Health Savings Account

HSA Advantages

  • You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040
  • Contributions to your HSA made by your employer ( including contributions made through a cafeteria plan) may be excluded from your gross income
  • The contributions remain in your account until you use them
  • The interest earnings on the assets in the account are tax free
  • Distributions may be tax free if you pay qualified medical expenses 
  • An HSA is “portable”. It stays with you if you change employers or leave the work force

Eligibility Rules

  • You must be covered under a high deductible health plan (HDHP)
  • The HDHP 2017 individual minimum deductible limit $1300, the family limit is $2600 
  • You cannot be claimed as a dependent on someone else’s tax return
  • You are not enrolled in Medicare or Medicaid
  • You have no other health coverage (with limited exceptions)

You can have additional insurance that provides benefits only for the following items:

  • May not have a general purpose flexible spending account (Limited purpose flexible spending accounts are allowed for Vision, Dental or Dependent Care)
  • Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property 
  • A specific disease or illness 
  • A fixed amount per day (or other period) of hospitalization 

You can also have coverage (whether provided through insurance or otherwise) for the following items:

  • Accidents
  • Disability
  • Dental care
  • Vision care
  • Long-term care


*These limits are subject to annual cost-of-living adjustments.

Contact www.irs.gov for more information