How can hsa money be used

Then the individual's insurance will begin coverage. Unused money can stay in the account or be placed in an investment account that offers competitive interest rates, low fees, and a variety of options. You can open an HSA but you must have a corresponding qualified high deductible health plan. You may, but in order to qualify for an HSA you must be an eligible individual see above and have a qualified high-deductible health plan HDHP. A qualified HDHP is one that has specified minimum limits for the annual deductible and maximum limits for out-of-pocket expenses.

These are the limits. Click here to learn if you qualify for a HSA. If your spouse has an individual policy and no other insurance and you are otherwise qualified see above , you are eligible to have an HSA. Generally, no. You may both open an HSA however, the total amount that may be contributed to your HSAs is still the contribution limit.

Your HSA belongs to you regardless of your employment. You decide how much to contribute to your HSA, how to invest, and how to use the funds. No, if you have single coverage you are limited to the individual HSA contribution limit. You may use your HSA funds to pay for the qualified medical expenses of family members; however, the amount you may contribute to your HSA is limited by the level of your insurance coverage.

A simple method to do this is to send a check to HSA Bank. You can access the plan form on our website. This form will provide the Custodian Bank all the required information regarding your additional contribution. What is a catch-up contribution? Once you enroll in Medicare you may no longer contribute to your HSA. If this is your first year of coverage under a HDHP and you start mid-year, you can contribute up to the full applicable federal limit; including a full catch-up amount if between ages 55—65, so long as you start your HDHP coverage no later than December 1 of that year.

You can make your HSA contribution until your tax filing due date April 15 of the year following the tax year for most people. In general you can use your HSA funds to pay for any qualified medical expense. Qualified medical expenses are a defined term created by the IRS and include: medical care, prescription drugs, and payment for long term care. Generally, you cannot treat insurance premiums as qualified medical expenses unless the premiums are for:.

You can invest the funds in bank accounts, money markets, mutual funds, and stocks. Login to your account to see the available investments. Yes, the individual who establishes the HSA is required to maintain a record of the expenses sufficient to demonstrate that the distributions were for qualified medical expenses.

Yes, you may use your HSA to pay for the qualified medical expenses of any of your dependents so long as their expense is not otherwise reimbursed.

If an account beneficiary has attained age 65, premiums for Medicare Part D for the account beneficiary, the account beneficiary's spouse, or the account beneficiary's dependents are qualified medical expenses. No, there are no limits and the entire balance can be carried over from year to year. Once you reach age 65 your funds can be withdrawn at any time and are only subject to ordinary income tax. You will not lose any unspent money in your account.

Yes you can. Choose from a wide range of securities, including mutual funds, stocks, bonds and more. Visit our HSA Investment page to learn more. There are many benefits to your HSA that you should consider before closing your account.

Consider keeping your HSA to continue to save for your future health expenses, tax free. If you still feel a need to close your account, please call our Client Assistance Center at Your HSA funds are never lost due to changes in employment or health plan. If at some point you are no longer covered by an HDHP, you still have access to your funds and can use them to pay for IRS-qualified medical expenses; however you are simply no longer eligible to make contributions.

While it is a free download, you should check with your wireless provider for any associated fees for accessing the Internet from your device. As stated in the previous FAQ, if you have not already done so, you must be registered on the Member Website to use the mobile banking services. You may receive both a SA and SA from us. Flexible Spending Accounts FSAs are tax-advantaged financial accounts that can be set-up through employers' cafeteria plans in the United States. An FSA allows an employee to designate a portion of his or her pre-tax earnings to pay for qualified expenses as established in the cafeteria plan, most commonly for medical expenses, but often for dependent care or other expenditures.

The employer is also allowed to make contributions to employee FSAs, if desired, in order to offer a greater benefit to the staff. Enrolling in an FSA allows you to set aside pretax money from your paycheck. You will enjoy a tax savings on the money you can use for eligible health care expenses. With an FSA, you elect to have your annual contribution deducted from your paycheck each pay period, in equal installments throughout the year, until you reach the yearly maximum that you have specified.

