Frequently Asked Questions
Questions:
- Who can have an HSA?
- What is a high deductible health plan?
- How does an eligible individual establish an HSA?
- What medical services are eligible?
- Who is a qualified HSA trustee or custodian?
- Who may contribute to an HSA?
- How much may be contributed to an HSA in 2004?
- May Health Savings Account money be used on medical expenses that do not count as covered expenses under the insurance policy?
- Can HSA money be used for non-medical expenses?
- What happens to the money in my SHA that I don’t spend?
- If I accumulate a bunch of money (way over the deductible) in my HSA, when I reach retirement age can I use the funds for living expenses?
- Now that the deductibles have come down, will a traditional high deductible policy qualify? My policy has a $2,000 deductible per person. For my wife and me, that would be $4,000.
- Is it possible to have a Health Savings Account without the qualifying insurance?
- If I start my insurance coverage on June 15th, can I still fund up to the deductible?
- This sounds great. How do I set up a Health Savings Account?
- I work in a seasonal business. My busy times are Christmas and the 4th of July. Can I just fund my account at these times, or do I have to do it with my regular insurance billing?
Who can have an HSA? Any “eligible individual” can establish an HSA. An “eligible individual” is generally someone that is covered under a high-deductible health plan and is not entitled to benefits under Medicare (generally, has not yet reached age 65); and may not be claimed as a dependent on another person’s tax return. |
How does an eligible individual establish an HSA? Beginning January 1, 2004, any eligible individual can establish an HSA. Prior to contributing to an HSA you must be enrolled in a qualified high deductible insurance plan and the HSA must be administered by a qualified custodian. MyBizBenefits provides a gateway search for HSA qualified insurance plans and a no fee HSA located on our HSA Quote page. |
What medical services are eligible? Almost all common mainstream medical services can be paid from a health savings account. View a list of eligible and non-eligible services here. |
May Health Savings Account money be used on medical expenses that do not count as covered expenses under the insurance policy? Yes. This is another of the great advantages of the Health Savings Account. The typical American is out-of-pocket a considerable amount every year for medical expenses that are not covered under the insurance plan, due to the fact that the plan may not cover dental, or because of deductibles and co-payments. The individual is presently paying those amounts with after-tax dollars. If you have a daughter that needs braces for her teeth at a cost of $4,000, it typically means you need to have $6,000 in pre-tax income. With a Health Savings Account, you are going to cut out all of the extra cost by paying for dental work, eyeglasses, and other expenses not covered by the deductible with tax-free money from your Health Savings Account. |
Can HSA money be used for non-medical expenses? Yes, but money withdrawn before age 65 for non-medical purposes is subject to income taxes and a 10% federal excise tax. |
Is it possible to have a Health Savings Account without the qualifying insurance? No. |
This sounds great. How do I set up a Health Savings Account? Easy. When you apply for insurance with Medical Savings Insurance Company, we automatically create an account for you. There is no additional paperwork necessary |