Thinking about contributing to a Health Savings Account (HSA)? Get a full understanding of its benefits before you begin.

Who Qualifies for an HSA?

• Must be covered under a high deductible health plan on the first day of the month
• Cannot be enrolled in Medicare
• Cannot be claimed as a dependant on another tax return
• Cannot have any other health coverage except
  • Prescription drug plans
  • Limited purpose FSA or HRA
  • Suspended HRA
  • Post- deductible health FSA or HRA
  • Retirement HRA

What are the Tax Benefits?

• They are tax-exempt trust or custodial account
• Receive a tax deduction for contributions made even if you are not itemizing
• Contributions made by employer may be excluded from gross income
• Interest or other earnings in the account are tax free
• Distributions may be tax free if they are qualified medical expenses

What are Qualified Medical Expenses?

• Normal medical or dental expenses
• Drugs are considered qualified if they are prescribed, over the counter that are prescribed, and insulin
• Only in specific circumstances are insurance premiums counted

Other Benefits

• Contributions remain in your account until they are used
• They are “portable”- stays with you if you change employers or leave the work force
• Can be established by self-employed or unemployed
• At age 55 or older an additional $1,000 is added to the contribution limit