How do HSA contributions work?
• HSAs are “above the line” deductions, meaning the deduction is always available and is not dependent on earnings, tax-filings status, employment status or whether or not you itemize tax deductions. Interest earnings inside the HSA account are not taxed. • Distributions taken from an HSA are tax free if they are taken for qualified medical expenses incurred by the person covered under the HDHP, their spouse or their dependents. • It can be used to pay for other health insurance except: – COBRA premiums for the continuation of health care benefits – Health coverage while receiving unemployment compensation – Medicare premiums and out-of-pocket expenses – Long-term care insurance • Members between the ages of 55 and 65 can make additional pretax “catch-up” contributions of $1,000 for 2009 and thereafter. • If you make your maximum annual contribution early in the coverage year, and then you leave your employer before that coverage year has ended, you will be responsible to pay the taxes
• HSAs are “above the line” deductions, meaning the deduction is always available and is not dependent on earnings, tax-filings status, employment status or whether or not you itemize tax deductions. Interest earnings inside the HSA account are not taxed. • Distributions taken from an HSA are tax free if they are taken for qualified medical expenses incurred by the person covered under the HDHP, their spouse or their dependents. It can be used to pay for other health insurance except: • COBRA premiums for the continuation of health care benefits • Health coverage while receiving unemployment compensation • Medicare premiums and out-of-pocket expenses • Long-term care insurance • Members between the ages of 55 and 65 can make additional pretax “catch-up” contributions of $900 for 2008. This contribution amount will increase by $100 yearly until 2009, when the amount will top off at $1000. • If you make your maximum annual contribution early in the coverage year, and then you leave your
