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 Your
HSA and Qualified Medical Expenses
HSA money can pay for any “qualified
medical expenses” permitted under
federal tax law. This includes most medical, dental, vision and chiropractic
care and over-the-counter drugs such as aspirin.
HSA money can pay medical expenses for yourself, your spouse, or your
dependent children even if your spouse and dependents are not covered
by your HDHP!
Your HSA and Non-Qualified Medical Expenses
Payments for services other than “qualified medical expenses” are taxable
as income and subject to an additional 10% tax penalty, except after
age 65 when the penalty no longer applies. Examples of taxable
income include:
• Medical expenses not considered “qualified medical expenses” (i.e.
cosmetic surgery).
• Other types of health insurance unless specifically
described above.
• Medicare supplement insurance premiums.
• Expenses that are not medical
or health-related.
High Deductible
Health Plans for Your HSA
To open and contribute to an HSA you must have coverage
under an HSA qualified “High Deductible Health Plan” (HDHP). Federal law requires
a health insurance deductible for 2010 of at least $1,200 (self-only)
and $2,400 (family). Maximum HSA contributions for 2010 are $3,050 (self-only) and $6,150 (family).
In addition, annual out-of-pocket expenses under the plan for 2010
(including deductibles, co-pays, and co-insurance) cannot exceed $5,950 (self-only) and $11,900 (family).
Click here for
more information.
The deductible must apply to all medical
expenses (including prescriptions) covered by the plan. However, plans can
pay “preventive
care” services on a first-dollar basis (with or without a co-pay). "Preventive
care" can include routine pre-natal and well-child care, child and adult immunizations,
annual physicals, mammograms, pap smears, etc.
Contributions can be made up to tax day (April 15) of the following year.
Individuals age 55 and older can also make additional "catch-up"
contributions. Current Kereon HSA customers must have their money sent to
us by the 10th of April in order for us to post this money to your account
by the 15th.
HSA and Premiums
You cannot use an HSA to pay medical insurance premiums, except
under specific circumstances, including:
• Health plan coverage while receiving
federal or state unemployment benefits.
• COBRA continuation after leaving a
company that offers health insurance.
• Qualified long-term care insurance.
• Medicare premiums and out-of-pocket expenses,
including deductibles, co-pays, and coinsurance for: Part A (hospital), Part
B (physician and outpatient), Part C (HMO's and PPO's) and Part
D (prescription drugs).
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The out-of-pocket maximums are:
2010 Minimum HSA deductibles of $1,200 self-only and
$2,400 family.
2010 Maximum HSA contributions of $3,050 self-only and
$6,150 family.
2010 Maximum HSA out of pocket expenses of $5,950 self-only
and $11,900 family. |
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HSA Benefits
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Tax free contributions
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Tax free distributions
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Tax free interest earned
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