{"id":202,"date":"2019-09-11T15:14:29","date_gmt":"2019-09-11T19:14:29","guid":{"rendered":"https:\/\/seidenbenefits.com\/News\/?p=202"},"modified":"2022-08-18T16:59:54","modified_gmt":"2022-08-18T20:59:54","slug":"health-savings-accounts-hsas","status":"publish","type":"post","link":"https:\/\/seidenbenefits.com\/News\/health-savings-accounts-hsas\/","title":{"rendered":"Health Savings Accounts (HSAs)"},"content":{"rendered":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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What is an HSA?<\/b><\/p>

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Tax-exempt account that can be used to pay or reimburse employees for certain medical expenses.<\/p>

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What are some advantages of an HSA?<\/b><\/p>

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  • HSAs make an employer’s benefits package more attractive by helping employees pay out-of-pocket medical expenses in a tax-advantaged way.<\/li>\n
  • Employer contributions to employees’ HSAs are generally deductible business expenses.<\/li>\n
  • All compliant HSA contributions are tax-exempt for the employee.<\/li>\n<\/ul>\n

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What expenses can HSA funds be used to pay?<\/b><\/p>

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Most medical, dental, vision, and prescription drug expenses, but not most group or individual insurance premiums. Please read IRS Publications\u00a0969<\/a>\u00a0and\u00a0502<\/a>\u00a0for more information.\u00a0<\/p>

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Which employees can have an HSA?<\/b><\/p>

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Employees must be covered under a high deductible health plan (HDHP) to contribute to or establish an HSA.\u00a0For 2019, an HDHP is a plan with:<\/p>

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  • A deductible more than $1,350 for self-only coverage or $2,700 for family coverage ($1,400 and $2,800, respectively, in 2020); and<\/li>\n
  • Out-of-pocket expenses less than $6,750 for self-only coverage or $13,500 for family coverage ($6,900 and $13,800, respectively, in 2020).\u00a0\u00a0<\/li>\n<\/ul>\n

    In addition, employees generally must\u00a0not<\/b>\u00a0be:<\/p>

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    • Enrolled in any other plan but the HDHP;\u00a0<\/li>\n
    • Enrolled in Medicare; or<\/li>\n
    • A dependent on someone else’s tax return.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
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Who can contribute to an employee’s HSA?<\/b><\/p>

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Anyone.<\/p>

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How much can be contributed to an HSA?<\/b><\/p>

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For 2019, the limit on all contributions for individuals with self-only HDHP coverage is $3,500 ($3,550 for 2020). For individuals with family HDHP coverage, the limit is $7,000 ($7,100 in 2020). These limits are $1,000 higher for individuals age 55 or older at any time during the year.<\/p>

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Can employees carry over HSA funds from year to year?<\/b><\/p>

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Yes.<\/p>

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Is an HSA portable for the employee?<\/b><\/p>

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Yes.<\/p>

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What HSA requirements must an employer satisfy?<\/b><\/p>

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If contributing to employees’ HSAs through a cafeteria plan, the employer must satisfy certain\u00a0cafeteria plan nondiscrimination rules<\/a>. All contributions to employees’ HSAs outside of a cafeteria plan must be made on a comparable basis to all comparable participating employees. Comparable contributions must be either:<\/p>

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Can employers contribute to employees’ HSAs without also offering a group health plan?<\/b><\/p>

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Yes, as long as those employees are eligible to have an HSA. See\u00a0“Which employees can have an HSA?”\u00a0<\/b>above.<\/b><\/p>

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Is an HSA subject to COBRA? \u00a0<\/b><\/p>

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\u00a0\u00a0\u00a0<\/b><\/p>

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No.<\/p>

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Where can I learn more about HSAs?<\/b><\/p>

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