Health Savings Account (HSA)
What is an HSA?
An HSA is a benefit that allows you to choose how much of your paycheck you’d like to set aside, before taxes are taken out, for healthcare expenses OR use as a retirement savings tool. Think of your HSA as a personal savings account. Any unspent money in your HSA remains yours, allowing you to grow your balance over time. When you reach age 65, you can withdraw money (without penalty) and use it for anything, including nonhealthcare expenses. The HSA’s unique, triple-tax savings means the money you contribute, earnings from investments and withdrawals for eligible expenses are all tax-free, making it a powerful savings and retirement tool.
What does it cover?
There are thousands of eligible items, including:
- Copays and/or Coinsurance
- Doctor visits and surgeries
- Over-the-counter medications (first-aid, allergy, asthma, cold/ flu, heartburn, etc.)
- Prescription drugs
- Dental and orthodontia
- Vision expenses (frames, contacts, prescription sunglasses, etc.)
NOTE: You must be enrolled in a High-Deductible Health Plan (HDHP)in order to enroll in the HSA.
You’re NOT eligible for an HSA if:
• You’re claimed as a dependent on someone else’s taxes.
• You’re covered by another plan that conflicts with the HDHP, such as Medicare, a Medical Flexible Spending Account (FSA) or select Health Reimbursement Arrangements.
• You or your spouse are contributing to a Medical FSA.
Contributions -
Tax-free contributions to your HSA can be made in a variety of ways, including:
1. Pre-tax payroll contributions, if available through your employer.
2. Online Portal Contributions — Contribute funds directly to your HSA from your personal Checking/Savings account
3. Transfer Monies - If you have an existing HSA elsewhere, you are able to transfer those monies to your Keystone HSA once established under your Employer's group plan
Distributions -
Distributions from your HSA are used to pay for qualified plan expenses. This can be done using the following methods:
1. Paying for eligible services using your plan sponsored Debit Card (if applicable).
2. Requesting a Distribution to your bank account directly through your online portal to pay the Provider
3. Requesting a Distribution via manual check through your portal or by manual form (additional fees will apply for manual check processing).
Need help planning for how much to set aside in your HSA? Visit our HSA Planner Link:
**Please check with your employer to see what plans are offered to you.**
