Health Savings Account

Additional Information

• No monthly service fee
• A Health Savings Account allows members to save and pay for their health expenses on a tax-free basis
• HSA funds can be withdrawn to pay for “qualified medical expenses”, including dental and vision needs
• Spouses can establish their own HSA, if eligible
• Member cannot be covered by other health insurance
• Member cannot be enrolled in Medicare
• Member cannot be claimed as a dependent on someone else’s tax return
• Children cannot establish their own HSA
• Shares cannot be pledged
• If you are under age 65, withdraw dollars from your HSA and do not use them for qualified medical expenses, they will be taxed as ordinary income and you will also incur a 20 percent penalty.

Health Savings Account Qualified Expenses

The Health Savings Account can be used to pay for a wide range of medical and health related services. When you incur a medical or health related expense that is not covered by your insurance, there is a good chance that you can pay for it out of your HSA.

The IRS defines qualified expenses as: "Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes.

Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation. Medical expenses include all out of pocket expenses for medical care and the amounts you pay for transportation to get medical care. Medical expenses also include amounts paid for qualified long-term care services and can include insurance premiums (COBRA) if you are unemployed." Source: IRS.Gov