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HSA Q&A | HSA CHECKING
HSA Accounts
Health Savings Accounts (HSA) were designed to help individuals/families defer the out of pocket expense when they are covered by a High Deductible Health Plan (HDHP). An HDHP is defined has having a higher annual deductible than typical health plans, and a maximum limit on the sum of the annual deductible and out-of-pocket expenses. Out-of-pocket expenses include co-payments and other amounts, but do not include premiums.
HSA accounts offer tax benefits for contributions and distribution (when used for qualified expenses).
Eligibility
In order to qualify for this type of account there are requirements that have been set by the Internal Revenue Service. A customer must meet all four of the follow qualifications:
- Have a high deductible health plan on the first day of the month
- Have no other health coverage
- Not enrolled in Medicare
- Cannot be claimed as a dependent on someone else’s tax return
Benefits
HSA Accounts receive tax benefits, such as contributions, whether completed by you the customer and/or your employer in turn lowering your taxable income and distribution that are used for qualifying expenses are tax free.
Because your employer and you can both make contributions to your HSA it is imperative to remember your contribution limit in order to avoid penalties for having an ‘excess contribution’.
Contribution Limits
2009 HSA Contribution limits are as follows:
Standard Limits¹
Self-only $3,000 Family $5,950
Catch-up Contribution amount² $1,000 (Catch-up contribution are offered to those that are age 55 or older)
¹ Subject to cost-of-living adjustments (COLAs).
² Catch-up contribution increases $100 per year through 2009
Note: contributions limits are set by IRS and are subject to change.
Financial Institutions Responsibility
As the trustee of the HSA accounts our responsibilities are much like that of the Individual Retirement Accounts. Fidelity Bank is not responsible for determining an HSA owner’s eligibility, nor is it responsible for determining whether an HSA owner’s distribution is for a qualified medical expense.
Owner’s Responsibility
An HSA owner, with the assistance of his insurance company and tax/legal professional, are responsible for making all determinations relating to this type of account.
Ownerships
HSA are individual accounts and may not be jointly owned. However, you are permitted to have an authorized signer, such as your spouse. Just like any account you may designate a beneficiary and the account transfers to the beneficiary. If the beneficiary is your spouse, the ownership automatically transfers to the spouse. If you name someone other than your spouse, the account ceases to be an HSA Account (an authorized signer rights ceases upon the owners death and does not transfer to their ownership).
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