Health Savings Account (HSA)



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USBank Participant Portal Overview

HSA Rules for Dependents Under Age 26

While the Patient Protection and Affordable Care Act of 2010 (PPACA ) allows parents to add their dependent children (up to age 26) to their health plans, the IRS has not changed its definition of a dependent for health savings accounts. This means that a person could have their 25-year-old child covered on their HSA -qualified high-deductible health plan, but not be eligible to use their HSA funds to pay for medical bills for that 25-year-old. Reimbursements issued in violation of this rule will be taxed and could be subject to the 20% HSA penalty for an early withdrawal. For all HSA plans, group or individual, the IRS definition of a dependent is used when determining whether a dependent qualifies and how benefits are administered for dependents. The account holder must be able to "claim" the child/relative as a dependent on their tax return, and if they cannot, they are not allowed to spend HSA dollars on services provided to that child/relative. The IRS defines a qualifying child dependent as follows:

  • Daughter, son, stepchild, sibling or stepsibling (or any descendant of these)
  • Has same principal place of abode for more than one-half of taxable year
  • AND not yet age 19 (not yet age 24 if student)  
  • OR permanently and totally disabled.

Resources for more HSA Information:

 

Plan Year 2013 Health Savings Account Chart

Health Savings Account Eligibility Requirements

USBank

US Bank list of eligible health care services for reimbursement under an HSA



IMPORTANT - You are NOT eligible for Plan C with a Health Savings Account (HSA) if any of the following IRS Guidelines apply to you:

  • You are enrolled in Medicare.
  • You are covered by another health plan that is not a Qualified High Deductible Health Plan.
  • You are enrolled in the standard Health Care Flexible Spending Account (HCFSA) or are covered by a spouse’s HCFSA.  For those currently enrolled in a HCFSA with a grace period, like the one offered to State employees, you may enroll in and start contributions to the HSA effective January 1, 2013 if there is a zero balance in your HCFSA account as of December 31, 2012.  If there is a balance in your HCFSA, you may enroll in Plan C effective January 1, 2013,  but no contributions will be made to your HSA until the 1st of the month following the completion of the plan’s FSA grace period.
  • You are covered by TRICARE and TRICARE for Life.
  • You are covered by Veterans Administration (VA) benefits and have used the VA medical services within the three-month period immediately preceding your enrollment in Plan C.

IRS Links

Through the HSA, you can set aside pre-tax money to pay for certain eligible health care expenses for yourself, your spouse or your dependent children.  Here are a few examples of the types of expenses that are considered qualified medical expenses for HSAs:

  • Medical, dental and drug deductibles and coinsurance
  • Dental and vision expenses 
  • Over-the-counter medications, such as aspirin, cold medicines, antacids and cough supplements with a prescription from a doctor
  • Contact lens solution or cleaners
  • Long Term Care premiums

Both you and your employer contribute money to the Health Savings Account (HSA).  The maximum annual contribution to an HSA for 2013 is $3,250 for single coverage and $6,450 for dependent coverage.   These maximums apply to the sum of you and your employer’s contributions, so your maximum annual contribution for 2013 is $1,750 for single coverage and $4,200 for dependent coverage.  Members between ages 55 and 65 can make additional “catch up” contributions to their HSA each year until they enroll in Medicare.  The additional catch-up contribution for 2013 remains at $1,000.

The banking institution will mail you an HSA debit card and account number that you may use to set up your online account access where you may view your account activity and learn more about your account and investment options.

Your HSA belongs to you and is “portable” which means that even if you leave your employer, you take your account with you and can use it to pay eligible medical expenses. Since the account belongs to you, you are responsible for the account investments and fees, so be sure to review the HSA investment options and fees that apply.

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