Health Savings Accounts
How do employees qualify to open an HSA?
They must have insurance coverage under a qualified High Deductible Health Plan (HDHP) to open and contribute to an HSA. In 2008, the HDHP deductible must be at least $1,100 for individual coverage and $2,200 for family coverage. In addition, annual out-of-pocket expenses under the plan (including deductibles, copays and coinsurance) cannot exceed $5,600 for individual coverage and $11,200 for family coverage. These amounts are adjusted annually for inflation. Participants may not be covered by any health plan (including a HCFSA) that is not an HDHP, may not be enrolled in Medicare Part A or Part B, and may not be claimed as a dependent on another person's tax return.
View additional questions:
- What is a Health Savings Account (HSA)?
- How do employees qualify to open an HSA?
- When can contributions be made to an HSA?
- Can employer's still offer their regular Health Care Flexible Spending Account (HCFSA) Plan to HSA participants?
- Do employers have to amend the Cafeteria Plan to allow for pre-tax contributions to the HSA?
- How much can be contributed to an HSA?
- Can money be rolled over from an employee's Health Flexible Spending Account (HCFSA) or Healthcare Reimbursement Account (HRA) into an HSA?
- Can a participant transfer money from his or her Individual Retirement Account (IRA) into an HSA?
- Who can contribute to an HSA?
- What can the participant use the HSA money for?
- How are withdrawals from an HSA treated if they are not used for qualified medical expenses?
- Are contributions to and distributions from an HSA reported to the IRS?