Health Savings Account FAQs

At HSA Bank, we’re working toward a world where everyone is confidently engaged with their health and wealth. By delivering personalized insights, experiences and solutions, we make it simple for our over 3 million members nationwide to drive value and tangible outcomes. As a leader in health accounts for over two decades, we have the depth and breadth of expertise that matters most. We are devoted to delivering an outstanding user experience and our offerings in the healthcare savings space drive down healthcare costs, increase access, and assist with decision-making for individuals, employers and partners. As of March 31, 2024, HSA Bank had $13.8 billion in total footings comprising $8.6 billion in deposit balances and $5.2 billion in assets under administration through linked investment accounts and is a division of Webster Bank, N.A., Member FDIC Plan Administrative Services and Benefit Services are administered by Webster Servicing LLC.

The main requirement for opening an HSA is having a high-deductible health plan that meets IRS guidelines for the annual deductible and out-of-pocket maximum. To be an eligible individual and qualify for an HSA, you must also meet the following requirements.

  • You are not covered by any other non-HDHP health plan, such as a spouse's plan, that provides any benefits covered by your HDHP plan.

  • You are not enrolled in Medicare.

  • You do not receive health benefits under TRICARE.

  • You cannot have received medical benefits from Veterans Administration (VA) for any non-service-connected disabilities at any time during the previous three months.*

  • You cannot be claimed as a dependent on another person's tax return.

  • You are not covered by a general purpose health care flexible spending account (FSA) or health reimbursement account (HRA). Alternative plan designs, such as a limited-purpose FSA or HRA, might be permitted.

*Title 38 of the United States Code, Section 101(17) defines "non-service-connected" as, with respect to disability, that such disability was not incurred or aggravated in line of duty in the active military, naval, or air service.

The routing number is 075907947.

An HDHP is a health plan that satisfies certain requirements for deductibles and out-of-pocket expenses. View the IRS guidelines and eligible expenses.

In addition to your HDHP, you may have coverage from "permitted insurance" which is coverage related to compensation from workers' compensation, tort liabilities, liabilities relating to ownership or use of property, insurance for a specified disease or illness, and insurance that pays a fixed amount per day of hospitalization. Coverage for accidents, disability, dental care, vision care, or long-term care does not disqualify you from opening an HSA.

No. Each spouse must open a separate HSA. You can, however, give your spouse access to your HSA by designating them as an authorized signer on the account.

Anyone can contribute to your HSA on your behalf.

No. Contributions may be made by you, or on your behalf, even if you are retired, have no income, or your income is less than your contributions.

Yes. The IRS determines the maximum amount that can be contributed to an HSA during the calendar year. View the contribution limits.

Eligible individuals over the age of 55 are allowed to make additional "catch-up" contributions to their HSAs. The catch-up amount is $1,000, and if you turn 55 during the year, you can contribute the full $1,000.

If you drop your HSA-compatible health plan during the year, you must prorate your HSA contributions to avoid tax penalties. The below examples show a calendar year taxpayer whose coverage terminated on the last day in September.

Mid-year Coverage
"Full contribution" or "last month" rule - If your HSA-compatible coverage begins between January 1 and December 1 , you can contribute the maximum amount for that year provided you maintain HSA- compatible coverage until December 31st of the following year1. This rule can also be applied to catch-up contributions.

Health Plan Status Change
If you begin the year with family coverage and switch to single coverage in July of that year (for example), you are eligible to contribute half of the family coverage maximum and half of the individual coverage contribution maximum.

If you begin the year with single coverage and switch to family coverage by December 1st of that year, you are eligible to contribute the maximum family amount for that year provided you maintain HSA-compatible coverage until December 31st of the following year. This is covered under the ‘Full contribution’ rule, and can also be applied to catch-up contributions.

Note: HSA Bank does not provide legal or tax advice. Please contact your tax professional with any tax-related questions.

*Individual accountholders age 55 and older can make an additional $1,000 catch-up contribution. Eligible spouses over 55 can only make catch-up contributions to his/her account. Catch-up contributions must be prorated as well.

1If you do not maintain HSA-compatible coverage through the end of the following year, the contributions exceeding the prorated amount for the months of actual eligibility become taxable income and are subject to penalty.

Yes, yearly contributions should be made by your tax filing deadline, generally April 15 of the following year.

If your HSA contributions exceed the IRS contribution limits, you must report the excess amount as gross income on your income tax. You will also have to pay additional excise tax on this amount. However, you can remove the excess contributions by submitting an Excess Contribution Removal Form to us within that tax year. (A fee may apply. See your HSA Bank Fee and Interest Rate Schedule.)

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 or visit our qualified medical expense page.

