Frequently Asked Questions about Health Savings Accounts

What is an HSA?

An HSA is a tax-favored account used in conjunction with an HSA-compatible health plan. The funds in the account are used to pay for IRS-qualified medical expenses such as services applied to the deductible, dental, vision and more.

How much can I contribute to an HSA annually?

2020 IRS Maximum Allowable Contribution Limits

  • Individual: $3,550
  • Family: $7,100

2021 IRS Maximum Allowable Contribution Limits

  • Individual: $3,600
  • Family: $7,200
What are catch-up contributions?

Account-holders who meet the qualifications noted below are eligible to make an HSA catch-up contribution of $1,000.

  • Health Savings account holder
  • Age 55 or older (regardless of when in the year an account holder turns 55)
  • Not enrolled in Medicare (if an account holder enrolls in Medicare mid-year, catch-up contributions should be prorated)

Authorized Signers who are 55 or older must have their own HSA in order to make the catch-up contribution.

Can any high deductible health insurance policy qualify for an HSA?

It can be a health maintenance organization (HMO), preferred provider option (PPO) or indemnity plan as long as it meets the IRS requirements. Your insurance company will determine if the policy is an HSA-compatible health plan.

Who can make contributions?

Contributions can come from employers, the account holder or third parties. The combined contribution amount is subject to the IRS contribution limits.

Are the income restrictions?

There are no income restrictions for opening or contributing to an HSA.

What can I spend my HSA funds on?

HSA Funds can be used for a wide variety of medical and dental-related expenses. See the publications below for details:

Is an HSA compatible with an HRA/FSA?

Yes, this is permitted if the combination is:

  • “Limited purpose” flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) that restrict reimbursements to certain permitted benefits such as vision, dental, or preventive care benefits.
  • “Post-deductible” FSA or HRAs that only provide reimbursement after the minimum annual deductible has been satisfied under the HDHP.
If I set up an HSA with my employer, what happens if I switch jobs?

The funds are portable and go with you.

Can I withdraw the money for non-medical purposes after age 65?

Yes. After the age of 65, you can use the funds for non-qualified expenses without penalty. Funds used for non-qualified expenses may be subject to income tax.


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