A Health Savings Account (HSA) is a great way to save money for qualified medical expenses like doctor visits, dental and vision care, and prescriptions. It offers tax advantages that allow you to keep more of your hard-earned money, plus you can use it now or save it to cover health care costs in the future.
Once you set up your account, you can use it to help pay for qualified medical expenses for you, your spouse and any dependent children included on your income tax returns.
Contributing to an HSA can potentially save you money on your taxes. Pre-tax payroll contributions to your HSA may be exempt from federal and most state taxes or you may be able to claim a tax deduction for after-tax contributions you make to your HSA.
In general, you are not eligible to make contributions to an HSA in this situation. Please speak with a tax advisor for more information.
The federal government establishes contribution limits each year. See the current contribution limits. If you are 55 or older you are eligible for a catch-up contribution.
Consider putting in an amount that helps you cover your qualified medical expenses in the short term, but also allows you to set aside money to invest for the long term. Check out the "How much should I put in my Health Savings Account (HSA)?" article to learn more.
Yes, if your annual contributions (combined with those of your employer) do not exceed the IRS-defined limits.
You can use your HSA to pay for a variety of qualified healthcare expenses. As the accounts are tax-advantaged, the IRS defines the types of expenses that you can pay for with funds contributed to your HSA. Generally, qualified expenses include doctor visits, medications, medical equipment, and dental and vision care for you, your spouse and any eligible tax dependents. For additional information, view IRS Publication 502.
You can access your HSA any time on the MyHealth app or the member website.
Click here to learn more about the MyHealth app.
You cannot use an HSA to pay insurance premiums for medical, dental, or vision care, they are not considered qualified medical expenses.
If you're enrolled in Medicare and are age 65 or older, you can use your HSA funds to pay for Medicare premiums and qualified out-of-pocket expenses. You are also allowed to use your hsa funds to pay premiums for long-term care insurance, COBRA continuation coverage costs, and any health plan coverage you pay for while receiving unemployment compensation.
There's no deadline for using the money like there is with some other health accounts such as a Flexible Spending Account (FSA). HSA balance rolls over year after year and can keep growing.
The money stays with you. It's your money for the rest of your life. You can continue to use the account to pay for qualified health care expenses. However, the law states that you can only make new contributions to the account if you are enrolled in an HSA-eligible health plan.
You can pay out-of-pocket for the product or service and request a reimbursement from your HSA once you have accumulated enough funds to cover your expense.
The HSA investment feature offers federal tax-free earning potential that could add up over time. That's money you can put toward paying for your health care expenses in retirement.
There is a range of mutual fund options available for investing. Check out the fund line up.
Click here to learn more about the benefits of HSA investing.
Yes, you have until April 15 (tax deadline) of the current year, to open and fund an HSA for the previous year.
Yes, you may transfer or rollover your other HSAs to consolidate them into one.
Note: rollover and transfer contributions do not count towards the maximum annual contribution amount.
In general, you are not eligible to make contributions to an HSA in this situation. Please speak with a tax advisor for more information.
The standard monthly account fee is $2.50. If your account is offered by your Employer this fee may not apply to you. Learn more about the Health Savings Account Schedule of Fees.
1 In order to offer payroll deduction, an employer's cafeteria plan must comply with Internal Revenue Code Section 125.
End ARTICLE COMPONENT: full width 2-column footnotes-->Answers to 9 questions many people have — from who's eligible to what costs these accounts can help you cover.
Compare qualified medical expenses for a Health Savings Account (HSA), Flexible Spending Account (FSA), and Health Reimbursement Arrangement (HRA).
About Triple Tax Advantages: You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. Any interest or earnings on the assets in the account are tax free. You may be able to claim a tax deduction for contributions you, or someone other tahn your employer, make to your HSA. Bank of America recommends you contact qualified tax or legal counsel before establishing an HSA.
Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.
Bank of America, N.A. makes available The HSA for Life® Health Savings Account as a custodian only. The HSA for Life is intended to qualify as a Health Savings Account (HSA) as set forth in Internal Revenue Code section 223. However, the account beneficiary establishing the HSA is solely responsible for ensuring satisfaction of eligibility requirements set forth in IRC sec 223. If an individual/employee establishes a HSA and s/he is not otherwise eligible, s/he will be subject to adverse tax consequences. In addition, an employer making contributions to the HSA of an ineligible individual may also be subject to tax consequences. We recommend that applicants and employers contact qualified tax or legal counsel before establishing a HSA.
Bank of America does not sponsor or maintain the Flexible Spending Accounts (FSA) / Health Reimbursement Accounts (HRA) that you establish. The programs are sponsored and maintained solely by the employer offering the plan, or by an individual establishing an independent plan. Bank of America acts solely as claims administrator performing administrative tasks pursuant to an agreement with, and at the direction of, the sponsoring employer or individual under an independent plan. The sponsoring employer or individual under an independent plan is solely responsible for ensuring such arrangements comply with all applicable laws.
The planning tools and information calculators are illustrative only, and accuracy is not guaranteed. They are intended to provide a comparative tool for various consumer health care options and potential costs and savings of those options. Bank of America and its affiliates are not tax or legal advisors. The calculators are not intended to offer any tax, legal or financial advice and do not assure the availability of or your eligibility for any specific product offered by Bank of America or its affiliates. Please consult with qualified professionals to discuss your situation. This site may contain links to third-party content, which may be articles, videos, or calculators, regarding health plans only as a convenience. Some articles, videos and calculators may have been written and produced by third parties not affiliated with Bank of America or any of its affiliates.
Neither Bank of America nor any of its affiliates or employees provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. This material should be regarded as general information on health care considerations and is not intended to provide specific health care advice.
Please consult with your own attorney or tax advisor to understand the tax and legal consequences of establishing and maintaining a HSA, FSA, Dependent Care FSA, and/or HRA plan.
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Bank of America, N.A., Member FDIC.
Mutual Fund investment offerings for the Bank of America HSA are made available by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a registered broker-dealer, registered investment adviser, Member SIPC, and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”). Investments in mutual funds are held in an omnibus account at MLPF&S in the name of Bank of America, N.A., for the benefit of all HSA account owners. Recommendations as to HSA investment menu options are provided to Bank of America, N.A. by the Chief Investment Office (“CIO”), Global Wealth & Investment Management (“GWIM”), a division of BofA Corp. The CIO, which provides investment strategies, due diligence, portfolio construction guidance and wealth management solutions for GWIM clients, is part of the Investment Solutions Group (ISG) of GWIM.
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