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Health Savings Account - Frequently Asked Questions
- Who is eligible for an HSA?
- How can I contribute to my
HSA?
- What expenses can I pay for with
my HSA?
- Can I use my HSA to pay
for non-health-related expenses?
- Is there a minimum reimbursement
amount I can request from my HSA?
- Can the unused funds in my
HSA be rolled over each year?
- Does the money in my HSA earn interest?
- What happens to my HSA if I leave my
health plan or job?
- What is the difference between
an HSA and a Health Care Flexible Spending Account (HCFSA)?
1. Who is eligible for an HSA?
You must participate in a High Deductible Health Plan, have no other
insurance coverage other than those specifically allowed, and not
be claimed as a dependent on someone else’s tax return in order to
be eligible for an HSA. Some examples of other coverage that would
cause ineligibility are: a flexible spending account * (FSA), a spouse’s
FSA, a spouse’s HMO, other non-high deductible health insurance coverage,
TRICARE, Medicare, or receipt of VA benefits within the previous three
months. You can still have other disability, dental, vision and long-term
care insurance policies.
* Limited FSA uses are allowed.
2. How can I contribute to
my HSA?
You may contribute your own money to your account by making a lump
sum contribution or periodic payments at any time, in any amount up
to a maximum limit, generally the HDHP plan’s deductible. You can
claim your total amount contributed for the year as a tax deduction
when you file your income taxes. You receive tax advantages in any
case. You have until April 15 of the following year to make HSA contributions
for the prior year. If you are over age 55, you can make additional
catch-up contributions. Visit the IRS website at www.irs.gov or call
800-829-3676 for details.
3. What expenses can I pay for
with my HSA?
Your HSA can be used to pay for “qualified medical expenses,” as defined
by IRS Code 213(d). These expenses include, but are not limited to,
medical plan deductibles, diagnostic services covered by your plan,
long-term care premiums, and health insurance premiums if you are
receiving federal unemployment compensation, over-the-counter drugs,
LASIK surgery and some nursing services.
For your convenience, the Bank of Geneva provides you with an HSA
Debit Card which may be used to make your HSA related purchase. Purchase
amounts are automatically deducted from your HSA account. (There is
a $1,000.00 limit per day at point-of-sale.)
When you become Medicare enrolled, you can use the account to purchase
any health insurance other than a Medigap policy. However, you may
not continue to make contributions to your HSA once you are Medicare
enrolled.
For the complete list of IRS-allowable expenses, you can request a
copy of IRS Publication 502 by calling 800-829-3676, or visit the
IRS website at www.irs.gov.
4. Can I use my HSA to pay
for non-health-related expenses?
Yes. You may withdraw money from your HSA for items other than qualified
health expenses, but it will be subject to income tax and if you are
under 65 years old, an additional 10 percent tax penalty on the amount
withdrawn.
5. Is there a minimum reimbursement
amount I can request from my HSA?
No, there is not a minimum reimbursement amount with our product.
You may use your HSA Debit Card for any amount up to the daily limit
($1,000.00) * or you may request a reimbursement for any amount.
6. Can the unused funds in
my HSA be rolled over each year?
Yes. Your funds will accumulate without a maximum cap.
7. Does the money in my HSA earn interest?
Yes, your HSA funds earn interest compounded quarterly.
8. What happens to my HSA if I leave
my health plan or job?
You own your account, so you keep your HSA, even if you change health
plans. If you no longer are enrolled in a HDHP, you are not eligible
to make payments to your HSA, but you may request withdrawals for
qualified medical expenses.
9. What is the difference
between an HSA and a Health Care Flexible Spending Account (HCFSA)?
It seems as though they serve the same purpose.
An HSA is similar to a HCFSA in that it is funded with pre-tax dollars
that can be used for the same type of health care expenses. However,
HSAs are only available to employees who elect a HDHP while HCFSAs
are not restricted to any type of plan. You cannot have a HSA and
a HCFSA at the same time. HSA balances roll over from year to year
and continue to grow tax-free. HCFSA money is lost if you do not spend
it by the end of each year.
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The above information is provided with the understanding that Bank of Geneva is not engaged in rendering tax advice. For more detailed information, please refer to IRS Publication 502 titled “Medical and Dental Expenses”, Catalog Number 15002Q. Publications can be ordered from the IRS by calling 1-800-TAX-FORM (1-800-829-3676), or viewed, printed or downloaded in PDF format (Please refer to http://www.irs.gov/pub/irs-pdf/p502.pdf). If tax advice is
required, seek the services of a competent professional.
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