| Frequently
Asked Questions (FAQ)
This
page should be used to help answer some of the most frequently
asked questions about Health Savings Accounts. If you have
any suggestions for this page please select the email address
at the bottom of the page and submit your suggestion by email.
Q.)
What is a Health
Savings Account (HSA)?
A.)
A Health Savings Account (HSA) is a tax-advantaged savings
account you can use to pay for qualified health expenses
for you and your family if you are covered under a high
deductible health plan.
Q.)
What is a high-deductible
health plan?
A.)
According to the IRS, a qualifying high-deductible
medical plan has a minimum
deductible of $1,200 for single coverage and $2,400
for family coverage with an in-network, out-of-pocket
maximum of $5,950 for single coverage and $11,900
for family coverage. Check your employee benefit
materials to see if your employer offers a qualifying
plan.
Q.)How
is the HSA tax-advantaged? Three Ways:
- The
money you contribute to your account may be pre-tax
or tax-deductible. (Speak with your tax advisor
or accountant.)
- The
money in your account accrues tax-free earnings.
- When
you use funds to pay for your deductible or qualified
health care expenses, those withdrawals are tax-free
as well.
Q.)
How does the HSA work?
A.)
Simple: You deposit funds in your account either through
a payroll deduction (pre-tax), or by mailing in a
check (post-tax). Then you may use that money to pay
for health care expenses below your insurance deductible,
as well as co-insurance requirements after your deductible
is met, and expenses not covered by your health plan.
Unused funds can be rolled over and saved for expenses
in future years.
Q.)
What happens if I don't use all the funds I've contributed
to my HSA over the course of the year?
A.)
Those funds simply roll over into the next year
. . . and future years. You do not lose your HSA
contributions; they just keep accumulating and earning
interest. And your money is ready whenever you need
it, today or in the future. You can even use your
HSA to save for your retirement health care costs.
That makes an HSA a powerful tax-advantaged savings
tool for your retirement years.
Q.)
What happens to my HSA if I leave my job?
A.)
Your HSA belongs to you. All funds contributed to
your HSA, including employer contributions, are
yours to keep. You can take your account with you,
intact. When you change jobs, you will choose to:
- Keep
your HSA;
- Transfer
your funds to another provider's HSA; or
- Transfer
your funds as a rollover to another qualifying
account within 60 days.
Q.)
Who can contribute to the HSA?
A.)
Both you and your employer may contribute to the
HSA. Other qualified family members may also contribute
to the account for you, as long as they meet IRS
guidelines. (Check your company health plan materials
to see if your employer offers employee contributions,
and for your plan's specific funding options.)
Q.)
Am I eligible for an HSA? Yes, if you:
- Currently
have (or switch to) a "high-deductible health
plan" that meets IRS requirements;
- Are
not covered by other health insurance (for example,
you are not a dependent on anyone else's plan,
except for vision or dental coverage);
- Are
not entitled to Medicare benefits nor enrolled
in Medicare or Medicaid; and
- Are
not claimed as a dependent on someone else's tax
return.
Q.)
How do I make deposits to my HSA?
A.)
There are multiple ways to contribute to your account:
- Payroll
Deduction . If your employer offers this
option, you can have a set amount deducted from
your paycheck to your credit union each pay period.
- Contribution
Form . When you open your HSA you will
receive a contribution form which you can use
to make a check contribution or indicate a rollover
from another qualified plan.
Q.)
When can I start using the funds in my HSA?
A.)
Immediately. You can use the funds as soon as they
are contributed and available. If your employer
matches some or all of your contributions, they
can determine their contribution schedule—annually,
monthly, weekly, etc. So check with your employer.
Q.)
How do I withdraw funds from my HSA?
A.)
You can withdraw funds using your HSA debit card
or by writing a check from your account. Note however,
First Service will not automatically liquidate investments,
make transfers or apply overdraft protection to
pay for medical expenses if you have an insufficient
balance in your HSA.
Q.)
What expenses qualify for reimbursement from my HSA?
A.)
You can receive tax-free reimbursement for qualified
health expenses as defined by Section 213(d) of
the Tax Code. A list of these expenses is available
on the IRS Web site, www.irs.gov
. HSA distributions used for any purpose other
than the qualified medical expenses listed will
be taxable, and appropriate tax rules will apply.
You should check with your tax advisor to determine
qualified reimbursements specific to your individual
needs.
Q.)
What if I need to use HSA funds for non-health-related
expenses?
A.)
If you use your HSA funds for non-qualified expenses,
the amount you withdraw will be taxable, and you'll
also be required to pay an additional 10 percent
tax penalty on the withdrawal amount. (First Service
is not responsible for determining qualified expenses.
Please speak with your accountant before making
a non-health-related withdrawal.)
Q.)
Will I receive HSA statements?
A.)
Yes. You will receive a regular monthly statement
tracking your account balance and activity. These
statements are available online when you register
for e-statements or mailed to your home.
Q.)
What fees are associated with an HSA?
A.)
There are no account set-up fees or monthly maintenance
fees for your HSA. Withdrawal fees for ATMs, Debit
Cards and cash apply, as well as standard checking
account fees. Please refer to your Truth
In Savings disclosure and fee schedule.
If you have questions, please contact a Member Service
Representative at 614/836-0100.
Q.)
How does this work with my income taxes?
A.)
At the end of the tax year, we will send you a Form
5498-SA summarizing all of your contributions, and
a Form 1099-SA which reports the total distributions
taken from your account for the year. We will send
these forms to the IRS as well. You should attach
these forms to your tax return and submit both when
you file. (Please consult with your tax advisor
and/or accountant before you file with the IRS.)
|
