Who can open an HSA?

If you are enrolled in a Qualified High-Deductible Health Plan (QHDHP), you are eligible to open an HSA. As defined by the Internal Revenue Code, QHDHPs have higher annual deductibles than typical health plans, so HSAs are tax-favored savings vehicles that allow you to save money for possible future expenses that are subject to a higher deductible.

These accounts also have maximum contribution limits that correspond to the annual deductible dollar limit for QHDHPs (as revised annually by the IRS).

Members enrolled in a QHDHP are not eligible to open an HSA if:

  • They are covered by any health plan other than a QHDHP (such as a PPO, HMO, or health care FSA). Stand-alone dental and vision plans are not included in this restriction.
  • They are enrolled in Medicare
  • They are claimed as a dependent on another individual's tax return
  • Their identity cannot be verified by the bank (as custodian of the HSA)

Note: Federal regulations require that HSA custodian banks complete security checks to verify every new account holder's name, residential mailing address, date of birth and social security number. Some banks require that new account holders have a valid U.S. residential address and Social Security Number to open an HSA. If the bank has any questions, it will send a letter to the prospective account holder and ask for information to verify their status. The account holder must confirm his or her status as a U.S. citizen, green card holder or U.S. resident with a valid U.S. residential address. If the security check cannot be completed satisfactorily, the bank will not open an HSA for this person.

How can I use the money?

The Internal Revenue Code determines how HSA funds can be used. Approved expenses include prescription, medical, dental and vision products or services performed by medical professionals to diagnose, treat or prevent diseases for you and your family. Read the list of eligible expenses.

Are there things I can’t use the money for?

Services or purchases that are good for your general health are not considered qualified medical expenses. You also can’t use your HSA to pay for general expenses, such as cosmetic surgery, over-the-counter medications (unless your doctor gives you a prescription) or for expenses for which you’ve already been reimbursed.

How do I pay health expenses from my HSA?

  1. You can use the Visa® debit card that comes with your HSA at most pharmacies and doctors’ offices—typically anywhere Visa is accepted—giving you direct access to your HSA funds.
  2. You can pay your provider directly from the website—saving you time and the inconvenience of sending a check.
  3. You can customize your account so claims are paid automatically—eliminating the need to enter each claim separately.
  4. You can pay yourself back from your HSA if you’ve paid for eligible services out of your own pocket—giving you control over how, and when, to use your HSA.

Can I get more than one debit card?

You can have up to four debit cards on your account. Your first debit card will be mailed to you automatically. If you’d like additional debit cards, you can request up to three more for you and your family at no additional charge.

When can I start using my HSA?

You can start as soon as your HSA is open and funds are deposited. After your HSA is open and active, you’ll receive an HSA Welcome Kit that will provide your account number and detailed information on managing your HSA. Your debit card will come separately in a plain white envelope.

Where is the money in my HSA held?

All of your contributions will be deposited into an FDIC-insured, interest-bearing bank account. From this account, you can choose to move funds into different investment options. Look online for monthly statements detailing your deposits.

Who can deposit money?

Anyone can contribute to your account as long as you are actively enrolled in a Qualified High-Deductible Health Plan. You can make contributions via payroll deductions if this option is offered by your employer or through your own direct payments to the account.

How do I deposit money into my account?

  1. If you sign up for HSA payroll deduction through your employer, the amount you choose will be deposited into your HSA on a pre-tax basis each pay period.
  2. If you open your HSA for an individual health plan, or if you want to add additional funds, you can make a contribution directly into your HSA and then claim a tax deduction for the contributions—even if you don’t itemize your deductions on IRS Form 1040.
  3. Use your member website on the Spending tab to transfer money electronically from your personal checking or savings account.
  4. Or mail a check along with the Health Savings Account Contribution Form that was included in your HSA Welcome Kit.

Are there limits to how much I can deposit?

Yes. The Internal Revenue Code sets guidelines for the maximum contributions allowed each calendar year. And if you’re 55 or older, you can contribute an extra amount each year; this is called a “catch-up” deposit.

Will I get an account statement?

If you are submitting claims to your account, you’ll receive a periodic Plan Activity Statement that combines information from both your health plan and your HSA. You can also go online to the member website at any time to check your account balance and to view your monthly “cash” account statements (your HSA dollars that are not invested in mutual funds) as well as your quarterly investment statements.

What happens to my money if I leave my job or change my insurance?

Don’t worry—the money in your HSA is yours to keep. If you don’t spend all of it in a calendar year, the balance simply rolls over into the next year. Plus, your HSA money is portable—it goes where you go, even if you change jobs.

What happens if I switch plans or no longer have a Qualified High-Deductible Health Plan?

If you leave your Qualified High-Deductible Health Plan (QHDHP) or end your medical coverage with us, your HSA may no longer be connected to your health care coverage; it is now a “stand-alone” HSA. You will keep your same account number, but you will get new debit cards. You may be charged a small monthly fee of $4.50 because your HSA is not supported by your employer.

You will keep your current HSA custodian, and you can use the money in your HSA for eligible expenses. You can log in and manage your HSA on the member website, without registering again.   
Only those members who remain in a QHDHP (with coverage from any carrier) can still make contributions to their stand-alone HSA.





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