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Common HSA Questions and Answers

Open Enrollment is practically here, and there may be questions that pop up from your employees regarding HSA eligibility and enrollment. Below are some common questions and their answers:

  1. What are the qualifications to have an HSA?
    Answer: You must be enrolled in a high-deductible health plan (HDHP) in order to qualify for an HSA. Also, you cannot be enrolled in other health coverage such as Medicare or secondary insurance.
  2. When is my HSA funded?
    Answer: You or your employer can add money to your HSA at any time during the year. There is no enrollment period. Most employees fund their HSAs through payroll deduction.
  3. What are the Contribution limits for 2018?
    Answer: HSA contribution limit for employer + employee: Self $3,450; Family $6,900, Catch up contributions (age 55 or older): $1,000
  4. What if I begin coverage midyear?
    Answer: The contribution limit amount will be prorated according to the number of months that you were not enrolled in the high-deductible health plan.
  5. Who can contribute to the HSA?
    Answer: Anyone is allowed to contribute, such as yourself, your employer and members of your family.
  6. Are over-the-counter drugs qualified for an HSA?
    Answer: Generally not. The ACA eliminated OTC drugs as a qualified medical expense starting in 2011. HSA owners will need a prescription for a drug in order to qualify as a qualified medical expense.
  7. Can I contribute to my HSA if I am enrolled in Medicare?
    Answer: No, however, you can continue to receive distributions.
  8. How do I save money on taxes with my HSA?
    Answer: First, you pay no taxes on the money that you or your employer put into your HSA, up to the IRS limits. Second, you pay no taxes on interest and investment returns earned in your HSA. Lastly, you pay no taxes on HSA money when you use it to pay for eligible healthcare expenses.


BenefitsPro Magazine, “8 Facts on HSA Distributions” by Whitney Richard Johnson

SHRM “IRS Sets 2018 HSA Contribution Limits” by Stephen Miller, CEBS