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Health Savings Accounts (HSAs)

Straight Answers to Your Questions

Are HSAs right for you?


A Health Savings Account is an account available for those with a “High Deductible Health Plan” (HDHP). A smart way to pay for qualified medical expenses.

HSA Overview


A special, tax-sheltered savings account for medical bills.


Individuals who are covered by a qualified high deductible health insurance plan; not covered under other health insurance; not enrolled in Medicare; and not another person’s dependent are eligible for an HSA.


You make deposits into your HSA, and we’ll provide you a checkbook and/or debit card for you to pay qualifying expenses. You can contribute up to $3,500 if you have individual coverage or $7,000 if you have family coverage in 2019, plus an extra $1,000 if you’re 55 or older anytime during the year. 


HSAs allow you to make contributions and earn interest tax free, and your distributions are also tax free as long as they’re used for qualified medical expenses.



  • Use your HSA to help you pay for any qualified medical expense – from health insurance deductibles and co-payments to certain over-the-counter medications and out-of-pocket expenses.
  • Your employer doesn’t own your HSA, you do. So, if you change jobs it will still be with you.
  • Your balance rolls over from year to year, so what you don’t spend, you keep.


How does it work?

Q: Are unused amounts carried over to the next year? 

A: Yes

Q: Are earnings withdrawn tax free?

A: Yes, if they are for “qualified medical expenses” as defined by the IRS.

Q: What is a qualified medical expense?

A: Qualified medical expenses are a defined term created by the IRS and could include medical care, prescription drugs, and payment for long-term care.

Examples of qualified expenses are:

  • Acupuncture
  • Ambulance costs
  • Bandages
  • Birth control pills
  • Contact lenses
  • Crutches
  • Doctor visits
  • Some dental expenses
  • Vision care (eyeglasses, contacts, Lasik surgery)
  • Hearing aids
  • Lab fees
  • Prescriptions
  • X-rays

Please note some insurance premiums cannot be paid for by HSA funds. For a full list of eligible expenses, review IRS Publication 502.

Q: Does my money in my HSA earn interest?

A: Yes, and your earnings are tax free.

Q: What happens to the money if I die?

A: Your HSA would pass to your surviving beneficiary tax free. If you do not have a named beneficiary, the money is disbursed to your estate and is subject to any applicable laws.

Q: Can I use my HSA money for non-health-related expenses?

A: Yes, but the amount you withdraw will be subject to income tax and, if you are under 65 years old, an additional 20 percent tax penalty on the amount withdrawn.



Ready to talk?


Consult a tax advisor to discuss your financial situation.

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