What is an HSA?
Health Savings Accounts (HSAs) are tax-exempt accounts where funds grow
to pay for medical expenses. They were created to help give control back
to consumers and lower healthcare costs. HSAs provide a financial
incentive for consumers to select a High Deductible Health Plan (HDHP).
HDHPs have lower monthly premiums than traditional plans. The HSA/HDHP
combination provides consumers with more incentive to shop carefully for
healthcare services.
An HSA is your account. If you switch jobs, the HSA goes with you. Your
money rolls over every year. There is no "use it or lose
it" requirement.
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IRS Requirements for 2009 |
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Single Plan |
Family Plan |
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Minimum Deductible |
$1,150.00 |
$3,300.00 |
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Maximum Out-of-Pocket |
$5,800.00 |
$11,600.00 |
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IRS Requirements for 2010 |
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Single Plan |
Family Plan |
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Minimum Deductible |
$1,200.00 |
$2,400.00 |
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Maximum Out-of-Pocket |
$5,950.00 |
$11,900.00 |
Contact your insurance carrier to verify your HDHP qualifies for an
HSA.
Contributions
When you have a qualifying HDHP, the following contribution guidelines
apply.
- Anyone can contribute to your HSA.
- Your contributions are tax deductible.
- If your employer contributes to your HSA, that contribution is done
on a pre-tax basis.
- Any pay-roll deductions made through Section 125 for your HSA are
also on a pre-tax basis.
For 2009, you may contribute a maximum of
$3,000 for an individual and $5,950 for a family
For 2010, you may contribute a maximum
of $3,050 for an individual and $6,150 for a family
Tax Advantages of a Health Savings Account
Federally Qualified HSA plans are tax-deductible, tax-deferred, and
tax-free.
- Tax-deductible: Contributions to your HSA can be deducted from
your gross income.
- Pre-tax: Contributions made to your HSA through payroll
deductions.
- Tax-deferred: Your HSA money grows without being taxed.
- Tax-free: You can use your HSA money tax free for eligible medical
expenses.
Over the life of your HSA, you can save thousands of dollars in taxes.
For the 2007 tax year and going forward, your clients can enjoy even
greater tax benefits with increased contribution potential.
Eligible HSA Medical Expenses
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abdominal supports
acupuncture
air conditioner (relief allergy/breathing problems)
alcoholism treatment
ambulance
anesthetist
arch supports
artificial limbs
autoette (used for relief of sickness/disability)
blood tests
blood transfusions
braces
cardiographs
chiropractor
Christian Science Practitioner
contact lenses
convalescent home (medical treatment only)
crutches
dental treatment
dental x-rays
dentures
dermatologist
diagnostic fees
diathermy
drug addiction therapy
drugs (prescription)
elastic hosiery (prescription)
eyeglasses
fees paid to doctor prescribed health institute
FICA and FUTA tax paid for medical care service
fluoridation unit
guide dog
gum treatment
gynecologist
healing services
hearing aids and batteries
hospital bills
hydrotherapy
insulin treatments
lab tests
lead paint removal
legal fees (to authorize treatment for mental illness)
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lodging (away from home outpatient care)
metabolism tests
neurologist
nursing (including board and meals)
obstetrician
operating room costs
ophthalmologist
optician
optometrist
oral surgery
organ transplant (including donor’s expenses)
orthopedic shoes
orthopedist
osteopath
over the counter drugs
oxygen and oxygen equipment
pediatrician
physician
physiotherapist
podiatrist
postnatal treatments
practical nurse for medical services
prenatal care
prescription medicines
psychiatrist
psychoanalyst
psychologist
psychotherapy
radium therapy
registered nurse
special school costs for the handicapped
spinal fluid test
splints
sterilization
surgeon
telephone or TV equipment to assist
the hard of hearing
therapy equipment
transportation expenses (relative to
health care)
ultraviolet ray treatment
vaccines
vasectomy
vitamins (if prescribed)
wheelchair
x-rays
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* Federally Qualified HSA:
To have a Federally Qualified HSA, you must purchase and maintain a
high-deductible insurance policy and you cannot be covered by another
low-deductible insurance policy.
* Please note the conditions of your plan: We strongly recommend
that you always comply with the conditions of your plan, including
pre-certification requirements. |
