What is an HSA?

A Health Savings Account (HSA) is a medical savings account available to individuals who are enrolled in a qualifying High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit, and unlike a Flexible Spending Account (FSA), funds accumulate and roll from year to year if not spent. HSAs are owned by the individual, which differentiates them from the company-owned Health Reimbursement Arrangement (HRA), but similar to an individual retirement arrangement (IRA); also similar to the IRA, HSA funds can be invested and controlled by the individual.

A High Deductible Health Plan (HDHP) with HSA eligibility has both minimum deductible and maximum out of packet numbers.

For 2018 the minimum deductible and max out of pocket:

  • Minimum deductibles are $1,350.00 for employee only and $2,700.00 for family coverage
  • Max out of pocket is $6,650.00 for employee only and $13,300.00 for family coverage

For 2019 the minimum deductible and max out of pocket:

  • Minimum deductibles are $1,350.00 for employee only and $2,700.00 for family coverage
  • Max out of pocket is $6,750.00 for employee only and $13,500.00 for family coverage

HSAs help to reduce employer healthcare expenses by allowing them to offer better benefit packages to employees and provide flexibility, choice and tax advantages. The HSA provides attractive incentives for employers of all sizes to provide health insurance while also allowing for healthcare decisions to be made in the hands of the individual consumers.

HSA accounts can also be paired with FSA and HRA plans as long as certain conditions are met. When combined with an FSA, a Limited FSA (LFSA) is created and is only allowed to be used for dental and vision expenses while all medically related expenses are paid from the HSA account. If paired with an HRA, the employee responsibility must meet the HSA minimum deductibles described above in order to keep the plan’s HSA eligibility. We strongly recommend calling to discuss these options in detail with our expert sales team.

Who contributes to an HSA?

Individuals or employers may contribute to the HSA on a pre-tax basis; if the employer contributes to the account, all employees must be treated equally. The main advantage of making pre-tax contributions is the FICA savings which amounts to 7.65% to both the employer and employee. Regardless of the tax savings associated with the deposit, the deposits may only be made for individuals covered under the high deductible HSA-eligible health plan. Deposits may be made through payroll reductions, wire transfers, and standard check deposits

The maximum annual contribution to an HSA for 2018:

  • $3,450.00 for employee only coverage
  • $6,900.00 for family coverage

The maximum annual contribution to an HSA for 2019:

  • $3,500.00 for employee only coverage
  • $7,900.00 for family coverage

**if you are 55 and older, you are eligible for a $1,000.00 per year catch-up provision**

What and how can I spend my HSA funds?

HSA funds are designed to be used to pay for qualified medical expenses at any time without federal tax liability. There are no transaction fees associated with the alt Bentley Yates sponsored HSA account; all withdrawals are free of charge. Withdrawals for non-medical expenses are treated very similarly to those in an IRA account in that they may provide tax advantages if taken after retirement age but will incur penalties if taken earlier.

HSA funds can be used for any tax dependent even if said dependents are not covered under the High Deductible Health Plan but contributions are limited to the level of coverage elected.

With the alt Bentley Yates HSA, participants will receive a mySourceCard as well as access to free mobile app and online bill pay is also available.

Features and Benefits of an HSA

Employers and employees both benefit from the alt Bentley Yates’ HSA solution in the following ways:

  • Tax-advantaged - Contributions are tax free, potential interest gains accumulate tax free and distributions are tax free when used to pay for qualified medical expenses.
  • Flexible - Funds can be used for non-medical expenses. At age 65, any remaining HSA funds can be withdrawn for non-medical reasons without penalty; ordinary income tax will be charged on the money withdrawn for non-medical reasons.
  • Portable - The remaining balance rolls over from year to year; accounts move with employees even if they change employment or retire.
  • A savings solution for future health needs - Unused contributions accumulate and can be saved and used for future medical expenses. For example, unused funds can be used to pay COBRA or other medical insurance premiums during periods of unemployment or temporary layoff.

HSAToday

ABY has partnered with HSAToday to provide eligible participants a high class and mobile friendly HSA account. To enroll in our HSAToday plan, please click here or call 877.731.3532.