Health Savings Accounts (HSA) Basics
Source: US Treasury Department
What is a HSA?
A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying or reimbursing qualified medical expenses for you, your spouse, and your dependents.
Am I Eligible for a HSA?
You are eligible for a regular HSA contribution if, with respect to any month, you:
- Have coverage under a HSA-qualified “high deductible health plan” (HDHP).
- Have no other first-dollar medical coverage (other types of insurance like specific injury insurance or accident, disability, dental care, vision care, or long-term care insurance are permitted).
- Are not enrolled in Medicare.
- Cannot be claimed as a dependent on someone else’s tax return.
High Deductible Health Plans (HDHPs)
A HDHP is a plan with an annual deductible no less than the amounts shown in the chart that follows.
HDHP Annual Deductible
|
Tax Year |
Self-Only Coverage |
Family Coverage |
|
2013 and later |
$1,200* |
$2,400* |
Are There Other Requirements for the HDHP?
Yes, for HSA purposes, the HDHP must limit out-of-pocket expenses to no more than the amounts shown in the chart that follows.
Maximum Out-of-Pocket Expenses
|
Tax Year |
Self-Only Coverage |
Family Coverage |
|
2013 and later |
$6,050* |
$12,100* |
*Subject to annual cost-of-living adjustments
What are a HSA Owner's Responsibilities?
If you are eligible, you can establish a HSA in much the same way you would establish an IRA--with a qualified trustee or custodian. Each year, you are responsible for determining your allowable annual HSA contribution and whether you have qualified medical expenses eligible for reimbursement with nontaxable HSA distributions.Who Can Contribute to My HSA?
If you meet the eligibility requirements for an HSA, you, your employer, your family members, and any other person may contribute to your HSA. This is true whether you're self-employed or unemployed.
How Much Can I Contribute to My HSA?
The maximum annual contribution amount is the standard limit as shown in the chart that follows.
Additionally, a "catch-up" contribution is available for eligible individuals who are age 55 or older by the end of their taxable year and are not enrolled in Medicare.
Contribution Limits
| Tax Year | Self-Only | Family | Catch-up Contribution Limit |
| 2013 and later | $3,250* | $6,450* | $1,000 |
*Subject to annual cost-of-living adjustments
How Do I Claim the Federal Tax Deduction for My HSA Contribution?
Contributions to a HSA are tax deductible, the earnings grow tax deferred, and distributions to pay or reimburse qualified medical expenses are tax free. You may deduct contributions made by anyone other than your employer as long as they do not exceed the maximum annual contribution amount. Employer contributions are not wages for federal income tax purposes.
Rollovers and transfers from HSAs, IRAs, Archer medical Savings accounts, health reimbursement arrangements, and health flexible spending accounts are not tax deductible.
When is the Contribution Deadline for Funding A HSA?
The deadline for regular and catch-up HSA contributions is your federal income tax return due date, excluding extensions, for that taxable year. The due date for most taxpayers is April 15.
What Happens to My HSA in the Event of My Death?
Spouse Beneficiary
If your spouse is the beneficiary of your HSA, the HSA becomes his/her HSA.
Nonspouse Beneficiary
If your beneficiary is not your spouse, the HSA ceases to be a HSA as of the date of your death. If your beneficiary is your estate, the fair market value of the HSA as of the date of your death is included as income on your final income tax return. For other beneficiaries, the fair market value of your HSA is included as income for the recipient in the tax year of your death.
For further information, consult the IRS's web site: www.irs.gov.
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