What is a Health Savings Account?
A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying or reimbursing qualified medical expenses for you, your spouse, and your dependents.
Am I Eligible for an HSA?
You are eligible to make or receive an HSA regular contribution if, with respect to any month, you:
- Are covered under a high-deductible health plan (HDHP) on the first day of such month;
- Are not also covered by any other health plan that is not an HDHP (with certain exceptions for plans providing preventive care and limited types of permitted insurance and permitted coverage);
- Are not enrolled in Medicare; and
- Cannot be claimed as a dependent on another person’s tax return.
What are an HSA Owners Responsibilities?
If you are eligible, you can establish an HSA in much the same way you would establish an IRA – with a qualified trustee or custodian. Each year, you are responsible for determining your allowable annual HSA contribution and whether you have qualified medical expenses eligible for reimbursement with nontaxable HSA distribution.
Who Can Contribute to My HSA?
If you meet the eligibility requirements for an HSA, you, your employer, your family members and any other person (including non-individuals) may contribute to your HSA. This is true whether you are self-employed or unemployed.