Frequently Asked Questions

We’ve answered some frequently asked questions about health savings accounts to help you understand your HSA better.

What is an HSA?

A health savings account (HSA) is an account you can put money into for future medical expenses.

Who can have an HSA?

HSAs are easy to open, easy to use and easy to maintain. You can open an HSA through your employer or on your own. It only takes a few minutes. Make sure to have the following information handy:

  • Have coverage under an HSA-qualified high-deductible health plan (HDHP).
  • Have no other medical coverage.
  • Are not enrolled in Medicare.
  • Cannot be claimed as a dependent on someone else’s tax return.
How do I know if my health plan is a “qualifying” high-deductible health plan (HDHP)?

HSAs are easy to open, easy to use and easy to maintain. You can open an HSA through your employer or on your own. It only takes a few minutes. Make sure to have the following information handy:

  • Your insurer or employer can verify the status of coverage.
  • The words “qualifying (or qualified) high-deductible health plan” or a reference to IRC (Internal Revenue Code) Section 223 will be included in the declaration page of your policy or in another official communication from the insurance company.
  • The minimum annual deductible for 2017 cannot be less than $1,300 for individual coverage or $2,600 for family coverage. For 2018 plans, the minimum annual deductible cannot be less than $1,350 for individuals and $2,700 for families.
  • The maximum out-of-pocket expenses for 2017 are capped at $6,550 for individuals and $13,100 for families. In 2018, the maximum out-of-pocket expenses are capped at $6,650 for individuals and $13,300 for families.
Who can contribute to my HSA?

Contributions to an HSA can be made by you, your employer, a family member or practically anyone else.

Are there restrictions on contributions?
  • The total contributions cannot exceed the IRS limits: $3,450 for individuals and $6,900 for families.
  • Contributions to the account must stop once you are enrolled in Medicare.
  • Contributions to the account must stop once you are no longer enrolled in an HDHP.
  • Contributions to the account must stop once you are enrolled in another health plan.
Are my contributions tax-deductible?

Your contributions are tax-deductible, even if you do not itemize deductions.

Is there a deadline for me to use my HSA funds?

No. The account is yours and unused funds will roll over year after year. Even if you change jobs or health plans, you can still use the funds in your HSA to pay medical expenses. When you retire, you can keep the money in your account and use it to pay for medical expenses tax-free.

How do I pay medical bills before my HSA is funded?

Ask your medical provider about available payment options.

Pay with alternate funds and reimburse yourself when your HSA is funded.

  • HSA regulations allow a one-time transfer from an IRA or a one-time rollover from an HRA or FSA. Contact your tax advisor.
Can I reimburse myself for old medical bills?

You can only reimburse yourself for bills you incurred after your HSA was opened.

Can I contribute if I no longer participate in an HDHP or I participate in Medicare?

No. You nor anyone else are allowed to make contributions to your HSA if you leave your HDHP or when you become enrolled in Medicare or another medical insurance plan. However, you can continue to use your HSA to pay medical expenses.

How can I make contributions to my HSA?

Employees and employers can use the following methods to make contributions to HSAs:

  • Direct deposit
  • Online banking
  • Check
Can I invest my HSA funds?

Yes, once your account reaches a $1,000 balance you will have the option to enroll in a self-directed investment portal within your online account. View the investment options here.

How are HSAs different from healthcare flexible spending accounts (FSAs)?

Both HSAs and FSAs allow you to pay for qualified medical expenses with pre-tax dollars. Unlike FSAs, HSA balances can roll over from year to year.

Can my spouse and I have a joint HSA, like our regular checking account?

No, only one person can be named the account owner. If both you and your spouse have qualified HDHP coverage, you must each have your own account.

Can I have more than one HSA?

Yes, you can have more than one HSA and you can contribute to them all, as long as you are currently enrolled in an HDHP. However, this does not give you any additional tax advantages, as the total contributions to your accounts cannot exceed the annual maximum contribution limit.

My spouse’s employer provides low-deductible family coverage at no cost. I am covered under my spouse’s plan. If I enroll in my employer’s qualified HDHP, am I eligible for an HSA?

No. Even though you are covered by an HDHP, since you are also covered by a low-deductible plan too, you are not eligible for an HSA. Individuals covered by an HDHP only can contribute to an HSA.

How do Veteran’s Administration (VA) health benefits affect the HSA?

If the employee has received VA health benefits in the past three months, he/she cannot open an HSA.

Can we set up an HSA for a minor dependent?

No. A dependent may not participate in an HSA.

Can I contribute stock to my HSA?

No. Only cash can be contributed to your HSA. Check with your financial institution to determine if this is an option.

Does how much I contribute to my IRA limit how much I can contribute to my HSA?

No. Your contributions to your HSA are limited to a maximum annual contribution adjusted each year by the IRS. Your contributions to an IRA have no bearing on your HSA and vice versa.

What happens to my HSA if I become disabled?

If you become disabled and enroll in Medicare, contributions to your HSA must stop. You may use your HSA funds to pay Medicare Part A and/or B premiums. Payment of these Medicare premiums is a qualified expense and a tax-free distribution. Distributions from your HSA used for non-qualified expenses will be subject to ordinary income tax but exempt from the 20 percent penalty.

What happens to my HSA when I die?

Your HSA is an inheritable account. You name the beneficiaries.

What tax forms will I receive to include with my annual tax filings?
  • Form 5498-SA notifies the IRS of contributions made to your HSA during the tax year.
  • Form 1099-SA notifies the IRS of distributions made from your HSA during the tax year.
  • The institution holding your account will send the appropriate year-end form(s) to you with instructions regarding the forms’ use and requirements for filing your annual tax return.


Forms