Sera shares answers to frequently asked questions about HSAs and how they can be the key to keeping your wallet and family healthy with a high-deductible health plan.
Q: Why are HSAs growing in importance and popularity?
As healthcare costs continue to increase, so do insurance premiums making affordability more of a challenge for both employers and employees. As a result of these increasing costs, more people and organizations are turning to high-deductible health plans to control expenses.
One of the main features of those plans is the ability to put away dollars tax-free into a Health Savings Account for future medical expenses. Even better, employers are seeing the importance of HSA’s and many are contributing to their employees’ accounts as part of the benefits plan.
Q: What makes OlyFed’s HSAs special?
When you open an HSA with OlyFed there is no monthly service fee, no minimum balance, free digital services (online and mobile banking), free checks, and a free HSA dedicated debit card all to help you better manage your account. Even better your account comes with the care, expertise and support of a personal banker who can help you get started with just a dollar.
Q: How much can I contribute to my HSA each year?
This Year (Jan. 1-Dec. 31, 2020): Individuals with a high deductible health plan (deductibles no less than $1,400) can contribute up to $3,550. An individual with family coverage under a qualifying high-deductible health plan (deductible no less than $2,800) can contribute up to $7,100.
Next Year (Jan. 1-Dec. 31, 2021): Individuals with a high deductible health plan (deductibles no less than $1,400) can contribute up to $3,600 (up $50 from 2020). An individual with family coverage under a qualifying high-deductible health plan (deductible no less than $2,800) can contribute up to $7,200 (up $100 from 2020).
Catch-Up Provision: Don’t forget, if you are age 55 or older, you can contribute an additional catch-up contribution of $1,000 per year. If your spouse is also 55 or older, he or she may establish a separate HSA and make a catch-up contribution to that account.
Q: How can I use the funds in my HSA?
Funds from your HSA account can be used for qualified medical expenses like medical procedures, hospital bills, prescription drugs, vision care, and dental treatments for yourself, spouse/partner and dependents.
It’s important to remember that what’s considered a qualified medical expense is always subject to change by the IRS so if you’re on the fence about an expense, make sure to check with them for the most up-to-date list.
Q: What are the tax benefits of an HSA?
HSAs are one of the most tax-efficient savings vehicles around. You can contribute pre-tax dollars, pay no taxes on your interest earnings and withdrawals for qualified medical expenses are tax-free whether they occur now or in retirement. Be sure to consult your tax-advisor for more details.
Q: What happens to the money in my HSA if I don’t spend it?
Unlike most Flexible Spending Accounts (FSA’s), the money you contribute to your HSA is allowed to stay in your account year-to-year and earn interest tax-free. Even better, if you switch employers or retire your money stays with you. There are no “use it or lose it” rules with HSAs. Once you contribute funds, it’s your money to use, whenever its needed.
Our team of bankers are locals like you and we have the expertise and knowledge to help you and your family create a healthy financial future. One of our core values is a commitment to life-long learning, which is why we invest in financial education for both our customers and the community. In fact, we have a dedicated Health Savings Professional, Sera Belt, who is here to answer your HSA questions and get your account set up to meet your needs.