Health Savings Account (HSA)
How Health Savings Accounts Work
The Health Savings Account is an individual health account and owned by the employee that they can use toward their qualified healthcare expenses in conjunction with their High Deductible Health Plan. Your client and their employees may contribute to an HSA on a pre-tax basis. The HSA is like an Individual Retirement Account (IRA) in that the employee owns it, directs the investments, and it stays with the account holder regardless of employment with your client’s company.
HSA Plan Design
Offering an HSA has become popular with employers providing HDHPs as part of their benefits package. HSAs have a unique set of advantages as opposed to other tax-advantaged options.
- Triple Tax-Advantaged – Contributions are tax-free, gains on invested funds accumulate tax-free, and distributions are tax-free when used to pay for qualified medical expenses. HSAs are the most tax-advantaged account in the marketplace today.
- Flexible – Funds can be used for non-medical expenses, but they are subject to a 20% penalty, except when an individual is 65 or older, disabled or died during the year. At age 65, HSA funds can be withdrawn for non-medical reasons without penalty. Ordinary income tax will be charged on the money withdrawn for non-medical reasons.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 with no “use-it or lose-it” rule. Accounts move with employees even if they change employment or retire.
- A Solution for Future Health Expenses – Unused contributions accumulate and can be saved and used for future medical expenses. For example, unused funds can be used to pay Medicare premiums in retirement or premiums for Long Term Care insurance.
HSAs have a yearly maximum contribution allowance. The 2020 individual contribution limit is $3,500. The family contribution limit is $7,000. Each year the IRS provides inflation-adjusted contribution limits.
What Expenses Are Eligible?
HSAs cover a variety of healthcare expenses including, but not limited to:
- Deductibles & Co-Pays
- Prescription Drugs
- Dental & Orthodontic Services
- Eyeglass, Contacts & Eye Surgery
- Chiropractic Services
- Mental Health Care
- Smoking Cessation Program
For a complete list of eligible services, please view the list of common expenses here or for a complete list visit the HSA Store.
Your clients become part of the ASi family, which means providing them with the best features within the industry. The features listed below are included as part of our administrative services.
- Cost Savings
- Online and Mobile App Account Access
- Marketing Material for Employees
- Dedicated ASi Teams Who Provide Personalized Customer Service
- Assist in Group Enrollment
- Marketing Materials for Your Employees
- Timely Processing of Distribution Reports
- Provide Standard Reports Upon Request
We know your client’s employees are the heart of their business, which means we provide them with great tools and resources to help them manage their benefits.
- Triple Tax-Advantaged Savings
- Flexible Spending
- Portable Account
- A Solution for Future Health Investments
- Employee Online Portal
- Mobile App
- ASi Visa® Card
- Easy to Understand Benefits