Health Savings Accounts Defined
Save for future health care expenses with a Health Savings Account
Health care costs are rising. Higher deductibles, co-pays, and benefits premiums are being passed on to employees as companies try to cut their costs and save money. A Health Savings Account is used for paying or reimbursing qualified medical expenses to the participant, dependent(s), or spouse. These accounts provide a way for employees to manage health care costs through individual flexibility, control, and tax savings.
Why would I want a Health Savings Account?
Health Savings Accounts carry a whole host of benefits:
- Qualified contributions are fully tax-deductible (employer contributions may be excluded from your gross income)
- Qualified distributions are tax-free
- Money saved can be applied directly to unexpected or high medical bills
- Contributions may be made any time during the year, and balances roll over from year to year
- Health Savings Accounts can continue even if you change jobs.
How does it work?
Health Savings Accounts are held as a tax-exempt trust account. Contributions to the account may be made by the account holder, his or her employer, family members, or other individuals. Health Savings Accounts are portable! This means that the account can be maintained even if you change employers. Accounts may also be transferred between financial institutions. If you currently have a Health Savings Account, consider transferring it to the BIC Foundation!
Am I eligible?
To be eligible to have a Health Savings Account, the individual:
- Must be covered by a qualified high-deductible health plan as defined by IRS
- Cannot be enrolled in Medicare
- Cannot be claimed as a dependent on someone else’s federal income tax return
Are there limits to my contribution?
Yes. The contribution limits set by the IRS for 2019 are:
- Single Coverage Annual Limit: $3,500.00
- Family Coverage Annual Limit: $7,000.00
- Additional contribution for eligible individuals who are age 55 or older: $1,000.00
The annual contribution deadline is April 15th of the following year. Contributions may be carried over from year to year.
How do I open a Health Savings Account?
For an application and other information, please contact us at the number listed below.
Are there costs for this type of account?
The Foundation does not charge a fee for this service.
How can I make withdrawals from the account?
Distributions from the account will be directly deposited in your bank account with your instruction by phone or email.
Qualified medical expenses?
Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. These are explained in IRS Publication 502, Medical and Dental Expenses. Non-prescription medicines (other than insulin) do not qualify as expenses for HSA purposes.
Who can I talk to if I have questions?
Foundation account officer, Kimberly Lehman will be happy to provide additional information about HSAs and assist you with opening your HSA account.
For more information:
- Contact Us at (717) 796-4788