Health Savings Account (HSA)

Health Savings Account

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Health Savings Account

An HSA can be a powerful tax savings tool for paying qualified medical expenses. In general, HSA contributions made by an eligible individual are tax-deductible and employer HSA contributions made on behalf of an eligible employee are excluded from the employee’s gross income. Interest and other earnings on HSA contributions accumulate tax-free. Amounts distributed from an HSA for qualified medical expenses are generally tax-free as well.

Who can establish an HSA?

An individual may contribute to an HSA in any month in which he or she is:

  • Covered under a high deductible health plan (HDHP) on the first day of the month
  • Not also covered by another health plan that is not an HDHP (with certain exceptions)
  • Not entitled to benefits under Medicare
  • Not eligible to be claimed as a dependent on another person’s tax return

 

What expenses are eligible for tax-free reimbursement from an HSA?

An HSA may reimburse qualified medical expenses incurred by the account beneficiary and his or her spouse and dependents.

 

What expenses are eligible for tax-free reimbursement from an HSA?

Click here for a list of eligible expenses: www.usu.edu/hr/files/uploads/213(d)eligiblemedicalexpenses.pdf

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