Frequently Asked Questions

Your Health Savings Account (HSA) coupled with a High Deductible Health Plan (HDHP) can help you save money on your medical expenses. By choosing the HDHP you can save significantly on your health care premiums.

General Information

A Health Savings Account (HSA) is what you get when you combine a high-deductible health insurance plan and a tax-exempt savings account. They are designed to allow individuals to use pre-tax dollars to help pay for current and future medical expenses.

 

graph of what an HSA is and how it works

HSAs offer a triple tax advantage:

  • Contributions are 100% tax deductible
  • You choose when to make your contributions and how to invest them
  • Contributions to your HSA by your employer are excluded from your gross income
  • Unused funds rollover from year to year
  • The interest or other earnings on the assets in the account are tax-deferred
  • Funds can be used at any time for qualified medical expenses tax-free
Yes. You can rollover amounts from your other HSA(s). Complete and mail the HSA Transfer/Rollover Form to HSA Central.

Taking money out of your HSA is as easy as taking money out of your checking account. There are no claims to file - you simply swipe your HSA debit card or use Online Bill Pay. If you choose to reimburse yourself for eligible expenses, you can simply make a funds transfer using Online Banking, using Online Bill Pay or withdrawal funds at an ATM.

Yes. Your HSA funds can be used for your spouse and dependent children's out-of-pocket eligible expenses, even if they are not on your health plan.

Yes. The IRS requires your HSA to be an individual account, but you may name other people as authorized signers and they will receive debit cards.

  • Contributions are 100% tax-deductible for the account holder (excluding employer contributions)
  • Funds grow on a tax-deferred basis and if the funds are used for an eligible expense, the funds are tax-free
  • Funds rollover from year to year. Funds used after age 65 are used tax-free for eligible expenses including Medicare premiums or at your normal tax rate for any other reason.
If you are under the age of 65, you will owe income tax plus a 20% IRS penalty. After 65, the 20% penalty is waived and you will only owe income tax.
As of age 65, funds can continue to be used for eligible medical expenses tax-free. You may also use the funds for non-eligible expenses and you are only subject to ordinary income tax without any IRS penalty. If you are covered by Medicare, usually at age 65, you can no longer make contributions to an HSA. Funds may still be used for eligible expenses, including Medicare premiums, tax-free.
  • No use it or lose it rules
  • Unspent balances in accounts remain in the account until spent
  • Accounts can grow through investment earnings, just like an IRA

Enrollment and Contributions

  • Employers and employees can contribute to HSAs as long as the account holder meets the requirements for HSA eligibility
  • Family members or any other person can make contributions on behalf of an eligible individual
Visit the HSA Central website for more information.
Taking money out of your HSA is as easy as taking money out of your checking account. There are no claims to file - you simply swipe your HSA debit card or use Online Bill Pay. If you choose to reimburse yourself for eligible expenses, you can simply make a funds transfer using Online Banking, using Online Bill Pay or withdrawal funds at an ATM.
It stays in your account. The funds in your HSA is your money, there is no "use it or lose it" rule. Funds accumulate and carry over year after year.
North Shore Healthcare will make employer contributions to your HSA - 50% of your contributions on a quarterly basis - up to $125 quarterly or $500 annually. You may make pre-tax contributions to your HSA through payroll deduction.
The IRS has an annual maximum limit for your HSA contributions. The deadline for contributions is the same as your tax filing deadline excluding extensions. For most individuals this is April 15.
In January, you will receive a 1099-SA and a 5498-SA from Central Bank to use in filing your taxes along with your W-2 from North Shore Healthcare.

Distributions from your HSA

Visit the HSA Central website for more information.
If you are under the age of 65, you will owe income tax plus a 20% IRS penalty. After 65, the 20% penalty is waived and you will only owe income tax.
No. Unlike an FSA, the funds must be in your HSA before you can use them. However, you are able to reimburse yourself for eligible expenses when funds are available.
Contact HSA Central Consumer Services
1-833-232-4676
hsacentral@healthaccountservices.com