What qualifications must employees meet to enroll in HSAs?
• They must be enrolled in a High-Deductible Health Plan (HDHP) that meets IRS requirements. • They cannot be covered by another medical plan that is not a HDHP (i.e. Employees cannot be a dependent on anyone else’s plan, except for vision or dental coverage). • Employees cannot be enrolled in Medicare. • They cannot be claimed as a dependent on another person’s tax return. Is there an IRS-approved list of medical expenses on which employees can spend their tax-free HSA funds? Yes, the “213 (d)” list is published by the IRS and includes, but is not limited to: doctors’ office visits, hospital care, dental care, vision care, prescription drugs, over-the-counter medications, copayments, deductibles, and coinsurance. Can employees use their HSAs for non-medical expenses? Yes, employees can spend HSA funds on non-medical expenses. However, in doing so, they’ll be required to pay income tax on the amount withdrawn, plus a 10 percent penalty for a non-medical withdrawals made prior to age 65
