Post on 24-Dec-2015
Optional Health Care PlanH S A Q&AFall 2013
A Qualified High Deductible Health Care Plan (QHDHCP)
with a Health Savings Account (H S A)
Optional Plan – H S A Q&A
Are employee contributions pre-tax?
A: Yes, up to the IRS maximum
Note: Employees over age 55 may make catch-up contributions
Optional Plan – H S A Q&A
How much can I contribute to my H S A?
A: In 2014:
Single individual $3,300
Family $6,550
55+ catch up amount $1,000
Optional Plan – H S A Q&A
Is there a deadline for H S A contributions?
A: Contributions for current taxable year may be made until April 15 of following taxable year
Optional Plan – H S A Q&A
Can money be taken out of the H S A at any time?
A: Yes, tax free to pay qualified medical expenses
Note: non-qualified expenses are taxable income and incur a 20% penalty
Optional Plan – H S A Q&A
What is a qualified medical expense?
A: Expenses that would generally qualify for IRS medical and dental expenses income tax deduction
Optional Plan – H S A Q&A
Whose medical expenses can the plan be used to pay?
A: Any family member reported as a dependent on your tax return
Note: If the family member is not covered under your plan, the expenses will not be applied to your deductible
Note 2: Adult children up to age 26 may qualify as a dependent for insurance purposes but cannot qualify for the H S A if they are not dependents on the parent’s tax return
Optional Plan – H S A Q&A
Who can put money into your H S A?
A: Anyone
Note: Only employee’s contribution is tax-free
Note 2: Only account holder may receive tax deductions
Optional Plan – H S A Q&A
Is the account balance FDIC insured?
A: Yes, except for funds in investments
Optional Plan – H S A Q&A
What are the tax benefits of the H S A?
A: There is triple tax savings•Contributions are not taxed and reduce your taxable income•Withdrawals are not taxed•Earnings are not taxed
Optional Plan – H S A Q&A
What happens to unused funds at the end of the year?
A: Funds are rolled over year to year without penalty
Optional Plan – H S A Q&A
Can I rollover my HRA funds into the H S A?
A: A one-time rollover can be made by the employer
Note: The rollover does not affect the annual limit for H S A contributions
Optional Plan – H S A Q&A
Are there other ways to fund the H S A?
A: A one-time rollover may be made from a Roth IRA to the H S A
Note: The transfer is limited to the H S A maximum annual contribution for that year
Optional Plan – H S A Q&A
Can married couples who are employees have different coverage?
A: Yes, but if one employee elects an FSA the other cannot elect an H S A
Optional Plan – H S A Q&A
Can an employee participate in the H S A with a spouse covered under a different employer’s plan?
A: Yes, as long as the spouse does not participate in an FSA
Note: a limited scope FSA, such as for vision/dental benefits only, is permitted
Optional Plan – H S A Q&A
Can employee and spouse access H S A funds if spouse has coverage with a different employer?
A: Yes, a spouse would be considered a dependent as long as the spouse is a dependent for tax purposes
Optional Plan – H S A Q&A
What happens if employee leaves job or retires?
A: Since the account is portable, you take it with you wherever you go
Note: Must have HDHP to continue to make contributions to H S A
Optional Plan – H S A Q&A
What if I die?
A: The beneficiary receives the H S A account to continue use as an H S A if it is a spouse
Note: If the beneficiary is not a spouse the value of the H S A is taxable to the beneficiary or estate
Optional Plan – H S A Q&A
How do I access the H S A account?
A: A debit card will be issued to pay providers directly
Also, expenses may be submitted for reimbursement after the provider bills you
Optional Plan – H S A Q&A
What happens if my H S A account does not have enough funds to pay a bill?
A: The account will not issue funds prior to deposit of funds
Note: Scheduled payments can be set up to the provider from the H S A
Optional Plan – H S A Q&A
Should I pay the doctor at the time of service if my deductible is not met?
A: Your bill may be sent by the provider to the insurance company first for repricing. Then it will be returned to you for payment at the discounted rate.
Note: The provider may require partial or full payment up front
Optional Plan – H S A Q&A
How will I track my H S A funds?
A: The H S A administrator will make a periodic statement available to you