Health Savings Account Rules

 

HSA Account


An HSA Account is just another name for a Health Savings Account and is a tax advantaged account that is used to pay health related expenses that are not covered by your High Deductible Health Plan. You must be on a high deductible health plan (HDHP) in order to qualify to contribute to an HSA.

 


How Does An HSA Account Work?

Typically when someone switches from a traditional low deductible health insurance plan to a high deductible plan (HDHP) their monthly premium drops dramatically. Therefore a middle aged individual may find that their monthly health premium drops by $250-300 or the drop can be $500-$700 for an insured family. However, since this high deductible health insurance won't pay for much of your routine medical care you will want to take the money you are saving and contribute it to a Health Savings Account. Then when you incur medical expenses you can use the money that has accumulated in the account to pay for them.


What Health Expenses Qualify?

You can use the money in your HSA Account to pay for all HSA qualified expenses which include deductibles on Dr Office Visits, shots, prescription drugs as well as chiropractic and acupuncture services. You also can use HSA funds to pay for vision or dental services that are not covered by your insurance. As of January 2011 Over-The-Counter drugs are not eligible unless they have been prescribed by a physician.

 


Where Can You Open An HSA Account?

There are numerous financial institutions that offer HSA Accounts for example banks such as Chase, Wells Fargo and Mellon Bank. There are also financial institutions set up for the sole purpose of administering HSAs, these include HSA Bank and Freedom HSA. You will want to compare the features and fees associated with each institution to find the one that best meets your needs.

 

Additional HSA Rules

If you have additional questions about HSA Accounts please visit our HSA Rules page. You will find answers to nearly all aspects of Health Savings Accounts all on one page.