Health Savings Account
Heatlth Savings Accounts (HSAs) are tax-free savings accounts that can be used to pay for qualified medical expenses (QMEs), and help you lower your overall healthcare costs. They are available to people who are enrolled in a high deductible health plan (HDHP), including Marketplace Plans.
Who qualifies for an HSA?
- Those who are covered under a High-Deductible Health Plan (HDHP) on the first day of the month (your minimum deductible has to be $1,400 for an individual or $2,800 for a family)
- You have no other health coverage (such as Medicare, military health benefits, medical FSAs)
- You cannot be claimed as a dependent on someone else’s tax return
HSA features
- The money goes in tax-free and it comes out free of income taxes when you use it to pay for QMEs.
- Helps you prepare for unexpected medical expenses
- You can carry over unused funds from year to year
- The account and your contributions are yours to keep even if you change jobs, health plans or retire.
- Earns interest, which is not taxable.
- Can be used for spouses or dependents medical expenses
- Contributions can be made up to April 15 of the following year
- No “use it or lose it” rule, your money just stays in your HSA account.
- QMEs can include doctor’s visits, prescriptions, vision and dental expenses
Easy access to your HSA Account
- Dedicated Bloom Credit Union Debit Card available
- Unlimited check writing
- Bloom Credit Union Online Banking & Bill Pay
- Bloom Credit Union mobile banking app
- Bloom Credit Union branch offices
Contribution Limits
For 2021 and 2022, you can contribute up to $3,600 for self-only HDHP coverage and up to $7,200 for family HDHP coverage each year. At age 55, an additional $1,000 is allowed annually. After age 65, you can withdraw funds for any purpose. Deductible and contribution limits change annually, determined by the IRS. For 2021, the HDHP minimum deductible is $1,400 for self-only, and $2,800 for a family.
Other important information about HSAs
- HSAs can have beneficiaries
- No required minimum distributions like IRAs.
- Can roll them over, similar to IRAs
- Deposits can be made by anyone (usually the account holder or employer)
- 20% penalty for using funds from HSA for non-qualifying withdrawals
- For tax related questions, please see a licensed tax advisor
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