1. In order to open and contribute to an HSA Solutions account, you must be enrolled in an HSA-qualified high-deductible insurance plan.
2. All contributions placed into an HSA account are tax-free, they can earn interest tax-free and can be used anytime tax-free to pay for qualified medical expenses, including vision and dental. However, if you use HSA dollars for anything else, they become taxable income and there is a 20% penalty.
3. You can use our online platform to make deposits and withdrawals, schedule payments to medical providers, track balances and after reaching the required balance, even transfer HSA dollars into investment accounts.
4. You don’t have to use HSA dollars now. They are yours until you need them and can even be used in retirement.
5. If you are no longer enrolled in an HSA-qualified plan, you can no longer put money into your HSA Solutions account, but any unspent funds may be used until all funds are gone.

A Health Savings Account (HSA) is a tax-favored savings account that is used alongside high-deductible insurance to pay for your medical expenses. A Health Savings Account offers:

Tax-deductible savings

Contributions to the HSA are 100% deductible (up to the legal limit) — just like an IRA.

Tax-free withdrawals

Withdrawals to pay qualified medical expenses, including dental and vision, are never taxed.

Tax-deferred earnings

Interest earnings accumulate tax-deferred, and if used to pay qualified medical expenses, are tax-free.

If you are enrolled in an HSA-qualified medical plan through your employer, you can open an HSA Solutions account and determine how much you want to contribute. Your employer can tell you if your plan is HSA-qualified, which means it has an annual deductible of at least $1200 and has specific limits on your maximum out-of-pocket expense.

If you enroll in an HSA-qualified plan, you’ll want to decide how much to contribute to your HSA. In 2012, you can contribute up to $3100 if you have single coverage, or up to $6,250 if you have family coverage. You can use HSA dollars to pay for the health insurance deductible and qualified medical expenses, including those not covered by the health insurance, like dental and vision care.

Once you decide how much to contribute, that money will be put into your HSA Solutions account BEFORE taxes in installments each pay period during the plan year. Some employers also make contributions. You may also be able to make manual payments during the year, so long as the sum of all contributions does not exceed the maximum allowed.

When you have an out-of-pocket medical expense, you decide if you want to use your HSA dollars to pay for it. You can do that by using your DirectPay Benefits Card or by setting up a direct payment from your account to your provider. You can also reimburse yourself by transferring funds from your HSA Solutions account to your checking or savings account at your bank.

If you decide to pay out-of-pocket for medical expenses, you can change your mind and reimburse yourself from your HSA dollars later on. Just be sure to save all your receipts and documentation. Remember, OTC medications (except insulin) can only be purchased with HSA dollars if you have a doctor’s prescription. 

While there is not a requirement to submit receipts to prove your HSA dollars were spend only on qualified expenses, the IRS can audit your taxes and if you can’t prove your HSA dollars were spent on legitimate medical expenses, they will be come taxable income and a 20% penalty will be assessed if you are under age 65.

—Access funds for short-term healthcare needs while you grow funds for long-term security. Your HSA contributions can go into one of three places: —

 1. Cash account (default account) —Your funds start out in a non-interest bearing FDIC —insured cash account. There is no minimum deposit —required for opening an HSA. Once your contributions —reach $1,500, you have additional choices.

—2. Interest bearing account —After you have $1,500 in your cash account, excess funds are automatically transferred, in $100 increments, into an interest bearing FDIC insured account. Funds are automatically transferred between the cash and interest bearing accounts as cash account fund levels increase or decrease. Interest rates are variable.

—3. Mutual funds —This is where your investing flexibility becomes a reality. —At any time, you may invest funds from your interest bearing account in a wide variety of mutual fund options. —Those options are available here. —Mutual fund shares may be automatically sold to bring the cash account balance to the minimum threshold of $1,500, when necessary. As with any mutual fund, your HSA investments are not FDIC insured and are made at your own risk. —They are not guaranteed by and may lose value.

The 2011 and 2012 limits for HSA-compatible plans are shown below: