You can use your Health Savings Account for non-medical expenses after age 65 without penalty.
Our HSA is compatible with many health insurance plans (typically bronze or silver) offered on public and private exchanges or online marketplaces.
Health Savings Accounts (HSAs) are tax-advantaged medical savings accounts available to United States taxpayers who are enrolled in a High Deductible Health Plan (HDHP). HSAs are owned by the individual, differentiating them from company-owned Health Reimbursement Arrangements (HRAs) that are an alternate tax-deductible source of funds paired with HDHPs. And, unlike a Flexible Spending Account (FSA), HSA funds roll over and accumulate year over year if not spent, with the ability to earn tax-free interest on the account. HSA funds may be used to pay for qualified medical expenses at any time without federal tax liability.
If you have a qualified High Deductible Health Plan (HDHP) - either through your employer or one you've purchased on your own - chances are you can open an HSA. Additionally:
An HSA is a unique tax-advantaged account that you can use to pay for current or future IRS-qualified medical expenses. With an HSA, you'll have:
You can pay for a wide range of IRS-qualified medical expenses with your HSA, including many that aren't typically covered by health insurance plans. This includes deductibles, co-insurance, prescriptions, dental and vision care, and more. For a complete list of IRS-qualified medical expenses, visit irs.gov or hsabank.com/IRSQualifiedExpenses.
You can pay for IRS-qualified medical expenses with funds from your HSA by using your debit card. You can also pay for part of all of your IRS-qualified medical expenses out-of-pocket and reimburse yourself later with HSA funds.
If you pay for an ineligible expense, you must report it in your annual income tax filing and pay the related income taxes, plus a tax penalty. (After age 65, the penalty does not apply.)
No. You do not need to submit any receipts to us or file any claims. Just be sure to use the money for IRS-qualified medical expenses and save your receipts for tax purposes. Using our online expense tracker, you can easily enter medical expense information and securely upload receipts and supporting documentation – all in one place for easy access and tracking.
Unused HSA funds roll over year to year; there is no "use it or lose it" penalty. Funds that are rolled over continue to grow and earnings are tax free. At age 65, you will have the ability to use your HSA funds for any purpose on a taxable basis. This makes funding your HSA a great way to save for retirement.
Your HSA funds are never lost due to changes in employment or health plan. If at some point you are no longer covered by an HDHP, you still have access to your funds and can use them to pay for IRS-qualified medical expenses; however you are simply no longer eligible to make contributions.
Flexible Spending Accounts (FSAs) are tax-advantaged financial accounts that can be set-up through employers' cafeteria plans in the United States. An FSA allows an employee to designate a portion of his or her pre-tax earnings to pay for qualified expenses as established in the cafeteria plan, most commonly for medical expenses, but often for dependent care or other expenditures. The employer is also allowed to make contributions to employee FSAs, if desired, in order to offer a greater benefit to the staff. Since the money deducted from an employee's pay for transfer to an FSA is not subject to federal, state, or payroll taxes, employees can save upwards of 40% on eligible expenses, and sometimes more, depending on their tax bracket.
With an FSA, you elect to have your annual contribution (up to the limit set by the IRS, which for 2016 is $2,550) deducted from your paycheck each pay period, in equal installments throughout the year, until you reach the yearly maximum you have specified. The amount of your pay that goes into an FSA will not count as taxable income, so you will have immediate tax savings. FSA dollars can be used during the plan year to pay for qualified expenses and services. And at the end of the year, you can roll over up to $500 of your contribution to the next plan year, provided your employer's plan allows this.
Yes. All eligible out-of-pocket expenses incurred by you, your spouse and your qualified dependents can be reimbursed from your Healthcare FSA, even if your spouse and qualified dependents are not enrolled in your employer's health plan.
For 2015 and 2016, Healthcare FSA contributions are limited by the IRS to $2,550. The contribution limits in his/her employer's Healthcare FSA. Employers may elect a lower limit as part of their Healthcare FSA plan design. You should check with your Human Resources department for the specifics of your plan. The IRS contribution limit with be adjusted annually to account for inflation increases.
Your plan document may provide for a grace period that allows you to use your remaining funds for IRS-qualified expenses incurred for up to 2 ½ months into the next year.
Alternatively, if you have an FSA or Limited Purpose FSA, you may be eligible to roll over up to $500 of your contribution to the next plan year, provided your employer has changed the plan documents to allow this. This rollover option does not apply to Dependent Care FSAs.
Deductions for your Healthcare FSA will also end when your employment ends unless your employer is obligated to offer you COBRA continuation and you elect this option. If your employer is not obligated to offer you COBRA and/or you choose not to elect COBRA, you are eligible to be reimbursed for qualified expenses incurred while you were employed and the account was active. Requests for reimbursements should be submitted prior to the end of your employer's run-out period or period of time for which a claim for an expense can be submitted for a plan year that has ended or after an employee has terminated.
Health Reimbursement Arrangements (HRAs) are employer-funded plans that reimburse employees for incurred medical expenses that are not covered by the company's standard insurance plan. Because the employer funds the plan, any distributions are considered tax deductible (to the employer). Reimbursement dollars received by the employee are generally tax-free. Unused HRA dollars may roll over from year to year, if allowed per plan rules, providing a potential incentive for employees to be better stewards of healthcare spending. If employment is terminated, the employer can choose to keep unused funds.
Yes. An HRA is designed to cover expenses not paid by your health plan including deductibles, coinsurance and copayments as well as many expenses your health plan may not cover.
Your employer may allow you to continue to incur expenses and spend down your account after you leave the company or retire. If your employer does not offer this option, COBRA coverage must be offered. At termination of employment, your Health Benefits Debit Card will be deactivated. You may still access funds for services incurred before you leave the company and while you were covered under the plan, but your reimbursement request must be made manually. You are not eligible to use the funds for services incurred after your HRA terminates. Some HRAs may be set up to be portable, meaning you retain ownership of the funds after you leave the company. Please see your company's plan documents for more information.
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