Health Savings Accounts (HSAs) can be complicated, leading to many frequently asked questions (FAQ).
Saginaw Bay Underwriters created this helpful, three-part series of posts entitled “HSA FAQ” to address many of these questions and provide some clear answers, so that you can be better informed when making decisions about benefits for you and your family.
In Part 2, we’ll look at four more of these common questions.
5. Can I only use my HSA for certain things?
Yes. Since HSAs are triple tax-advantaged (having tax-free contributions, withdrawals and interest), they can only be used for qualified (or eligible) health care expenses. Using your HSA for something other than qualified expenses can subject you to IRS penalties.
For a complete list of qualified health care expenses, please visit IRS Publication 502 and see the section entitled “What Medical Expenses Are Includible?”
6. How much can I contribute to my HSA?
The IRS sets an annual limit for HSA contributions. This is typically adjusted each year.
In 2021, the limits are:
If you are 55 or older, you may also contribute an additional “catch-up” amount of up to $1,000 per year to your HSA.
7. Can my spouse and I have a joint HSA?
No. Since an HSA is owned by an individual, spouses cannot co-own an HSA.
However, as long as both you and your spouse are eligible you could each have a separate HSA. For these requirements, please see Part 1. In this case, either spouse’s HSA could be used to pay for the qualified health care expenses of the other.
Note that the combined annual contributions to these accounts cannot exceed the family contribution limit. Nevertheless, there may be long-term investment benefits to having two HSAs, due to compound interest.
8. Is my family covered by my HSA?
Yes. As long as your spouse and/or family are covered by a qualifying High Deductible Health Plan (HDHP) and are not claimed on another person’s tax return, they could also be covered by your HSA – meaning that their qualified health care expenses could be paid for with your HSA funds.
Making the Complex Simple
HSAs are a great option for many, but people still have many frequently asked questions about them.
In our final “HSA FAQ” post, we’ll provide answers to four final questions. Please subscribe to our blog to be notified of future posts.
Call Saginaw Bay Underwriters at (989) 752-8600 if you’d like to speak with an employee benefits risk advisor more about HSAs.
Saginaw Bay Underwriters has made every attempt to ensure this information has been obtained from reliable sources. Current as of: February 2021