HEALTH SAVINGS ACCOUNT (HSA)

from ACRM - 6.1.2023 Benefits Guide

A SMARTER WAY TO BETTER HEALTH

Available only if you enrolled in the HSA Medical Plan through Anthem. Our HSA banking partner is Admin America.

What is a Health Savings Account?

A Health Savings Account (HSA) is an account permitted under the federal tax law that allows you to save money for healthcare expenses on a tax-favored basis It is an individual account that belongs to you and is not part of ACRM’s medical plan. The account is portable, which means it is not tied to your employment at ACRM. Your HSA stays with you if you retire or leave the company. Because the HSA has special tax status under the law, it is governed by numerous mandatory tax rules and regulations

Who is Eligible for an HSA?

Generally, to be eligible to set up and contribute to an HSA, you:

▪ Must be covered by a Consumer Directed Health Plan (CDHP) – the HSA medical plan

▪ Cannot be claimed as a dependent on anyone else’s tax return

▪ Are not enrolled in Medicare (due to age or disability) or Tricare

▪ Cannot be enrolled in a general purpose FSA, nor can your spouse

You may find information about these rules on the IRS website (www.irs.gov), including IRS Publication 969 and 502. You may also want to consult a tax-advisor.

How Does an HSA Work?

What Type of Expenses Can Be Paid From an HSA?

You can receive tax-free distributions from your HSA to pay for or to be reimbursed for qualified medical expenses that are incurred after you establish your HSA. These include:

▪ Any medical expenses that apply toward your deductible,

▪ Any healthcare expenses that are qualified expenses for tax purposes under Section 213 of the Internal Revenue Code. Some of these expenses are described in IRS Publication 502,

▪ Once your reach age 65, Medicare premiums or other health insurance, other than a Medicare supplemental policy.

When can I Begin Contributions to My HSA Account?

You may begin funding your HSA account as soon as your account is established.

Can I Invest My HSA Funds?

Yes, investment options are available once your account has accumulated certain thresholds.

Can I Use The Money in My HSA for Anything Other Than Eligible Medical Expenses?

You can withdraw your HSA at anytime and use it for any purpose; however, you will pay income taxes on the amount withdrawn, plus a 20% penalty. After age 65, the 20% penalty no longer applies.

How Much Can I Contribute to An HSA?

As noted by federal law, the annual contribution limits are:

▪ The amount is $3,850 for individual coverage and $7,750 for family coverage.

Loss of Other Coverage

You fund the HSA with your dollars up to a certain limit each year by making a deposit directly into your HSA account. The account must be funded prior to any withdrawals. Then, as you have eligible qualified expenses, you may withdraw money from your HSA to pay expenses that are not otherwise paid by the health, dental or vision plans, e g your deductible or coinsurance It’s up to you whether to use your HSA funds You are not required to use the money, you may save it for the future and let it continue to accumulate. It’s important to understand that the HSA, unlike a Healthcare Flexible Spending Account (FSA), will not pay for qualified expenses that exceed the balance in the HSA When filing your taxes each year, you will provide your tax advisor a report showing the amount you contributed to the HSA account, and you will receive a tax deduction for that amount.

▪ Individuals age 55 or older may be eligible to make a catch-up contribution of $1,000.