Health Savings Account (HSA)

Internal Revenue Code (IRC) Section 223 allows individuals who are covered by a compatible health plan, often referred to as a High Deductible Health Plan (HDHP), to set aside funds on a tax-free basis up to the contribution limit to pay for certain out-of-pocket medical expenses. Health Savings Accounts have a triple tax benefit—funds go into the account tax-free, funds grow tax-free, and remain completely tax-free when used for eligible medical expenses.

Here are some other unique aspects of HSAs as defined in IRC Section 223:

• They are owned by you, the participant.
• They can be funded by you, your employer, or even a third party.
• HSAs carry over from year to year and are portable if employment changes.
• The IRS sets the annual contribution limits and limits the types of health plans that qualify for an HSA.
• HSA funds can continue to be used for eligible medical expenses, even if you become ineligible to contribute in the future.

Contributions can be made by you, your employer, or a third party (e.g. family member or friend). Contributions can either be made on a tax-free basis through a Section 125 Plan or directly into the account on a tax-deductible basis. The IRS sets the maximum annual contribution limit. Generally, HSA contributions do not have to be prorated; however, certain exceptions and conditions apply. Contributions can be made at any time up until the tax filing deadline, typically April 15.

2. You cannot be covered by any non-qualified health plan as it constitutes ineligible coverage. Examples of ineligible coverage include:

• Enrollment in a General Medical Flexible Spending Account (FSA) or Health Reimbursement Account (HRA).
• Coverage under a spouse’s Medical FSA or HRA.
• Coverage under a spouse’s health plan that is not an HSA-compatible health plan.
• Enrollment in a prescription plan which provides benefits before the health plan deductible is satisfied. Note: Programs which provide discounts (but not insurance) on prescriptions are acceptable.

3. You cannot be enrolled in Medicare.

4. You cannot be claimed as a dependent on another person’s tax return.

ACCOUNT COMMUNICATIONS

• Account Welcome Email: Provides confirmation that your account has been opened, along with information on “what to expect”.
• Welcome Letter: Provides detailed account information, including account number and account terms.
• Beniversal Card: Your Beniversal Card will arrive separately. If you already have a Beniversal Card for another account, your HSA funds will be added to your existing card as they become available in the HSA. Please review the card carrier and Cardholder Agreement provided with the card. Once you receive your card, you will need to call to activate it.

You will also receive a number of ongoing communications. These include:

• Periodic Statements: You will automatically receive a paper statement. There is a fee from the bank which is deducted from the balance. To avoid this charge, you can opt to receive electronic statements by logging into your HSA at BRiWeb.
• Tax Documents: An HSA requires some tax reporting. You will receive a year-end summary and IRS Form 1099-SA by January 31 of each year. Your employer will also report pre-tax contributions on your W-2.  IRS Form 5498-SA is mailed between April 15 and May 31 as confirmation of the contributions made for the prior year.

USING YOUR HSA ACCOUNT

• Beniversal Card: You will automatically receive the Beniversal Card at enrollment for your HSA. The Beniversal Card can be used at merchants providing medical products and services.
• Online Bill Pay: You can pay providers or reimburse yourself directly through bill pay. Bill pay is accessible by logging into your HSA.
• Online Transfers: Online transfers allow you to send or receive funds from a personal checking or savings account to your HSA. Online transfers is accessible by logging into your HSA.