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A Health Savings Account (HSA) is a tax-advantaged savings account that allows you to contribute money for present and future health care expenses. It allows you to save pre-tax dollars up to the IRS annual limits to pay for medical expenses that aren't covered by the medical plan, such as the annual deductible.
Watch this video from PayFlex to learn more about how to use your HSA!
Not sure how much to contribute? Or how much you’ll save? Use this
interactive advisor tool from PayFlex to help you understand the benefits of enrolling in a pretax account and how much to contribute.
You can change your contribution at any time in
Dayforce. You can add to or reduce the amount deducted from your paycheck subject to certain deadlines. You can stop contributing altogether or make one-time lump sum contributions as well. Unlike a Flexible Spending Account, or FSA, HSA money carries over from one year to the next.
Note: If an individual is enrolled in another plan that is not a CDHP, including Medicare, he or she cannot
contribute to an HSA.
When you enroll in and contribute tax-free money into an HSA, your unused funds roll over from year to year. Also, if you ever leave or retire from your job, your funds go with you.
What are the IRS annual limits for HSAs in 2018?For 2018, the maximum amount you can contribute is as follows:
What medical expenses can be paid from an HSA?Generally, any qualified medical expenses can be paid from the HSA. These qualified expenses include:
Any amount you use for non-qualified medical expenses will be taxed at your income rate plus a 20 percent penalty. Remember that over-the-counter medications are 100 percent covered if filled with a prescription. Go to
PayFlex.com for a list of eligible expenses.
Can I use the HSA to pay for prescription drug, dental and vision expenses?Yes, as long as they are qualified health care expenses. The HSA is like a savings account. When you have a qualified medical expense, you decide if you want to pay for it with money in your HSA. The HSA cannot be forfeited or expire.
What is a Limited Purpose Health Care FSA?The law states you cannot have both an HSA and a Health Care FSA at the same time. Instead of a regular Health Care FSA, you may elect a Limited Purpose Health Care FSA. Limited Purpose Health Care FSAs can be used for out-of-pocket dental and vision expenses only.
Learn more about Limited Purpose Health Care FSA
Can I have both an HSA and FSA at the same time?IRS rules state you cannot have both an HSA and a general purpose Health Care Flexible Spending Account (FSA) at the same time. You can, however, elect a Limited Purpose Health Care FSA.
Learn more about using both accounts
On Medicare?IRS rules state you cannot contribute to an HSA once you're on Medicare. You can, however, continue using the funds you contributed to your HSA before your Medicare participation began. Speak with your HSA administrator if you have questions about avoiding tax penalties.
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