A Few Guidelines To HSA
What is an HSA?
HSA stands for Health Savings Account, which is essentially a tax-deductible account you can use to cover various expenses related to health or medicine. This plan is exclusive only to individuals who have a certified high-deductible health plan, or for short, an HDHP.
A Few Things You Should Know Before Registering
There are certain things to keep in mind if you’re interested in registering for an HSA. The federal government has a set of rules and regulations that you must abide by in order to actually be able to qualify.
For starters, in order to be considered eligible, an individual must already have a qualified HDHP that has been in operation for at least a month. Furthermore, you cannot already be enrolled in Medicare or be a dependent on another citizen’s tax return. Besides a few exceptions that can be applied, see to it that you don’t already have an existing health plan coverage.
HSA funds may be used for such expenses along the lines of diagnosis, cure, treatment, mitigation, or prevention of illnesses. In regards to this, paying for the fees of doctors such as dentists and optometrists, obtaining prescription medicine, and getting MRI scans will also be covered. The few services that the HSA does not encompass would be international drug prescriptions, plastic surgery, and any kind of veterinary services.
If you happen to withdraw funds for the purpose of using them on a service that is not included on the list of qualified expenses, this automates a tax on the money in the form of income. You will also receive a 20% penalty from this. Please be informed that this is applicable to those who are under the age of 65. For those who are older than 65, taxes will have to be compensated, but the penalty mentioned above will not be administered.
If by the end of the year you find that you had failed to use up all the money contained in your account, that leftover amount will be then used to cover any future expenses. No matter what you do, the cash in your account belongs solely to you and is therefore exclusive for your use only, no matter what the circumstance.
If you’re interested to read more about HSA guidelines 2019, you may click on this link to their official website.