3 Factors To Consider When Setting Up An HSA
So you’ve done some research into an Health Savings Account and you’re looking into opening one up at Sentry Bank. While HSAs are excellent for a number of reasons, they do have challenges you should be ready to face. Here are three factors to consider when signing up for an HSA.
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2. Multiple Health Plans Can Be Confusing
If you or your spouse have family coverage, then both are treated as having family coverage – unless they do not cover each other and cover other dependents.
If a spouse has single-coverage under a high-deductible health plan (HDHP) and the other spouse has family coverage under a non-HDHP plan (covering dependents other than the spouse) then the one with the HDHP would be able to contribute to the HSA under the single-coverage rate.
If either spouse is 55+ years old, then their respective “catch-up” contributions must only be applied to their own account.
3. Not All Employer Contributions Are Tax Deductible
If you’ve already met your annual HSA contribution limit – $6,750 for a family and $3,400 for an individual in 2017 – then any excess deposits are included in your annual income and you have to pay taxes on them.
This also means that if by tax time you have an excess balance pending rollover, then you will incur the penalty tax.