Health Savings Account

Health Savings Account
Contributions and Qualified Expenses

If you're wondering how much contributions you need to make to a Health Savings Account and what types of medical expenses qualify, please read on...

Health Savings Account Contributions

You can make a contribution to your Health Savings Account each year that you are eligible.

You can contribute up to the amount of your High-Deductible Health Plan (HDHP)deductible but no more than:

$2,650* -- Self-only coverage
$5,250* -- Family coverage

*These amounts are adjusted annually for inflation.

Determining Your HSA Contribution

You can begin to contribute to your Health Savings Account as soon as your HDHP coverage takes effect.

If you do not have HDHP coverage for the entire year, you will not be able to make the maximum contribution.

All contributions (including catch-up contributions) must be pro-rated. Your annual contribution depends on the number of months of HDHP coverage you have during the year (count only the months where you have HDHP coverage on the first day of the month).

Contributions can be made as late as April 15 of the following year.

Using Your Health Savings Account

You can use the money in the account to pay for any "qualified medical expense" permitted under federal tax law.

This includes most medical care and services, and dental and vision care, and also includes over-the-counter drugs such as aspirin.

You can generally not use the money to pay for medical insurance premiums, except under specific circumstances, including:

Any health insurance coverage while receiving federal or state unemployment benefits.
COBRA continuation coverage after leaving employment with a company that offers health insurance coverage.
Qualified long-term care insurance.
Medicare premiums and out-of-pocket expenses,including deductibles, co-pays, and coinsurance for:
- Part A (hospital and inpatient services)
- Part B (physician and outpatient services)
- Part C (Medicare HMO and PPO plans)
- Part D (prescription drugs)

You can use the money in the account to pay for medical expenses of yourself, your spouse, or your dependent children.

You can pay for expenses of your spouse and dependent children even if they are not covered by your HDHP.

Any amounts used for purposes other than to pay for "qualified medical expenses" are taxable as income and subject to an additional 10% tax penalty. Examplesinclude:

medical expenses that are not considered "qualified medical expenses" under federal tax law (e.g., cosmetic surgery)
other types of health insurance unless specifically described above
Medicare supplement insurance premiums
expenses that are not medical or health-related

After you turn age 65, or if you become disabled, the 10% additional tax penalty no longer applies.

Click here to find an HSA plan that's right for you.

HSA Resources:

www.ustreas.gov/offices/public-affairs/hsa/
www.hsainsider.com

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