Health Savings Accounts
- A Health Savings Account (HSA) is a special tax-sheltered savings account designated exclusively for medical expenses.
- You are allowed to contribute up to the maximum federal limit ($3,400 Individual/$6,750 Non-Individual) for the 2017 calendar year. This maximum is a combined total of employee and/or employer contributions.
- Individuals age 55 and older can make a catch up contribution to their HSA. The maximum annual catch-up contribution is $1000.
- In order to be eligible for the HSA, you must be covered by one of the CareFirst qualifying high-deductible health plans.*
- For plan year 2016-2017, ESi will make contributions to employees’ Health Savings Accounts of equal installments over the 26 annual pay periods based upon the medical plan chosen.
*There is no deductible for well adult examinations, well child examinations, routine GYN visits, or cancer screenings-Pap tests, Prostate and Colorectal
- Contributions you may make through payroll deposits are made with pretax dollars, meaning they are not subject to federal (or state, for most states) income taxes.
- Contributions to your HSA made with after-tax dollars can be deducted from your gross income, meaning you pay less income tax at the end of the year.
- The interest you earn on your HSA balance is not taxed.
- Withdrawals from your HSA for qualified medical expenses are not subject to federal income tax. As long as you use your HSA funds for qualified medical expenses, you will not have to pay federal (or state, for most states) income taxes.
- Employers may make contributions to your account; these contributions are excluded from your gross income.
Flexible: HSA funds can be used for all qualified medical expenses, including traditional medical coverage, as well as eye glasses, dental procedures, prescription drug coverage and over-the-counter medication.
The money is yours; it grows and remains with you, even when you change medical plans, change employers or retire. There are no “use it or lose it” rules. Even if you are no longer eligible to make contributions, funds in your account may still be used to pay for qualified medical expenses tax-free. And after age 65, or in cases of disability, the funds in the account can be used for non-qualified expenses.
Portable: Accounts move with you when you change medical plans, change employers or retire.
- To be eligible to enroll in an HSA, you must be covered by a high deductible health plan.
- You cannot be covered by any other medical plan (other than a high deductible plan), enrolled in Medicare benefits, nor claimed as a dependent on another individual’s tax return
For more information on HSA plans visit mybenefitwallet.com and click on FAQs.