Insurance can be a confusing necessity. Sometimes people don’t understand the full advantages of their plan. This can even include knowing the full details of their associated Health Savings Account (HSA). Here are six surprising facts of an HSA you might not know.
You can still use your HSA even if you switch away from a High Deductible Health Plan.
Your Health Savings Account is just that, a savings account. The funds in the HSA are still yours to use for medical expenses, regardless if you switch away from an HDHP or leave your employer. Your HSA stays with you, and you can even transfer your HSA to a different financial institution. Transferring your current HSA into a Notre Dame FCU HSA can earn you 1.25% APY*.
You can use your HSA for more than just your own personal medical expenses.
You may use your HSA to pay for eligible medical expenses for your spouse and any dependents. It does not matter whether they are covered under your health plan or another, you can still use the funds for their medical expenses.
Anyone can make contributions to your HSA.
While only the account-owner can make pre-taxed contributions, anyone may make contributions to your HSA. Contributions deposited into the account after-tax may be deducted at the time of your annual tax return. We recommended consulting your tax professional for all questions regarding the tax benefits for your HSA.
Your HSA is managed by you.
You should keep track of all receipts for medical expenses paid from your account and are responsible for your own HSA recordkeeping. Keeping those receipts will be important since your HSA account statement will not be sufficient proof that expenses were for medical purposes, in the event of an audit.Notre Dame FCU is the custodian of your HSA, which means we are responsible for administering the account and reporting required information to the Internal Revenue Service.
Your HSA carries with it a triple tax advantage.
You can make tax-free contributions to your account, and the earnings on this account are also tax-free. When used for qualified medical expenses, distributions from this account will remain tax-free. Switching to a Notre Dame FCU account has an additional benefit of earning you 1.25% APY!
Some over-the-counter items are still considered eligible medical expenses.
A health savings account is just that, a SAVINGS account. However, there are times when it may be necessary to dip into those funds. The following items are things you can purchase that are eligible medical expenses† from your Health Savings Account:
- Vaporizers and Humidifiers
- First Aid Kits
- Hot and Cold Compresses
- Lodging and Meals (see more details here)
Please keep in mind over-the-counter medications typically require a doctor’s prescription to be considered an eligible medical expense.
Notre Dame FCU is here to help!
*APY is Annual Percentage Yield. Balance must be over $400 to earn dividends. Rate subject to change without notice. Insured by NCUA.
†IRS Publication 502 on Eligible Medical Expenses: https://www.irs.gov/publications/p502