What is a Health Savings Account (HSA)?
A Health Savings Account works in conjunction with a High-Deductible Health Plan (HDHP). The account allows you to put money aside and reimburse yourself for medical expenses on a pre-tax deductible basis. Unspent funds accumulate tax free and roll over from year-to-year. (There is no “use it or lose it” rule as with flexible spending accounts.) An HSA gives you the freedom to spend the funds today or save them for the future. The HSA is your account. You own it. You fund it with out-of-pocket or excess Flex Credits contributions…and you can take it with you wherever you go.
How does an HSA work?
You withdraw funds on a pre-tax basis to pay for qualified healthcare expenses, as defined by Section 213(d) of the IRS Tax Code. If you use your HSA funds to pay for non-health related expenses, the amount will be taxable and you will pay an additional 20 percent tax penalty.
What are the Contribution Limits?
The 2017 maximum contribution amounts are:
• Employee only coverage: $3,400
• Employee + 1 or more coverage: $6,750
Catch-up Contributions – If you are age 55 or older, you can make an additional “catch-up” contribution of $1,000.
How Do I Start Saving in my HSA?
You must be enrolled in a High Deductible Health Plan in order to open an HSA account. The HSA is not established or administered by the County. You must set up your HSA. If you want to contribute to your HSA through payroll deductions, you must set up your HSA through Optum Bank.
Any excess Flex Credits will be routed /contributed to your HSA; therefore, you’ll need to open an account to access them.
For more information about how to set-up your HSA visit www.optumbank.com