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Tom Crennen
Sara Synko
Tina, Tom, Sara, Tera or Sean
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Health Savings Accounts, HSAs

Health Savings Accounts (HSAs) have been enacted by legislation that went into effect January 1st , 2004. Most health carriers have plans that will qualify for this legislation that combines a high deductible medical insurance policy with a special tax-deferred “Health Savings Account.” Anthem, Humana, Rocky Mountain Health plans and United Healthcare, are just some of the Carriers that offer HSA compatible policies. The chart below gives a rough idea of how the plans are structured.
Health Savings Account Chart

HSAs can be tricky to understand, as both the high deductible health policy is required so that the Health Saving Account can be funded for maximum benefit. Only certain savings accounts can be used as they have to meet the HSA rules.

Give us a call and we will be happy to discuss the ins and outs of these policies.
The description below is taken from information provided by Fortis Insurance:

Health Savings Accounts:

A Health Savings Account is an account, when coupled with a high deductible health insurance plan, that allows for the accumulation of tax favored savings for the funding of qualified medical expenses. Effective January 1, 2004, contributions made by an eligible individual to an HSA account are deductible in determining adjusting gross income (“above the line”). An eligible individual is anyone who has a high deductible health insurance plan. The maximum aggregate annual contribution for 2019 $3,500 individual or $7,000 family.

High Deductible Health Plans:
To qualify as a high deductible plan, the minimum deductible must be at least $1,350 for an individual and $2,700 for family. Out-of-pocket maximums are set at $6,750 individual and $13,500 family for 2019. These maximums are subject to annual cost of living increases. Out-of-network out-of-pocket limits are not included in the out-of-pocket maximum. A high deductible plan can pay for preventative care as defined by federal law, under the deductible and still qualify.

Annual contribution limits for 2019 are $3,500 for individual or $7,000 for family. Contributions may be made by anyone on behalf of the account beneficiary. You can contribute the full amount to the account even if you start mid year, but you must remain on an HSA compatible plan through the end of the year. Failure to remain an HSA compatible plan will result in a 10% penalty plus income tax.

The money in the HSA accumulates on a tax – deferred basis and can be used to pay for any qualified medical expense.
Withdrawals for reasons other than qualified medical expenses prior to age 65 are taxable and subject to a 10% penalty.
Upon death, disability, or attaining age 65, funds can be withdrawn for non-medical reasons with no penalty, but such distributions will be included in gross income.
You can use tax-free withdrawals to pay premiums for qualified long term care insurance, COBRA or State Continuation health insurance, while receiving unemployment compensation under any federal or state law, and if you are age 65 or older, any health insurance other than a Medicare supplemental policy.

Tina, Tom, Tera, Sara, and Sean

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