A Health Savings Account (HSA) is an individually-owned account that can be funded on a pre-tax (or tax-deductible) basis and used for the qualified medical expenses of the account holder and eligible dependents on a tax-free basis. The maximum amount an individual can contribute to an HSA during a year is dependent upon the tier of High-Deductible Health Plan (HDHP) coverage in which the individual is enrolled (self-only or family) and the number of months the individual is HSA-eligible during the calendar year. HSA accounts often provide investment opportunities to account holders, subject to minimum account balance requirements.

It is important to remember that many of the issues addressed in this guide involve an individual’s tax-qualified status for HSA contributions. As a result, employers and individuals must work with their tax advisors when determining eligibility and limits for HSA contributions. Most of the information covered in this guide can be found in §223 of the Internal Revenue Code. However, additional IRS guidance is also referenced in the relevant sections of this guide.

Regulatory & Legislative Strategy Group