Who can contribute to an HSA and how much can they ...



Health Savings Accounts-HSA Questions and AnswersWho can contribute to an HSA and how much can they contribute?Contributions to HSAs can be made by anyone (individual, group, family member or any other person). For 2011, annual contributions cannot exceed $3,050 for individuals and $6,150 for families. If contributions are made by the group, they are not taxable to the member (excluded from income).Can money be put in as a lump sum or monthly?Yes, contributions can be made either way as long as group and member contributions do not exceed the maximums allowed under the tax law.Do health savings account funds roll over year after year and get invested?Yes. Funds not used from the health savings account each year stay in the account and continue to grow tax-free interest to supplement health benefits, similar to an IRA.Can catch-up contributions be made to a health savings account?Individuals age 55 and older who are covered by a high-deductible health plan can make additional catch-up contributions. The 2011 catch-up contribution amount is $1,000. Contributions must stop once an individual is enrolled in Medicare. If both spouses are eligible individuals, both may make catch-up contributions.What happens to the HSA if the account holder is deceased?If an HSA accountholder becomes deceased, the following applies:The spouse inheriting the HSA is treated as the owner and the HSA can continue to be used as an HSA.If someone other than the spouse inherits the HSA: The account will no longer be treated as an HSA The account will become taxable to the recipient (including the estate of the individual)The taxable amount will be reduced by any qualified medical expenses incurred by the deceased individual before death and paid by the recipient of the HSA. The taxable amount will also be reduced by the amount of estate tax paid due to inclusion of the HSA into the deceased individual's estate. Members should consult their personal tax advisor for specific advice. What happens to the HSA account when a member leaves the company? Can that member elect COBRA and continue to contribute to the account even though the group is not?When a member leaves a company, the member retains the money. Members may find an HSA-qualified plan on their own or with their new group and continue to contribute to the account. If a former member receives non-HSA qualified insurance, he or she can still spend out of the account tax-free on medical expenses.Does the deductible for a Flexible Blue-HSA plan run on the calendar year? Yes, the deductible is set for the calendar year. If a group enrolls in a Flexible Blue plan in the middle of a calendar year, the full yearly deductible must still be met before benefits are paid. On the other hand, eligible contributions to an HSA account are calculated monthly. Members who enroll mid-year can only contribute a prorated portion of the total eligible contribution amount. For example: A group enrolls in a Flexible Blue Plan 2 paired with an HSA account in July. The total deductible of $1,250/$2,500 must be met before benefits are paid. Members, however, will only be allowed to contribute $625/$1,250 in pre-tax income to the account.Are there individual deductibles or out-of-pocket maximums for a family contract with Flexible Blue?On a family contract, the full family deductible and out-of-pocket maximum must be met by one or a combination of all of the members. If a contract goes from single to family or vice versa, what deductible must be reached before claims are paid?If a Flexible Blue health plan member’s status changes from single to family coverage during the plan year, the member and his or her family are responsible for meeting the full family deductible. This means that even if the member met the deductible under a single contract, once he or she is covered by a family contract, their family must meet the full family deductible before any additional claims are paid. A member has the Flexible Blue $10/$60 with Mandatory MAC drug and he/she reaches the drug copay maximum. If they get a drug not on the formulary, do they need to pay the difference between the allowed amount and the charge since they have no copayment? Yes. With the Mandatory MAC rider, the member is responsible for the brand copay plus the difference in cost between the brand drug and the generic (or MAC) drug price whether the physician requires the brand or the member requests the brand. After the copay maximum is reached, the copay is waived but the member is still responsible for the difference between the brand and the generic (MAC amount). For prescriptions filled at nonparticipating, out-of-network pharmacies, the 20 percent out-of-network copay will not be applied toward the member’s annual Flexible Blue deductible, out-of-pocket copay maximum or lifetime dollar maximum. ................
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