Health Savings Accounts (HSAs)
A health savings account (HSA) is a tax-exempt or custodial account set up with a qualified HSA trustee to pay or reimburse certain medical expenses incurred by an individual, his or her spouse, and qualified dependents. The medical expenses must not be reimbursable by insurance or other sources, and distributions from HSA funds will not give rise to a medical expense deduction on the individual’s tax return.
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Qualifying for an HSA
To be eligible, a participant must meet the following requirements.
- Must be covered under a high deductible health plan (HDHP).
- Cannot have any other health coverage. Exception:
Coverage for specific things, such as disability, dental care, vision care, and long-term care, can be purchased in addition to the HDHP without disqualifying
the HSA. - Cannot be enrolled in Medicare.
- Cannot be eligible to be claimed as a dependent on someone else’s tax return
Last-Month Rule
If an individual is an eligible individual on the first day of the last month of his or her tax year (December 1 for most taxpayers), that individual is considered an eligible
individual for the entire year. Special rules apply if the individual does not remain an eligible individual during a full 12-month period. Exceptions apply in case of death or disability.
Click 2016 Health Savings Accounts (HSAs) Here
Spousals HSAs
The HSAs cannot be joint accounts. Each spouse must open a separate account. However, if only one has an account, the funds in that account can be used to pay for expenses incurred by the other spouse, as well as the participant’s other family members.
High Deductible Health Plan (HDHP)
An HDHP can provide for preventive care benefits without a deductible or with a deductible below the minimum limit ($1,300 for 2015 self-only coverage). Family
HDHP coverage covers an eligible individual and at least one other person.
Click 2016 Health Savings Accounts (HSAs) Here
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