Generally, health insurance premiums ARE NOT considered IRS-qualified medical expenses, UNLESS they are for:

  • Qualified long-term care insurance,

  • COBRA health care continuation coverage

  • Health care coverage while an individual is receiving unemployment compensation


For individuals over 65, the following premiums ARE considered IRS-qualified medical expenses:

  • Medicare Parts A, B, D, Medicare HMA

  • Employee portion paid for employer-sponsored health insurance

  • Employee portion paid for employer-sponsored retiree health insurance

Yes, as long as the IRS-qualified medical expenses were incurred after your HSA was established, you can pay them or reimburse yourself with HSA funds at any time. Just be sure to keep sufficient records to show that these expenses were not previously paid for by another source or taken as an itemized deduction in any prior tax year.

As the HSA accountholder, you are responsible. So it's important to keep records of the IRS-qualified medical expenses you pay for with your HSA in order to exclude those dollars from your gross income.

HSA funds that are used to pay for non IRS-qualified medical expenses are considered part of your gross income and subject to an additional 20%. Exceptions include HSA distributions that are made after an accountholder's death, disability, or after they turn 65.

You can invest your HSA funds in any IRA-approved investment, such as bank accounts, annuities, certificates of deposit, stocks, mutual funds, or bonds. You can't invest HSA funds in life insurance contracts, or in collectibles (e.g., any work of art, antique, metal, gem, stamp, coin, alcoholic beverage, or other tangible personal property). HSAs may, however, be invested in certain types of bullion or coins.

Please note: An HSA trust or custodial agreement may restrict options to certain types of permissible investments (e.g., particular investment funds).

Yes. Generally, you are able to transfer or rollover funds from an MSA or HSA with another custodian to your current HSA at HSA Bank. You are limited to one rollover per twelve month period, and the rollover must be completed within 60 days. For more information and step-by-step instructions regarding each process, please visit our dedicated transfer/rollover page.

Yes. Money spent on ineligible costs before age 65 is subject to income tax plus a 20 percent penalty. After you turn 65, you won’t pay the penalty, but the distribution will still be subject to income tax.

You can use HSA funds to pay for Medicare premiums, including Medicare Part B, which covers outpatient care, and Part D, which covers prescription drugs. (Most people don't pay premiums for Part A.) You can't, however, use the funds for premiums for supplemental, or Medigap, policies.

Flexible Spending Account FAQs

  • Employees set aside funds on a pre-tax basis each year into their Flexible Spending Account (FSA) and subsequently access those funds for IRS-qualified healthcare expenses incurred within the Plan Year.

  • Using an FSA is great way for employees to stretch their benefit dollars. Employees use before-tax dollars in their FSA to reimburse themselves for eligible out-of-pocket medical and dependent care expenses. That means they can enjoy tax savings and increased take-home pay by reducing FICA taxes. And that makes real sense.

  • With an FSA, employees elect to have their annual contribution (within IRS and plan limits) deducted from their paycheck each pay period, in equal installments throughout the year, until they reach the yearly maximum they have specified. The amount of their pay that goes into an FSA will not count as taxable income, so they will have immediate tax savings by reducing FICA taxes.

  • FSA dollars can be used during the plan year or grace period, if applicable, to pay for IRS-qualified expenses and services.

  • Employees can roll over up to $550 of their contribution to the next plan year depending on employer plan design selection.

A Healthcare FSA allows reimbursement of qualifying out-of-pocket medical expenses. Common eligible expenses include dental treatment, orthodontia, prescription drugs, diagnostic services, hospital services and surgery, laboratory fees, obstetrical expenses, chiropractic care, physical therapy, eye examinations, glasses, contact lenses, laser eye surgery, hearing aids, smoking cessation programs, and weight loss programs to treat obesity, to name a few.

A Limited Purpose Medical FSA works with a qualified high deductible health plan (HDHP) and Health Savings Account (HSA). A limited purpose FSA only allows reimbursement for vision and dental expenses.

A Dependent Care FSA allows reimbursement of dependent care expenses, such as daycare, incurred by eligible dependents. A Dependent Care FSA provides pre-tax reimbursement of out-of-pocket expenses related to dependent care. This benefit may make sense if an employee (and spouse, if married) is working or in school, and:

  • Their dependent children under age 13 attend daycare, after-school care or summer day camp.

  • They provide care for a person of any age whom they claim as a dependent on their federal income tax return and who is mentally or physically incapable of caring for himself or herself.

With an FSA from HSA Bank, employees can:

  • Pay for IRS-qualified expenses with pre-tax dollars.

  • Enjoy significant tax savings with pre-tax deductible contributions and tax-free distributions.

  • Enjoy secure access to accounts using our convenient Member Website available 24/7/365.

  • Quickly and easily access funds with the HSA Bank Health Benefits Debit Card used at point of sale, or have funds directly deposited to a bank account through online distribution.

  • File claims easily online or via the mobile app, with approval determined based upon eligibility and availability of funds.

  • Store and view healthcare spending data in unique ways, to truly engage in management of the FSA account and be aware of the healthcare expenses they are experiencing over time.

  • Protect the environment by using paperless summaries available online and direct deposit for reimbursements.