The amount of your pay that goes into an FSA will not count as taxable income, so you will have immediate tax savings. FSA dollars can be used during the plan year to pay for qualified expenses and services.

Annual participant contributions are limited by The Internal Revenue Service. A Healthcare FSA allows reimbursement of qualifying out-of-pocket medical expenses. Common eligible expenses include dental treatment, orthodontia, prescription drugs, diagnostic services, hospital services and surgery, laboratory fees, obstetrical expenses, chiropractic care, physical therapy, eye examinations, glasses, contact lenses, laser eye surgery, hearing aids, smoking cessation programs, and weight loss programs to treat obesity, to name a few.

A limited FSA only allows reimbursement for preventive care, vision and dental expenses. A Dependent Care FSA allows reimbursement of dependent care expenses, such as daycare, incurred by eligible dependents. All eligible out-of-pocket expenses incurred by you, your spouse and your qualified dependents can be reimbursed from your Healthcare FSA, even if your spouse and qualified dependents are not enrolled in your employer's health plan. Requests for reimbursements should be submitted prior to the end of your employer's run-out period or period of time for which a claim for an expense can be submitted for a plan year that has ended or after an employee has terminated.

Health Reimbursement Arrangements HRAs are employer-funded plans that reimburse employees for incurred medical expenses that are not covered by the company's standard insurance plan. Because the employer funds the plan, any distributions are considered tax deductible to the employer. Reimbursement dollars received by the employee are generally tax-free. Unused HRA dollars may roll over from year to year, if allowed per plan rules, providing a potential incentive for employees to be better stewards of healthcare spending.

If employment is terminated, the employer can choose to keep unused funds. Your employer funds your HRA pre-tax. Because the money allocated by your employer doesn't count as income, there are no tax implications.

It's kind of like getting a raise. Participating in an HRA is a great way to stretch your healthcare budget. An HRA usually sits alongside a health plan with higher deductible, coinsurance and copayment minimums; often these health plans have lower monthly medical premiums allowing you to save money. Some employers allow you to rollover and accumulate unused funds year after year. The more you save in your HRA, the more funds you will have to pay eligible medical expenses when they occur.

An employer may also make the HRA portable so that you can take the funds with you when your employment ends or when you retire. HRA funds must be used for healthcare expenditures only. Approved healthcare expenditures include those expenses identified by your employer as reimbursable from the HRA that are described as Medical Expenses in Section d of the IRS code. These expenses may include deductibles, coinsurance, copayments, prescription drugs, vision care and dental care.

Your employer may limit the expenses your plan reimburses; please consult with your Human Resources department for more information on what expenses are covered by your HRA. The IRS has a list of approved healthcare expenditures. However, your employer might have additional limitations. Examples of expenses that are not eligible for reimbursement include:. Medical expenses that do not meet IRS section d requirements e. Medical expenses incurred by you, your spouse or any eligible dependents prior to your effective date in the plan; and, Medical expenses that can be reimbursed to you through any other source such as group health insurance.

HRAs are only funded by your employer. Your employer contributes a determined amount to your HRA. Contact your HR department for specifics on your plan setup. Summer essentials? All HSA-eligible! More: Millions of people take a daily aspirin for heart health.

They might not need to. For people who don't generally get sick or spend a lot on medical expenses, an HSA can still prove beneficial. If necessary, you can withdraw money from your HSA for non-medical things, but Hogan doesn't recommend it. If you use your HSA to pay rent or get a new dye job, you will end up being taxed.

To prevent yourself from needing to pull money out of your HSA for non-medical expenses, Hogan suggests having three to six months' worth of living expenses saved up. Facebook Twitter Email. You can use your HSA account for a lot more than you think. Show Caption. Hide Caption.