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About Health Savings Accounts (HSAs)

HSA stands for Health Savings Account, which allows you to place money into a personal bank account to use for current or future medical expenses. It’s used along with a high deductible insurance plan.

More on HSAs

  • The Internal Revenue Code and IRS set the rules on how much money you can put into your HSA account each year. Yearly maximum contribution amounts to your HSA are determined by the deductible amount you choose. Whatever you don’t spend from your HSA is automatically rolled-over into next year, so there is no worry about “using it or losing it”.

Tax advantages of HSAs

HSAs offer a triple tax advantage because:

  1. The money you put into your account, which you set up at a participating bank, is tax deductible
  2. Interest earned is tax-free, giving you more money to use for your healthcare needs
  3. When you need to withdraw money for qualified expenses, the money is income tax-free

Money you don’t use by the end of the calendar year moves into the next year and continues to earn interest, so you don’t have to worry about “using it or losing it”.

Notice for HSAs

Since HSAs are personal healthcare savings vehicles, BCBSWY is unable to provide legal or tax advice as to whether you are eligible to establish or contribute to an HSA in any tax year. BCBSWY is not authorized to provide legal or tax advice to members. BCBSWY expressly disclaims responsibility for, and makes no representation or warranty regarding: (1) the eligibility of any member to establish or contribute to an HSA; or (2) the suitability of this product in all circumstances for use with HSAs.

In addition, although you must be covered by a high deductible health plan in order to contribute to an HSA, additional rules apply. You may not contribute to an HSA, for example, if you can be claimed as a dependent on someone else's tax return or you have other health coverage (other than high deductible coverage), including Medicare, coverage through a spouse or coverage under a cafeteria plan that provides reimbursement of medical expenses.

You are solely responsible for determining the legal and tax implications of: (1) establishing an HSA; (2) eligibility for an HSA; (3) the amount of contributions made to an HSA; (4) the deductibility of contributions made to an HSA; and (5) withdrawals from an HSA and related taxation. BCBSWY encourages all individuals to consult with an accountant, lawyer or other qualified tax adviser about how the rules apply to their own situations.

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