Health Savings Accounts
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:
Located in historic Chestertown, Maryland, Chesapeake Benefits provides counsel, administrative support, and benefits solutions to employers and employees across the United States. We market quality and affordable group plans to employers, business associations, multi state employers, as well as serving the needs of our local clients.
- 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
- Friendly faces with a regional reach
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 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.
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:
Annual Physical Examination
Birth Control Pills
Braille Books and Magazines
Breast Pumps and Supplies
Breast Reconstruction Surgery
Christian Science Practitioner
Disabled Dependent Care Expenses
Guide Dog or Other Service Animal
Health Maintenance Organization (HMO)
Intellectually and Developmentally Disabled, Special Home for
Lead-Based Paint Removal
Lifetime Care—Advance Payments
Medical Information Plan
Pregnancy Test Kit
Vision Correction Surgery
Ineligible medical expenses may include:
Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby
Electrolysis or Hair Removal
Flexible Spending Account
Future Medical Care
Health Club Dues
Health Coverage Tax Credit
Health Savings Accounts
Illegal Operations and Treatments
Medical Savings Account (MSA)
Medicines and Drugs From Other Countries
Nonprescription Drugs and Medicines
Personal Use Items
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