HEALTH SAVINGS ACCOUNTS (HSA'S) 
 

Health Savings Accounts (HSA's)  involve 2 parts:  The first is a high deductible health plan (you will always see the 'HSA' in the name if it is a qualified plan). Generally you need to meet the deductible before there is coverage for most services with a few preventative exceptions. The second part is an HSA account. This can be set up through a bank that offers HSA accounts. 

The idea is to use the medical plan for catastrophic medical expenses, then use the HSA account to pay for your out of pocket office visits, prescriptions, vision, dental, and alternative care expenses. You can even use HSA funds to pay for Long Term Care insurance. Rules are all subject to change.

       Which Individual HSA Medical Plan should I choose?

At the moment, my most competitive plan is the HSA Value plan by ODS Companies.   

        How much can I contribute into a HSA account?

Contributions limits for an individual are $3100 for 2012 and $6250 for a family in 2012.   I will refer you to the guidelines available at the website:   www.hsabank.com for more information.   

What are eligible medical expenses I can use my HSA funds for?
 

The guidelines can also be viewed at www.hsabank.com.  It is important to add that you can use your HSA account for your eligible medical expenses, or those of any legal dependents.

Where should I open an HSA account if I already have my HSA medical plan in place?

I recommend folks go first to www.americanchartered.com , as they charge no fees.   You can also check at www.hsabank.com for another option that pays good interest on your money, but has some fees.  You can also call your local bank to see if they have a program.

Who receives a decedent's unused HSA assets?
Like an IRA, the assets in an HSA become the property of a named beneficiary upon the accountholder's passing, or go to their estate if no beneficiary is name. A spouse beneficiary can treat such assets as their own account, while a non-spouse must include them as ordinary income for taxation purposes.

Do HSAs require reporting?
Yes.  HSA contributions made by an employer must be reported on an employee's tax return, and reported by the employer to the IRS. (A financial organization through which an employer has set up an HSA must also provide reports to the IRS.)

Disclaimer:  HSA information is subject to change.  Please consult your tax advisor regarding HSA tax consequences, or the bank you intend to put your HSA money with.   I am only competent to advise you on the medical portion of the plan.