November 26, 2019 - Health Savings Accounts (HSAs)

Some important facts about HSAs:
• In order to qualify for an HSA, you must have a High Deductible Health Plan (HDHP).
• What is a HDHP? It’s a plan whose minimal deductible is $2800/1400 (family/self) and the max out of pocket cost is $6,900/$13,800 (family/self).
• Preventive care can be covered dollar-for-dollar out of the HDHP even if the deductible is not met.
• In 2020, the max contribution is $3,550 for an individual and $7,100 for a family. If you’re born before 1966, you can contribute an additional $1,000.
• If you’re enrolled in Medicare, you CANNOT contribute to an HSA. If you contributed the funds already, you can use it to pay Medicare premiums.
• Earnings build up tax free and withdrawals used for medical expenses are also tax-free.
• Most importantly – yes – HSA funds DO roll-over year to year if you don’t use them in a given year.
• Don’t mix them up with Flexible Spending Accounts (FSAs) which DO NOT roll over. Some employers allow you to roll over a maximum of $500 per year. These are use-it or lose-it type plans. FSAs are ALSO used to pay for medical expenses. The difference is – HSAs are owned by you and FSAs are owned by your employer.
• Here is a great comparison of the difference between an HSA and FSA account: https://www.valuepenguin.com/…/difference-between-fsa-and-h…
• There are 3 new proposals in Congress now: 1) to allow HSAs to cover the cost of menstrual products and over-the-counter drugs, 2) covering the cost of inhalers with no deductible and 3) permitting people with subscriptions to primary care be eligible for an HSA.