A health savings account (HSA) is a special kind of individual savings account that works in conjunction with a high-deductible health plan (HDHP) to cover out-of-pocket medical expenses for the account holder and family. An HSA can offer triple tax savings:
- Contributions to the account can be made on a tax-free or tax-deductible basis,
- Earnings on the account are tax-free while they remain in the account, and
- Distributions of contributions and earnings are tax-free if they are used for qualifying medical expenses.
To take maximum advantage of these and other benefits of an HSA, it is important to understand how an HSA works.
Unfortunately, while there are currently more than 25 million health savings accounts (HSAs) in existence holding more than $53 billion in assets, a recent survey reports that HSAs are misunderstood and only a small fraction of employees able to correctly identify their attributes.
WHAT YOU NEED TO KNOW ABOUT HEALTH SAVINGS ACCOUNTS: How HSAs Can Work for You is an effective and inexpensive way to make sure your staff understand the value and take advantage of the benefits of HSAs. This plain-English 24-page pamphlet is intended as a layperson’s guide to how HSAs work and can be distributed to your current and new employees to help them understand the ins and outs of HSAs. Loaded with real-world examples and presented in helpful Q&A format, this insightful guide answers more than 30 essential topics:
- What is a health savings account?
- Who is eligible for an HSA?
- What is a high-deductible health plan?
- Are there different levels of high-deductible health plan coverage?
- What are the dollar amounts of the minimum annual deductible and maximum out-of-pocket expenses?
- How are deductibles and out-of-pocket expenses defined?
- Can an individual have any health coverage other than an High Deductible Health Plan (HDHP) and still qualify for an HSA?
- Can an HDHP reimburse any expenses before the minimum annual deductible has been met?
- How is an HSA set up?
- Who can contribute to an HSA?
- Is an employer that sponsors an HDHP required to contribute to HSAs for employees?
- How much can be contributed to an HSA for a year?
- How is the annual contribution limit figured?
- Are there exceptions to the month-by-month rule?
- Are HSA catch-up contributions allowed for older employees as they are for 401(k) contributions?
- How do the contribution limits apply to married couples?
- What can be contributed to an HSA?
- What is the deadline for making HSA contributions for a year?
- How are HSA contributions made?
- Can HSA contributions be made from another HSA or a retirement account?
- What are the rules for rollover contributions?
- May retirement savings be used to fund an HSA?
- Can HSA funds be invested?
- How are HSA contributions treated for tax purposes?
- When can HSA funds be withdrawn from the account?
- How are HSA distributions treated for tax purposes?
- What are qualified medical expenses?
- Whose medical expenses can be covered by an HSA?
- What happens if HSA contributions for a year are not used by the end of the year?
- Is there a time limit on using HSA contributions for qualified medical expense?
- Can an HSA do “double duty” as retirement savings?
- What happens to HSA funds when the account holder dies?
HSA REPORTING RULES
- How are HSA contributions and distributions reported for tax purposes?
WHAT YOU NEED TO KNOW ABOUT HEALTH SAVINGS ACCOUNTS: How HSAs Can Work for You helps you help your employees understand HSAs by:
- Overcoming the lack of understanding around HSAs that may be leading to a lack of use by employees
- Describing and promoting the benefits that HSAs to employees so they can help better manage their expenses
- Encourage employees to better manage current and future health expenses
Save your company hours of management and personnel time by:
- Issuing this new booklet to employees
- Handing them out to new hires
- Making them available when questions arise
|Product Line||Wolters Kluwer Legal & Regulatory U.S.|