Health Savings Account

HSAs can be established by individuals who are covered by a qualified, high-deductible health insurance plan, those not covered by any other health insurance that is not a high-deductible plan, those not enrolled in Medicare or those who have not received VA Medical Benefits in the previous three months. Individuals cannot be claimed as dependent on another person’s tax return.

Contributions to an HSA: Each year between January 1 and April 15, individuals can designate HSA contributions to the “current tax year” or “prior tax year.” An HSA account offers tax benefits, as the distributions from it are tax-free, provided that they are used for "qualified medical expenses." It is advisable to consult a tax advisor for expert advice regarding the taxation of your account. All contributions using electronic deposit, payroll deduction, or automated posting will be reported as “current year” by CoVantage. There is no “use- it- or-lose-it” provision with an HSA. Your year-end balance is carried over and can be used for medical expenses in future years. HSA balances belong to the individual. Your account balance stays with you even if you change employers.