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HSA Overview

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So you want to know more about Health Savings Accounts (HSAs)?

An HSA is a tax-advantaged benefit account for people enrolled in a high-deductible health plan (HDHP). Account owners make pre-tax contributions each payday (or post-tax, which can be deducted on tax returns) to their HSA in order to pay for IRS-approved eligible expenses for themselves and their dependents.

HSAs Offer a Triple Tax Advantage

  • Contributions are tax-free (or tax-deductible)
  • Withdrawals for qualified expenses are tax-free
  • Account funds grow tax-free, with interest or investment returns
 

2017 and 2018 Annual Contribution Limits

  • Participants with individual coverage: 2017 – $3,400; 2018 – $3,450
  • Participants with family coverage: 2017 – $6,750; 2018 – $6,850
  • The IRS recently published 2018 HSA regulations for contribution limits, annual deductibles, and out-of-pocket expenses. Learn more about 2018 HSA regulations.
 

Additional HSA Benefits include:

  • You own the account! If your employment status changes for whatever reason, you keep the account forever and can continue using the funds.
  • The unused balance in your account rolls over to the following year. There is NO “use it or lose it” rule!
  • Invest your HSA funds once the account balance reaches your administrator’s minimum threshold in order to grow your funds quickly.
  • In the year you turn age 55, you can contribute an additional $1,000 over the annual limit. These are known as “catch up contributions.”
  • Use your funds as a retirement account.  Starting at age 65, any withdrawals for non-qualified expenses are taxed as regular income.
 

Need to Know!

  • You can only use the current balance in the account
  • You may file a claim for an eligible expense at any time, so long as the expense occurred after the HSA was established
  • If you are under age 65 and withdraw HSA funds for use on unapproved expenses, you will be penalized 20 percent in addition to having to file the withdrawal as income on your annual tax return
 

Eligible Expenses

Visit the IRS webpage for a list of eligible medical expenses. Contact your Benefits Representative for more details.

 

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