Health
Savings Accounts (HSA)
Health Savings Accounts
(HSAs) were created by the Medicare bill signed by President Bush in 2003 and
are designed to help individuals save for future qualified medical and retiree
health expenses on a tax-free basis.
What is a Health Savings Account (“HSA”)?
A Health Savings Account is an alternative to traditional health insurance;
it is a savings product that offers a different way for consumers to pay for
their health care. HSAs enable you to pay for current health expenses and save
for future qualified medical and retiree health expenses on a tax-free basis.
Learn about Health Savings Accounts
You must be covered by a High Deductible Health Plan (HDHP) to be able to
take advantage of HSAs. An HDHP generally costs less than what traditional health
care coverage costs, so the money that you save on insurance can therefore be
put into the Health Savings Account.
You own and you control the money in your HSA. Decisions on
how to spend the money are made by you without relying on a third party or a
health insurer.
SELCO's Health Savings Account (HSA) offers our members tax-advantage savings
accounts to be used for paying health care expenses not covered by health insurance.
The account allows anyone with qualifying high-deductible health plans (HDHP)
to establish and maintain an HSA. The program offers Single HSA for self-only
medical insurance coverage and Family HSA for individuals with family medical
insurance coverage.
Account Description
- Tax-advantaged custodial or trust accounts
established with a written agreement
- Used to accumulate savings to pay for health
care expenses
- Operate much like an IRA
- Used in conjunction with a High Deductible Health Plan (HDHP)
HSA Account Benefits
Protection – You will
have an opportunity to save money to pay high or unexpected medical bills. Affordability – High
health insurance policy deductibles mean lower premiums.
Savings – Your ability to deduct your
contributions and the tax deferral of account earnings enable you to build your
account.
Flexibility – You can contribute at any time during the
year, and your HSA balance rolls over from year to year.
Portability – You own the account, so it goes where you go,
regardless of any job changes.
- Account is fully portable
- No “use it or lose it” rule
(like FSAs)
- Favorable tax treatment of contributions and distributions
- Lower
premiums with HDHPs
- Decision control (e.g., how much to contribute, whether
to pay now or save for future)
|
| About
HSA |
| HSAs
were created by Congress through the Medicare Prescription Drug Improvement Modernization
Act of 2003 and became effective in January 2004. HSAs were created in response
to the rising cost of health care and health insurance and the large number of
individuals and families in qualifying high deductible health plans. |
| Learn More |
| Learn about Health Savings Accounts |
| Minimum
Annual Deductible: |
-
$1,050 for single coverage
- $2,100 for family coverage |
| Maximum
Annual Out-of-Pocket: |
-
$5,250 for single coverage
- $10,500 for family coverage |
| Annual
Limits |
-
$2,700 for single coverage
Note: for any individual, the maximum contribution is the lesser of the indexed
amount or the deductible of the High Deductible Health Plan.
- $5,450 for family coverage
- Catch-up contributions allowed for individuals who are 55 and older: $700
- Can be made by individual, employer, others
- Same contribution deadline as IRAs
- Assets of an HSA can be rolled over to another HSA.
Both HSA contribution and catch-up contribution apply pro rate based on
the number of months of the year a taxpayer is an eligible individual. |
| Eligibilty
Requirements |
An eligible individual is someone who is:
- Covered by an HDHP
- Not enrolled in Medicare
- Not a recent recipient of VA medical benefits
- Not claimed as a dependent on another person’s
tax return |
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