Health Savings Accounts (HSAs)
- What is an HSA and how does it work?
- A health savings account (HSA) is a tax-advantaged account that works in conjunction with an HSA-eligible health plan that meets IRS guidelines and allows the participant to save tax-free money for eligible medical expenses. Money in an HSA rolls over year after year and is owned by the participant even if they change jobs or health plans.
- How do employees save on taxes with an HSA?
- Account holders receive a "triple tax benefit":
- Is a debit card available?
- Yes. A Visa® debit card is available for eligible medical expenses, and can be used at the point of purchase or after care.
- What are the IRS guidelines the health plan must meet?
- An HSA can only be opened with a health plan that meets the following IRS rules:
Minimum annual deductible
An individual (embedded deductible) on a family policy cannot be less than the minimum family deducible amount listed established by law
The maximum for the health plan cannot exceed these amounts
- You cannot be claimed as a tax dependent by someone else
- You cannot be enrolled in Medicare or Tricare.
- You cannot be covered under a health plan (as an individual, spouse, or dependent) that is not an HDHP
- If you are also covered by a medical flexible spending account (FSA), it must be a limited FSA, covering only vision and dental expenses.
This applies even if the FSA is in your spouse's name.
- If you are also covered by a health reimbursement arrangement (HRA), it must be a limited HRA, covering only vision and dental expenses.
This applies even if the HRA is in your spouse's name.
- What expenses can be paid from an HSA?
- How is an HSA funded?
- Contributions to an HSA can come from the account holder, the employer, or both. The HSA contribution limits for individual or family health plans change annually and are as follows:
- What HSA investment options are available?
If desired, the account holder can leave the entire HSA balance at Capital Blue Cross, where it earns interest, or choose to invest a portion of it. Once an HSA base balance exceeds $1,000, the account holder can open a basic, self-directed investment account, which gives access to more than 30 no-load and load-waived pre-selected mutual funds. At least $1,000 must be kept in the base balance of the HSA account.
In addition, when the basic investment account balance exceeds $10,000, the account holder can open a self-directed brokerage investment account with Charles Schwab. This account allows access to more than 2,500 mutual funds from a variety of families, as well as stocks, bonds, and other investments.
- Do you have an FDIC-insured HSA plan?
- Yes, our Capital Blue Cross Select HSA plan is FDIC-insured.