A Healthcare FSA could save employees money if they or their dependents:

  • Have out-of-pocket expenses like co-pays, coinsurance, or deductibles for health, prescription, dental or vision plans

  • Have a health condition that requires the purchase of prescription medications on an ongoing basis

  • Wear glasses or contact lenses or are planning LASIK surgery

  • Need orthodontia care, such as braces, or have dental expenses not covered by your insurance

Health Reimbursement Arrangement FAQs

Health Reimbursement Arrangements (HRAs) provide an effective way for your business to reduce its employee healthcare costs without reducing employee benefits. If you’re looking to change or expand your employee healthcare options, HSA Bank has your HRA solution. Benefits for your organization:

  • Save money with lower insurance premiums for employees with high deductible health plans.

  • Free Human Resources staff with a centralized Employer Administration website to help manage your plan.

  • Save administrative time with an HRA solution that accepts plan changes from payroll systems and handles a wide variety of HRA plan designs, including deductible, coinsurance, and copayment design options.

  • Go green with direct deposits and the elimination of manual, paper-based claims processes.

  • Offer an employer contribution amount in annual, monthly or custom accruals.

  • Offer flexible benefit options to meet every situation with the ability to stack an HRA with an FSA.

  • Vary your funding amounts based on your employees’ qualifying tiers.

  • Customize eligible expenses and reimbursement amounts.

Our HRA solution will:

  • Give you a choice of several HRA plan designs, such as HRA with individual/family deductible, HRA with copayments for specific expense types, HRA with percentage payouts, or HRA with embedded deductible.

  • Allow you to manage HRA funding, schedules, and reimbursement rules within the interface and allow for tiered funding (individual, individual + spouse, etc.), custom funding schedules, and individual/member maximums.

  • Accept wellness incentive contributions into an HRA to further employee engagement in their healthcare.

  • Recognize significant tax savings with pre-tax, deductible funding and tax-free distributions used for IRS-qualified plan expenses.

  • Quickly and easily access funds with the HSA Bank Health Benefits Debit Card used at point of sale, or have funds directly deposited to a bank account.

  • Enjoy secure access to accounts using a convenient Member Website available 24/7/365.

  • Easily file claims online or via the mobile app with the system determining approval based on eligibility and availability of funds.

  • Stay up-to-date on balances and any actions required with automated email alerts, convenient member home page messages, and access to account balance information via your mobile devices.

  • Get one-click answers to your benefits questions.

  • Protect the environment by using paperless summaries available online.

Stacked Card FAQs

The key to a successful Consumer-Directed Health Plan is simplicity of use. As a primary tool to make transactions easier for plan participants, HSA Bank offers a Stacked Card — one card that can be used to pay for medical-related expenses across all accounts. A stacked card can be used in conjunction with Health Savings Accounts (HSAs), Health Reimbursement Arrangements (HRAs), and Flexible Spending Accounts (FSAs).

A stacked payment card uses IRS-approved solutions to substantiate the eligibility of purchases or payment for services using five different automatic technologies. This process of approving transactions is called auto-substantiated, or A-S, and is critical in that the IRS requires that 100% of FSA and HRA transactions be substantiated. A high A-S rate is the single biggest success factor for any benefit card program.

Though the process can be technical, basically data from a transaction is run through the five technologies that will recognize eligible purchases while separating them from non-eligible purchases. The stacked card can then be used to pay for eligible purchases while the participant can use an alternate method of payment for non-eligible purchases. The various technologies can compare data to pharmacy benefit managers, inventory information approval systems, retrospective data matching based on previous payments and adjudicated claims from carriers, copayment matching and recurring expense logic. Under the latter, once a transaction has been substantiated once, transactions for the same amount in the same setting are substantiated once and do not require another review.

In the event the transaction is not auto-substantiated, the participant (who uses the Stacked Card with an FSA or HRA) will receive a series of 3 notifications starting 5 days after the transaction. If documentation is not received, the claim is denied and the consumer is sent a letter asking them to repay the plan. The participant can upload documentation on the Member Website, via mobile app or fax/mail. Every effort is made to avoid debit card suspension. However debit card usage will be temporarily suspended until the transaction has been satisfied with either documentation or manual claim.

The HSA Bank stacked card allows for participants to pay for health care-related expenses from several accounts using one special purpose or Visa®. Availability of the card has been proven to increase participation in benefit programs such as HSAs, FSAs and HRAs. In fact, 62% of cardholders reported that the availability of a card tied to these accounts influenced their decision to sign up. Because money deposited in these accounts by employees is submitted pre-tax, there is savings to employers in FICA contributions. It is also an employee benefit that is viewed favorably by associates.

Convenience and simplicity. A stacked card from HSA Bank is a special purpose or Visa® that allows for seamless transactions that are auto-substantiated and charged to the proper account automatically, according to priorities set by the plan. It also provides a convenient payment method by eliminating the need for reimbursement and the hassle of filing claims. One card, one payment method, zero hassles.

Transactions made using an HSA Bank stacked card deliver an 85-95% auto-substantiation ratio—among the highest in the industry—which decreases paperwork and increases member satisfaction.

  • Our toll-free Customer Service number and website are on the back of the card for convenient consumer support.

  • The employer's name can be included under the participant's name (within Guidelines).