FAQs about HSAs

Frequently Asked Questions About Health Savings Accounts


  • What is a Health Savings Account?
  • What is so good about these Health Savings Accounts?
  • As an employer, how do I benefit from incorporating Health Savings Accounts into my practice or business?
  • What is the tax treatment for employers?
  • What is the tax treatment for employees?
  • Who benefits most from HSAs?
  • Is the Health Savings Account more costly than traditional plans?
  • Who owns the Health Savings Account?
  • Who funds the Health Savings Account?
  • As an employer, how do I learn more about these Health Savings Accounts and if they are right for my business?
  • Do I fund an HSA with pre or post tax dollars?
  • How much can I set aside in an HSA?
  • Does an HSA earn interest?
  • Can HSA funds be invested?
  • Can the unused amounts in the savings account "roll over" to the next year?
  • What are some of my options regarding the funds in my Health Savings Account?
  • Can I use my HSA fund to pay for dental and vision expenses?
  • Will I be able to use my Health Savings Account to pay for alternative medical procedures?
  • Will I have medical coverage in case of a major catastrophe?
  • Can HSA funds be withdrawn at any time?
  • Do my HSA contributions affect my IRA contributions?
  • If I set up HSA through my current employer, can I take it with me when I switch jobs?
  • Can I tell my employer about HSA's?
  • What is a Health Savings Account?

    A Medical or Health Savings Account Insurance Plan consists of a high deductable major medical insurance policy in combination with a tax deferred, tax favored savings account that can be used for qualified medical expenses that may not normally be covered by traditional insurance plans. To /files/includes/top.css

    What is so good about these Health Savings Accounts?

    • Tax benefits and lower costs for both the employer and the employee
    • Freedom to choose services you want (Must follow guidelines)
    • Earn tax free interest
    • Freedom to plan for anticipated health expenses
    • Manage your own health care expenses
    • Take responsibility for health and wellness  To /files/includes/top.css

    As an employer, how do I benefit from incorporating Health Savings Accounts into my practice or business?

    There are huge savings in premiums as well as tax benefits.  See Employer Benefits

    To /files/includes/top.css

    What is the tax treatment for employers?

    Employer contributions are excludable from income for tax purposes.  It is a payroll deduction and is not subject to employer FICA and other employment taxes.  It is advisable to contact a qualified tax advisor before making any decision regarding tax issues.To /files/includes/top.css 

    What is the tax treatment for employees?

    Employee contributions are tax deductable.  Account distribution is tax free as long as funds are spent on health care defined under 213(d) of IRS Code.   It is advisable to contact a qualified tax advisor before making any decision regarding tax issues.    To /files/includes/top.css

    Who benefits most from HSAs?

    Health savings accounts are not just for the healthy or the wealthy. HSAs and qualified high-deductible health plans can work for anyone, regardless of their income or the state of their health. HSAs are the best financial vehicle to save for retirement, pay for current medical  expenses, and  even pay for long-term health.  To /files/includes/top.css

    Is the Health Savings Account more costly than traditional plans?

    No. Health Savings Accounts generally have a much lower premium than traditional insurance plan premiums.  To /files/includes/top.css

    Who owns the Health Savings Account?

    The member owns the account, regardless of who contributes. The money earns interest and returns over time.   To /files/includes/top.css

    Who funds the Health Savings Account?

    HSAs can be funded with pre-tax dollars by the member, their employer, or a third party.  To /files/includes/top.css

    As an employer, how do I learn more about these Health Savings Accounts and if they are right for my business?

    Fill in the contact form and a representative who is fully qualified to answer all your questions will be in contact with you to discuss your particular needs and concerns.   To /files/includes/top.css

    Do I fund an HSA with pre or post tax dollars?

    If your employer offers a high-deductible health insurance policy, you may be able to make pretax contributions, like a flexible-spending account. If you open an individual HSA, your contributions will be deductible when you file your taxes, even if you don’t itemize.   To /files/includes/top.css

    How much can I set aside in an HSA?

    Participants can contribute as much as they feel they need up to certain limits; $2,850 for individuals and $5,650 for families. The contributions may change according to federal law. To /files/includes/top.css

    Does an HSA earn interest?

    Yes. Best of all, the interest accumulates tax-free.  To /files/includes/top.css

    Can HSA funds be invested?

    Yes, in stocks, bonds, mutual funds, CDs, and annuities.  To /files/includes/top.css

    Can the unused amounts in the savings account "roll over" to the next year?

    Yes.  The individual owns the account and any contributions made into it.  It will "roll over" into the next year. To /files/includes/top.css

    What are some of my options regarding the funds in my Health Savings Account?

    You can use those funds to pay for your deductable, for services and products not normally covered by traditional plans.  See IRS Code 213(d) for qualifying expenses.  Vision and dental (braces included) Pay insurance premiums for Long-Term Care. Save for future, anticipated health care expenses.  Save for retirement's health care expenses.  To /files/includes/top.css

    Can I use my HSA fund to pay for dental and vision expenses?

    Yes, these are considered to be eligible expenses.  Funds can accumulate over time allowing you to pay for those larger dental expenditures such as implants, crowns and bridges, periodontal surgery and even some cosmetic procedures.  To /files/includes/top.css

    Will I be able to use my Health Savings Account to pay for alternative medical procedures?

    Yes. You may use your savings account for many services that are not normally covered by traditional plans such as acupuncture, chiropractic, and nutrition. To /files/includes/top.css

    Will I have medical coverage in case of a major catastrophe?

    Yes.  Once your deductable is met, the major medical portion of the health plan will be activated.  To /files/includes/top.css

    Can HSA funds be withdrawn at any time?

    Yes, as long as they're used to pay qualified medical expenses the money is not taxed at the federal level. If money is withdrawn before age 65 for other expenses, the regular tax rate would apply as well as a 10 percent penalty. After age 65, there are taxes but no penalty regardless of how the money is used.  To /files/includes/top.css

    Do my HSA contributions affect my IRA contributions?

    No. Your HSA contributions won’t affect your IRA limits - $4,000 per year or $4,500 for those over 50. It’s just another tax-deferred retirement savings account.   To /files/includes/top.css

    If I set up HSA through my current employer, can I take it with me when I switch jobs?

    You can keep your HSA account money even after you leave that job, similar to a 401(k). Another benefit of HSAs is that if you are unemployed or laid off and are collecting State or Federal unemployment insurance, you can use funds from your Health Savings Account to pay for your health insurance premiums and for your routine health expenses - all tax-free. To/files/includes/top.css

    Can I tell my employer about HSA's?

    Absolutely. Advise him/her of the information you have received and your desire to enroll in an HSA.  Direct your employer to this website and have them fill out the information form through this link Interested in HSAs? A qualified representative will contact your employer to see if HSA's are a right choice. To /files/includes/top.css

      For More Information About HSAs

    Home Page |  Insurance Solutions | Employee E-Books | About Us | Contact Us

    Copyright © 2008 OraMedica International, LLC All Rights Reserved