Health Savings Accounts are plans individually owned that provide a tax advantage. You may contribute with tax free or tax-deductible funds and may use those funds to pay for health care expenses in the future that are deemed eligible. This may include expenses for not only you, but your spouse and tax dependents. To have an HSA you must have a correlating High Deductible Health Plan also known as HDHP.

Yes. Each year the IRS determines the maximum amount contributable to an HSA. The good news is that funds you don’t use within the plan will continue to roll over from year to year.

Yes, anyone can contribute to your HSA. This means you, your spouse, your employer, a family member or any other person can contribute with all contributions counting toward your annual limit.

Currently in 2018, contributions and earnings are tax free meaning no federal taxes are collected on the amount you contribute from your paycheck. As an additional bonus, the money your HSA earns is not subject to federal income tax either.

The following things must be adhered to in order for a person to open an HSA:

• You must have a qualified High Deductible Health Plan otherwise known as and HDHP.

• You cannot have secondary health coverage that pays for out of pocket expenses before you meet your deductible.

• You may not have a FSA or HRA in the same year

• Medicare or Tricare is not allowable

• No Veterans Administration health benefits may have been collected in the previous 3 months.

• You may not be claimed as a dependent on another tax return.

An HDHP has a higher deductible than most health plans. With this type of plan, you must first pay a deductible. Once you pay the deductible, then the health plan can pay a portion of your claims. To be HSA-eligible, a qualified HDHP must meet the following criteria.

1. Minimum Deductibles – A qualified HDHP must have minimum deductibles. If the plan has a deductible that’s lower than this minimum, it’s not a qualified plan for the HSA. For 2018, the minimum deductible amount for a self-only plan is $1,350. For a family plan, the minimum deductible is $2,700. Your plan may have a higher deductible.

2. Limit on Out-of-Pocket Expenses – A qualified HDHP limits what you pay out of pocket in the plan year. This limit includes what you would pay for deductibles, co-payments and co-insurance. Note: These limits apply to in-network services only. The limits don’t include what you pay for premiums, out-of-network services, expenses that the plan doesn’t cover, or amounts that exceed lifetime limits, if applicable.

3. Limit on Out-of-Pocket Expenses – A qualified HDHP limits what you pay out of pocket in the plan year. This limit includes what you would pay for deductibles, co-payments and co-insurance. Note: These limits apply to in-network services only. The limits don’t include what you pay for premiums, out-of-network services, expenses that the plan doesn’t cover, or amounts that exceed lifetime limits, if applicable.

An HDHP has a higher deductible than many other health plans and requires one to first pay the deductible. Once paid, the plan can pay a portion of your claims. To be HSA-eligible, a qualified HDHP must meet the following criteria:

• Minimum Deductibles – A qualified HDHP has stringent minimum deductibles. If the plan contains a deductible lower than minimum, it is not a qualifiable plan for an HSA. For 2018, the minimum deductible amount for a self-only plan is $1,350. For a family plan, the minimum deductible is $2,700.

• Limit on Out-of-Pocket Expenses – A qualified HDHP limits your out of pocket expenses in the plan year and includes what you would pay for deductibles, co-insurance, and co-payments, in your network. Limits do not include: premium payments, out of network services, and expenses not covered by the plan. For 2018, the out-of-pocket maximum for a self-only plan is $6,650. For a family plan, the maximum is $13,300.

• Preventive Care – A High Deductible Health Plan allows for covering preventive care while simultaneously meeting your deductible at 100 percent but may require a co-pay or co insurance be collected for certain services. However, even though the plan considers preventive care to be covered, it allows you to still have eligibility for an HSA. Preventive care includes annual health exams, routine prenatal and well-child care, child and adult immunizations, stop-smoking programs, weight-loss programs and certain screening services.

If you’re contributing to an HSA, you can’t have a regular health care FSA. However, you can have a Limited Purpose FSA (LPFSA), if offered by your employer. Generally, you can use an LPFSA for eligible dental and vision expenses. This can help you save your HSA funds for other eligible expenses.

Persons enrolled in Medicare are not eligible for an HSA. There may be an exception if Medicare coverage did not extend for the full year.

For 2018, the Internal Revenue Service has set the following amounts based on the HDHP one has, self-only or family:

• For Self Only coverage the limit is $3,450.

• For family coverage the amount is $6900

If you’re age 55 or older, you can contribute another $1,000 per year. This is a “catch-up” contribution to help you save for health care expenses in retirement.

No. Per IRS regulations, you must be enrolled in a qualified HDHP to contribute to an HSA. However, you have until April 15 of the following year to contribute for the time you were eligible.