What is a Health Savings Account (HSA)?
This is a fringe benefit, which creates a bank account, owned by the HSA member and is usually an individual or an employee. Once the account is open, pre-tax or post-tax contributions can be made (as long as a compatible high deductible health plan is linked to the member and account) and used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent.
If contributions have been made to the account and the high deductible health plan (HDHP) is no longer active, the monies in the account can still be used to pay for eligible
expenses, but new contributions cannot be made until another HDHP is linked to the member account. For a complete list of Eligible Expenses, please visit IRS.gov
If contributions have been made to the account and the high deductible health plan (HDHP) is no longer active, the monies in the account can still be used to pay for eligible
expenses, but new contributions cannot be made until another HDHP is linked to the member account. For a complete list of Eligible Expenses, please visit IRS.gov
| Who is eligible? A member must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance except for permitted insurance listed under section 223(c)(3). In addition, a member is not eligible if he or she can be claimed as a dependent on another person's tax return.
An employee's participation in a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) may limit or exclude the individual (and employer) from making contributions to his or her HSA, unless it is a limited-purpose FSA, post-deductible FSA or some HRA plan types. Discrimination Rules ApplyA member may contribute to an employee's HSA using a cafeteria plan and the contributions are not subject to the statutory comparability rules. However, cafeteria plan nondiscrimination rules still apply.
Check out our Comparison on HRA vs. FSA vs. HSA Plans
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