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HSA Questions & Answers
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2011 Tax Year Contributions
*For anyone enrolled as an individual with no dependents: $3,050
*For anyone enrolled with one or more dependents: $6,150
How can I put money into my HSA?
- Pre‐tax through payroll deduction
- This can be set up thorough your Human Resources department.
- Personal deposits into your account with post tax dollars.
- Should you deposit any funds into your HSA in this fashion, you will be eligible to make a line item deduction on your taxes at the end of the fiscal year for the amount deposited post tax.
How can I spend the money in my HSA?
- The IRS publishes a list of items deemed “qualified medical expenses”. You are allowed to use your HSA to purchase any items on this list. The list is known as the IRS Publication 502 and can be found at (http://www.irs.gov/publications/p502/index.html)
What happens if I use the money in my HSA for a non‐IRS approved medical expense?
- If you misuse the funds you have placed in your HSA and are audited by the IRS you will be subject to pay earned income taxes on the misused funds as well as a 20% excise tax.
- It is your responsibility to maintain records/receipts detailing how the funds in your HSA have been spent.
What happens to the money in my HSA at the end of the year?
- Nothing, if you don’t spend the funds in your HSA by the end of the year the money will simply roll over into the next year. There is no limit set by the IRS as to how much you are allowed to accumulate in your HSA.
Does every dollar I spend out of my HSA go towards my health insurance deductible?
- No, only expenses incurred through your health insurance will be applied to your health insurance deductible. This will include items such as doctor’s visits, hospitalizations and prescriptions.
- Items such as dental work or prescription eye wear will not typically count towards your health insurance deductible.
What happens to the money in my HSA if I am no longer enrolled in a qualified HDHP health plan?
- You are only allowed to make deposits into an HSA so long as you are enrolled in a qualified HDHP health plan. If you are no longer enrolled in a qualified HDHP plan, you may no longer make contributions to your HSA, however any funds in your HSA are still yours to spend, tax free, on qualified medical expenses. You may not take the funds out of the account for non‐qualified medical expenses; in doing so you will be subject to taxes and a 20% excise penalty.
What happens to the money in my HSA when I retire?
- After retirement you may continue to use the funds in your HSA tax free on qualified medical expenses. You also may choose to remove the funds from your HSA for non‐qualified medical expenses. You will need to pay earned income taxes on the funds at that time, but you will no longer be subject to any excise penalties.
What happens to the money in my HSA if I die?
- When you open your HSA you will be required to list a beneficiary for your account. Upon your death the account will be assigned to your listed beneficiary. The beneficiary will be subject to the same IRS requirements regarding the use of the account that you are subject to.An Explanation of your Health Savings Account (HSA)
If you have any questions or need any additional information, please contact Mark Jackson.
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