Tax-advantaged:

• Contributions you may make through payroll deposits are made with pretax dollars, meaning they are not subject to federal (or state, for most states) income taxes.
• Contributions to your HSA made with after-tax dollars can be deducted from your gross income, meaning you pay less income tax at the end of the year.
• The interest you earn on your HSA balance is not taxed. – Withdrawals from your HSA for qualified medical expenses are not subject to federal income tax. As long as you use your HSA funds for qualified medical expenses, you will not have to pay federal (or state, for most states) income taxes. – Employers may make contributions to your account; these contributions are excluded from your gross income.

Flexible:

• The money is yours; it grows and remains with you, even when you change medical plans, change employers or retire. There are no “use it or lose it” rules. Even if you are no longer eligible to make contributions, funds in your account may still be used to pay for qualified medical expenses tax-free. And after age 65, or in cases of disability, the funds in the account can be used for nonqualified expenses.

Portable:

• Accounts move with you when you change medical plans, change employers or retire.
• Savings mechanism for future health needs: – Unused funds can grow through interest and investment earnings and can be “banked” for future medical expenses.

Contributions can come from multiple sources:

• As long as you are covered by a qualified HDHP, you, your employer, family members, or anyone else may contribute to your HSA up to the maximum annual contribution limit.

 There are no tax penalties for closing an HSA. However, if you use HSA funds for other than qualified medical expenses, those distributions will be subject to ordinary income tax, and in some cases, a 20 percent penalty.

• Your HSA funds can be used tax-free to pay for out-of-pocket qualified medical expenses, even if the expenses are not covered by your HDHP. This includes expenses incurred by your family.
• There are hundreds of qualified medical expenses, including many you might not expect: over-the-counter medications; dental visits; orthodontics; glasses; long-term care insurance premiums; cost of COBRA coverage; medical insurance premiums while receiving federal or state unemployment compensation and post age-65 premiums for coverage other than Medigap or Medicare supplemental plans.
• In addition, HSA funds may be used to pay your Medicare Parts A and B premiums and for employer-sponsored retiree plans.
• All of these expenses may be paid for with your HSA funds, free from federal taxes or state tax (for most states). Refer to IRS Publication 502 for a more complete list of qualified medical expenses.

You may withdraw the excess amount and any earnings on the excess amount prior to April 15th of the following year. However, you must pay income tax on your excess contributions and income tax on any earnings of the excess contribution. If you believe you have exceeded your allowable contribution amount, you should contact us at 855-890-7239 to help you correct the over contribution.