HSA Rules and Regulations You Should Know
If you have a high-deductible health insurance plan, a Health Savings Account (HSA) can help you save for future medical expenses. Health Savings Accounts were established by the federal government as part of the Medicare Prescription Drug, Improvement, and Modernization Act. Like any federal program, HSAs have rules you must follow in order to qualify, make contributions to your account, and withdraw your funds.
HSA Rules and Regulations
Rules for Qualifying
According to federal guidelines, in order to qualify for an HSA, you:
- Must be covered under a high deductible health plan (HDHP) on the first day of the month
- Have no other health coverage (some exceptions apply)
- Are not enrolled in Medicare
- Cannot be claimed as a dependent on someone else’s prior year tax return
Rules for Making Contributions
Each year the IRS determines the amount that you, your employer, or anyone else can contribute to your HSA. Determine current contribution limits on the IRS website.
Rules for Using Your Savings
You can use the money in your HSA account for qualified medical expenses determined by the IRS. Typically, HSAs are used for treatments, prevention and diagnosis of conditions and diseases.
HSAs at First Bank*
A First Bank Health Savings Account provides you a tax-free distribution from your account any time you need to pay for medical expenses.** First Bank HSAs also come with online banking and bill pay to help you manage your account, and you can access your funds from anywhere with our HSA-specific debit card and checks. Other benefits include:
- Tax deduction for contributions even if deductions are not itemized
- Contributions made by employer may be excluded from gross income
- Contributions accumulate until used
- Tax free earnings
- HSA may be transferred or rolled over to another HSA
- Complete IRS reporting available
- FDIC insured
To learn more about HSA rules and sign up for an account today, visit a First Bank branch near you.
**Qualified medical expenses, as explained in IRS Pub. 502, include amounts paid for doctors’ fees, prescription medicines, and necessary hospital services not paid for by insurance. Qualified medical expenses may be incurred by you, your spouse, or your dependents. To be eligible for a HSA account, you must you must be covered by a high-deductible health plan (HDHP). Learn more about HSA’s at https://localfirstbank.com/health-savings-account/. First Bank and its representatives do not provide tax advice. Each individual’s tax and financial situation is unique. Individuals should consult their tax advisor for advice and information concerning their particular situation.