Health Savings Account

A Health Savings Account (HSA) provides tax-free savings to be used on qualified medical expenses. To be eligible for an HSA, you must meet certain criteria:

Must be covered under a qualified high deductible health plan (HDHP). For 2014, a high deductible health plan is defined as a plan with an annual deductible no less than $1,250 for self-only coverage, and an annual deductible no less than $2,500 for family coverage. HSA eligible high deductible health plans are typically denoted as such in their plan design.

Do not have any other health coverage, with the exception to dental, vision, disability, and long term care, as well as specified disease insurance, hospital plans, and accident plans.

Not currently enrolled in Medicare

Cannot be claimed as a dependent on someone else’s tax return

 

Important to note: Employees who are covered by a HDHP and a health flexible spending account (FSA) or a health reimbursement account (HRA) cannot make contributions to a HSA.

 

 

Contributions:

Contributions to an individual’s HSA can be made by either the individual, family members or any other individual who wants to make a contribution. If the individual is employed, both the employee and the employer can contribute to the account in the same year.

Contributions for 2014 are $3,300 for an individual with self-only coverage, and $6,550 for an individual with family coverage.

Additional contributions are allowed for eligible individuals 55 or older in the amount of $1,000.

Last Month Rule – If an individual becomes eligible on the first day of the last month of the calendar year, you are considered eligible for the entire year. You must remain eligible for the 12 month period following initial eligibility to avoid penalties on contributions.

Distributions:

An individual may use funds accumulated in a Health Savings Account for qualified medical expenses. The funds would be distributed to the account holder tax free to be reimbursed for qualified expenses incurred after the establishment of the account.

Eligible medical expenses may include:

Learning Disability

Legal Fees

Lifetime Care—Advance Payments

Lodging

Long-Term Care

Meals

Medical Conferences

Medical Information Plan

Medicines

Nursing Home

Nursing Services

Operations

Optometrist

Organ Donors

Osteopath

Oxygen

Physical Examination

Pregnancy Test Kit

Prosthesis

Psychiatric Care

Psychoanalysis

Psychologist

Special Education

Sterilization

Stop-Smoking Programs

Surgery

Telephone

Television

Therapy

Transplants

Transportation

Trips

Tuition

Vasectomy

Vision Correction Surgery

Weight-Loss Program

Wheelchair

Wig

X-ray

Acupuncture

Alcoholism

Ambulance

Annual Physical Examination

Artificial Limb

Artificial Teeth

Autoette

Bandages

Birth Control Pills

Body Scan

Braille Books and Magazines

Breast Pumps and Supplies

Breast Reconstruction Surgery

Capital Expenses

Car

Chiropractor

Christian Science Practitioner

Contact Lenses

Crutches

Dental Treatment

Diagnostic Devices

Disabled Dependent Care Expenses

Drug Addiction

Drugs

Eye Exam

Eyeglasses

Eye Surgery

Fertility Enhancement

Founder's Fee

Guide Dog or Other Service Animal

Health Institute

Health Maintenance Organization (HMO)

Hearing Aids

Home Care

Home Improvements

Hospital Services

Insurance Premiums

Intellectually and Developmentally Disabled, Special Home for

Laboratory Fees

Lactation Expenses

Lead-Based Paint Removal

 

 

 

Ineligible medical expenses may include:

Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby

Controlled Substances

Cosmetic Surgery

Dancing Lessons

Diaper Service

Electrolysis or Hair Removal

Flexible Spending Account

Funeral Expenses

Future Medical Care

Hair Transplant

Health Club Dues

Health Coverage Tax Credit

Health Savings Accounts

Household Help

Illegal Operations and Treatments

 

Insurance Premiums

Maternity Clothes

Medical Savings Account (MSA)

Medicines and Drugs From Other Countries

Nonprescription Drugs and Medicines

Nutritional Supplements

Personal Use Items

Swimming Lessons

Teeth Whitening

Veterinary Fees

Weight-Loss Program

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