Anthem Blue Cross HSA Plans

What is an HSA?    
 
"HSA" stands for Health Savings Account. HSAs allow consumers to pay for qualified medical expenses with pre-tax dollars—meaning income-tax free—and save for retirement on a tax-deferred basis.
 
An HSA is tax-favored savings account that is used in conjunction with a high-deductible HSA-eligible health insurance plan to make healthcare more affordable and to save for retirement.
 
HSAs are similar to individual retirement accounts (IRAs), but even better:
Pre-tax money is deposited each year into an HSA and can be easily withdrawn at any time with no penalty or taxes to pay for qualified medical expenses. Withdrawals can also be made for non-medical purposes, but will be taxed as normal income and are subject to a 10 percent penalty if done prior to age 65.

Any HSA funds not used each year remain in the account, and earn interest tax-free to supplement medical expenses at any time in the future.

Like an IRA, the account belongs to you, not your employer. But unlike an IRA, your employer CAN contribute to your HSA.

 

What Is a “High Deductible Health Plan” (HDHP)?

You must have an HDHP if you want to open an HSA. Sometimes referred to as a “catastrophic” health insurance plan, an HDHP is an inexpensive health insurance plan that generally doesn’t pay for the first several thousand dollars of health care expenses (i.e., your “deductible”) but will generally cover you after that. Of course, your HSA is available to help you pay for the expenses your plan does not cover.

 

Why should I consider getting an HSA?  
  
 
You may save money in the short and long term by:
Deducting 100% of your HSA contributions from your taxable income

Having the money in your HSA accrue interest and/or gains on a tax-free basis

Paying no penalties or taxes when you use your HSA to pay for qualified medical expenses

Having a high-deductible HSA-eligible health insurance plan, which typically has a lower premium than a plan with a lower deductible

Note: Some HSAs charge a small monthly maintenance fee.

 

What insurance plans are HSA-eligible?   

In order to have a Health Savings Account, you must get an HSA-eligible health insurance plan. This type of insurance plan is often referred to as a High Deductible Health Plan, and typically has lower premiums than plans with lower deductibles.
 
A health insurance plan must meet the following criteria to be considered HSA-eligible:
The health insurance plan must have an annual deductible of at least $1,150 for individuals and at least $2,300 for families.

The sum of the annual deductible and the other annual out-of-pocket expenses required to be paid under the plan (other than premiums) does not exceed $5,800 for individuals and $11,600 for families.
 
NOTE: If you have other health insurance coverage (such as coverage under a spouse's employer-sponsored plan) in addition to your HSA-eligible health insurance plan, then the other plan must 1) also be HSA-eligible in order to contribute to an HSA or 2) the other plan cannot cover any benefits provided under your HSA-eligible plan.

 

How much can I contribute to my HSA?  
  
 
Maximum yearly contributions (and associated tax deduction) are determined as follows:
 
For individuals, it is $3,000, and for families it is $5,950.
 
You do not have to contribute the maximum each year, although some HSAs require a small minimum monthly contribution.
 
Note: If you are between the ages of 55 and 65, you can make an additional annual "catch up" contribution (of up to $1,000 in 2009.)

 

How do I use the funds in my HSA?    
 
Using funds in your Health Savings Account is easy:
Typically an HSA will provide you with a checkbook or debit card. When you pay for a qualified medical expenses, use the debit card or check to make the payment.

You do not need to get approval from the HSA administrator when you use funds in your account.

You do not need to submit receipts to the HSA administrator, although you should save them just as you keep receipts for other items that are deducted from your taxes.

NOTE: You must establish the HSA before you incur medical expenses otherwise the expenses will not qualify.  

 

How do the tax savings work?  
  
 
HSAs make it easy to save on your taxes:
At the end of each year, you will be sent a statement showing the amount you contributed to your HSA that year. You can deduct this amount provided it is less than or equal to the maximum allowable contribution.

Much like an IRA, HSA deductions are "above-the-line" and thus can be taken even if you do not itemize.

If you are self-employed, in addition to deducting your HSA contributions, you may be able to deduct 100% of your health insurance premiums, provided that:
You are not eligible to participate in a subsidized health plan offered by an employer or your spouse's employer.

The deduction does NOT exceed the amount of net income from your business.

Note: Check with your accountant or tax advisor for the specific federal and state tax benefits that apply to you.

 

How can I get an HSA?  
  
 
Health Savings Accounts (HSAs) are available to any person in the U.S. under the age of 65 who has an HSA-eligible health insurance plan.
 
Use our site to shop for an HSA-eligible health insurance plan. If you need help we are always available.

 

IT'S EASY!

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