HSA

Health Savings Accounts are designed to compliment high deductible group and individual insurance policies.  Consumers often choose high deductible insurance policies in exchange for lower monthly premiums. The amount saved each month can be contributed on a tax deductible basis to a health savings account (HSA) plan.  Monies can be withdrawn from the account tax free to pay for qualified medical expenses. We work with the leading HSA qualified providers including Aetna, Anthem Blue Cross and Blue Shield, Golden Rule, Humana, Kaiser Permanente, Medical Mutual, Summacare, United Health Care. On our site, you can search the most popular and affordable carriers to obtain a competitive individual or family HSA quote.

HSA Taxation and Investment Options

Dollars contributed into a HSA by an individual or an employer are considered pre-tax by the I.R.S. In this way, a Health savings account works much like an Individual Retirement Account. The contributions to a HSA are tax deductible and grow tax deferred.  Unlike an IRA, monies can be withdrawn from your HSA tax free for qualified medical expenses.

A money market account can be used to safely harbor your contributions until they are later spent. (In addition, many plans offer mutual funds as an investment option to potentially increase your deposits.) You are not taxed on any interest or fund appreciation in the account as long as funds are used for qualified expenses.

Unused dollars in a HSA plan rollover year to year while the account value increases through tax deferred earned interest or investment growth. The plans are portable, meaning the contributions are not lost should coverage be discontinued with the insurance company. You own all deposits and can name a beneficiary for the accumulated value at passing.

Closing a Health Savings Account

Should you later cancel your health insurance or no longer need a HSA plan, the accumulated funds can be withdrawn. All funds that have not been spent on qualified medical expenses would then be taxed as ordinary income. There would be no penalties however for closing your account and withdrawing all funds.

If funds still remain in your account at age 65, you would also be required to close the account if you no longer owned a HSA qualified health insurance plan. (Once age 65 is reached most consumers discontinue their health insurance plans, opt into Medicare and purchase a Medicare Supplement.)

Yearly HSA Eligibility and Contribution Limits

There are only a few criteria that must be met in order to participate in a HSA. Namely, individuals or employees must be enrolled in a qualified high deductible health insurance plan.

An annual deductible of at least $1,350 for an individual policy or $2,700 for a family plan must be selected.  Yearly contribution maximums for 2018 are $3,500 for individuals and $6,900 for families.

Other Contribution Methods and Maintenance

Recently passed legislation allows for lump sum contributions by account holders up to the above listed maximums. Deposits are no longer limited by the insurance deductible selected. Additionally, consumers may transfer tax deferred dollars from a qualified plan like an IRA (Individual Retirement Account) in order to immediately fund an HSA. Employer plans will allow account owners a one time transfer from a FSA or HRA plan.

Health Savings Accounts are designed to be easily maintained and operated. HSA specific websites are setup by the insurance providers so that account holders can manage their deposits and expenditures online. In addition, many insurance companies issue checkbooks and/or credit cards to the insured that draw directly from the account.