Frequently Asked Questions
To help you better understand your Health Savings Account, we have provided answers to some frequently asked questions.
Questions on HSAs and Medicare?Q & A HSA and Medicare
What is a Health Savings account (HSA)?
A health savings account (HSA) is an account you can put money into for future medical expenses.
How do I know if my health plan is a “qualifying” high-deductible health plan (HDHP)?
The minimum annual deductible for 2021 plans cannot be less than $1,400 for individual coverage or $2,800 for family coverage. For 2022 plans, the minimum annual deductible remains the same ($1,400 for individual coverage or $2,800 for family coverage).
- The maximum out-of-pocket expenses for 2021 plans are capped at $7,000 for individuals and $14,000 for families
- The maximum out-of-pocket expenses for 2022 plans are capped at $7,050 for individuals and $14,100 for families
Who can have a Health Savings Account?
Health Savings Accounts are easy to open, easy to use, and easy to maintain. You can open a Health Savings Account through your employer or on your own. It only takes a few minutes.
To be eligible to open a Health Savings Account, you must:
- Have coverage under an HSA-qualified high-deductible health plan (HDHP)
- Have no other medical coverage
- Not be enrolled in Medicare
- Not be claimed as a dependent on someone else’s tax return
How are Health Savings Accounts different from healthcare flexible spending accounts (FSAs)?
Both Health Savings Accounts and Flexible Spending Accounts allow you to pay for qualified medical expenses with pre-tax dollars. Unlike Flexible Spending Accounts, Health Savings Account balances can roll over from year to year.
Who can you use HSA funds for?
The funds in your HSA can be used to pay for qualified medical expenses incurred by you, your spouse, and your dependents.
My spouse’s employer provides low-deductible family coverage at no cost. I am covered under my spouse’s plan. If I enroll in my employer’s qualified HDHP, am I eligible for a Health Savings Account?
No, even though you are covered by an HDHP, since you are also covered by a low-deductible plan, you are not eligible for a Health Savings Account. Individuals covered by an HDHP only can contribute to a Health Savings Account.
Can my spouse and I have a joint Health Savings Account, like our regular checking account?
No, only one person can be named the account owner. If both you and your spouse have qualified HDHP coverage, you must each have your own account.
Can we set up a Health Savings Account for a minor dependent?
No, a minor dependent cannot open an Health Savings Account.
Can I have more than one Health Savings Account?
Yes, you can have more than one Health Savings Account, and you can contribute to them all as long as you are currently enrolled in an HDHP. However, this does not give you any additional tax advantages, as the total contributions to your accounts cannot exceed the annual maximum contribution limit.
Who can contribute to my Health Savings Account?
Contributions to a Health Savings Account can be made by you, your employer, a family member, or practically anyone else.
Are there restrictions on contributions?
The total contributions cannot exceed the IRS limits:
- In 2023, the individual limit is $3,850 and $7,750 for families
- In 2024, the individual limit is $4,150 and $8,300 for families
- Catch up contribution limits for account holders who ages 55 and older are $1,000 for individuals and $1,000 for families
Are my contributions tax-deductible?
Your contributions are tax-deductible, even if you do not itemize deductions.
How can I make contributions to my Health Savings Account?
Employees and employers can use the following methods to make contributions to Health Savings Accounts:
- Direct deposit
- Online banking
Can I contribute stock to my Health Savings Account?
No, only cash can be contributed to your Health Savings Account.
Can I contribute if I no longer participate in an HDHP or participate in Medicare?
No, you nor anyone else are allowed to make contributions to your Health Savings Account if you leave your HDHP or when you become enrolled in Medicare or another medical insurance plan. However, you can continue to use your Health Savings Account to pay medical expenses.
How do I pay medical bills before my Health Savings Account is funded?
Pay with alternate funds and reimburse yourself when your Health Savings Account is funded.
Can I reimburse myself for old medical bills?
You can only reimburse yourself for bills you incurred after your Health Savings Account was opened.
How do Veteran’s Administration (VA) health benefits impact the Health Savings Account?
If the employee has received VA health benefits in the past three months, he/she cannot open a Health Savings Account.
Is there a deadline for me to use my Health Savings Account funds?
No, the account is yours, and unused funds will roll over year after year. Even if you change jobs or health plans, you can still use the funds in your Health Savings Account to pay medical expenses. When you retire, you can keep the money in your account and use it to pay for medical expenses tax-free.
Can I invest my Health Savings Account funds?
Yes, once your account reaches a balance of $1,000, you will have the option to enroll in a self-directed investment portal within your online account. View the investment options here.
What happens to my Health Savings Account if I become disabled?
If you become disabled and enroll in Medicare, contributions to your Health Savings Account must stop. You may use your Health Savings Account funds to pay Medicare Part A and/or B premiums. Payment of these Medicare premiums is a qualified expense and a tax-free distribution. Distributions from your Health Savings Account used for non-qualified expenses will be subject to ordinary income tax but exempt from the 20 percent penalty.
What happens to my Health Savings Account when I die?
Your Health Savings Account is an inheritable account. You have the ability to name your beneficiaries.
What tax forms will I receive to include with my annual tax filings?
The institution holding your account will send the appropriate year-end form(s) to you with instructions regarding the forms’ use and requirements for filing your annual tax return.
- Form 5498-SA notifies the IRS of contributions made to your Health Savings Account during the tax year
- Form 1099-SA notifies the IRS of distributions made from your Health Savings Account during the tax year
What is a routing number?
A routing number is a 9-digit numeral that identifies a specific financial institution in a transaction such as check processing, electronic funds transfers, and online banking. This number is different from your account number.
What is Avidia Bank’s routing number?
Avidia Bank’s routing number is 011375384.