HSA Guidelines
Below are some basic rules and regulations that apply to Health Savings Accounts (HSA). More detailed information is available through HSA Manager or by calling our HSA Client Service team at 800.783.4022.
Eligibility
To open an HSA, an individual must have a qualified High Deductible Health Plan (HDHP). HDHPs have specific characteristics including minimum deductibles and maximum out-of-pocket limits.
In 2012, any individual is eligible to contribute to an HSA who:
- Is covered by a qualified HDHP on the first day of the month
A qualified HDHP:
° Must satisfy annual deductible and out-of-pocket requirements as follows:
° Single Coverage:
• Annual deductible must be at least $1,200
• Out-of-pocket expenses cannot exceed $6,050
° Family Coverage:
• Annual deductible must be at least $2,400
• Out-of-pocket expenses cannot exceed $12,100
- Is not covered by another non-HDHP
- Is not enrolled in Medicare
- Cannot be claimed as a dependent on another individual’s tax return
Note: No income or employment requirements on who may contribute to an HSA.
Qualified Medical Expenses
You can use the money in your HSA to pay for any qualified medical expense permitted under federal tax law. This includes most medical care and services, dental and vision care. For a detailed list of eligible medical expenses, please refer to IRS Publication 502.
Distributions/Withdrawals
Account holders may take tax-free distributions for:
- Qualified medical expenses
- Long-term care insurance and premiums (see IRS Publication 502 for requirements)
- COBRA coverage
- Medicare expenses (not Medigap)
- Retiree health expenses for ages 65 and older
The HSA is completely separate from the High Deductible Health Plan (HDHP). You can use the HSA funds tax-free for any medical expense under section 213(d) of the Internal Revenue Code, except for health insurance premiums.
The easiest way to access the HSA funds in your account is by using your My Care Card. If, for some reason, you need to contact us directly to withdraw funds, click here for further instructions and our HSA withdrawal form.
Federal Tax Resources
Health Savings Accounts provide several tax advantages.
Employee/Individual:
Employer:
- Contributions are tax deductible
IRS Form 1099-SA. This form provides you with the distributions that were made from the HSA during the calendar year beginning January 1st through December 31st. The custodian will forward it to the IRS and send a copy to you no later than January 31st of the following year for the previous year's contribution. The 1099-SA distribution information should be reported on Form 8889 or Form 8853 as indicated.
IRS Form 5498-SA. This form provides you with the contributions that were made to the HSA. The custodian will forward it to the IRS and send a copy to you no later than May 31st of the following year for the previous year's contribution. Contributions for a specified year can be deposited from January 1st through April 15th of the following year.
Click here for instructions on IRS Forms 1099-SA and 5498-SA.
Federal Tax Filing Forms. You can download the IRS Form 8889 along with the instructions for filling out the form at the IRS website www.irs.gov.
State Tax Requirements
Go to the IRS website for further details regarding state income tax treatment for HSAs.