Health Savings Accounts: Frequently Asked Questions Healthshare

Health Savings Accounts: Frequently Asked Questions

HSA FAQsFunding your health savings account and understanding what you can use those funds for can get a bit tricky. If you overfund your HSA, you could be looking at a 6 percent penalty. Here are a few situations you could find yourself in, and here’s how you can avoid and fix these simple mistakes:

Q: Do employer contributions count towards the annual maximum
contribution limit for an HSA? 

A: Yes – if your employer contributes towards your HSA, this counts toward the annual contribution limit. You will have to adjust your contributions accordingly so you do not overfund your account.

Q: It’s December and I have noticed that I have overfunded my HSA. What do I do?

A: You have until your tax return is due to make corrections to an overfunded HSA.  You’ll need to withdraw the overfunded portion. You can do this by contacting your HSA administrator, and they can provide you with the proper form to request a withdrawal.

Q: I just realized I overfunded my HSA and the tax return deadline has passed. What do I do?

A: Because you missed the withdrawal deadline, you’ll have to pay a 6 percent
excise tax on the excess funds and claim any earnings as income on your tax

Q: What are the maximum contribution limits for 2014?

A: Individuals can contribute a maximum of $3,300 and families can contribute a maximum of $6,550 for 2014. If you’re over 55, you can make an additional $1,000 catch-up contribution.

Q: If I am the only one insured by my high-deductible health plan, can I use my HSA funds on other family members?

A: Yes, you can use your HSA funds tax -free and without penalty for your spouse, children or other dependents.

Q: Can I use HSA funds to pay for services not covered by my insurance company?

A: Yes – many non-covered services can be paid with HSA funds. Here is a brief list of services that are typically not covered by insurance companies that can be paid with HSA funds:

  • Insurance premiums for long-term care insurance
  • Alternative medicine including acupuncture and nutritional counseling
  • Chiropractic services
  • Mental health

Q: What expenses are HSA-qualified expenses?

A: HSA funds can be used to pay expenses such as prescriptions, doctors’ fees,
glasses, contact lenses, et cetera. To see a full list of HSA-qualified expenses,
click here.

Do you have any questions about HSA funding or qualified expenses? What other questions can we answer for you?

Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.

WP Facebook Auto Publish Powered By :