Health Savings Account FAQs

Generally, your contributions and earnings are tax-free. This means you don’t pay federal taxes on the amount you contribute from your paycheck. In addition, your HSA earnings aren’t subject to federal income tax.

Your HSA contributions and earnings aren’t generally subject to taxation by most states and other taxing entities such as cities. However, this may change at any time. You should talk with your tax adviser or state department of revenue for more information.

If you’re enrolled in Medicare, you aren’t eligible to contribute to an HSA. If you didn’t have Medicare all year, you may be able to contribute for the months before you started Medicare. If so, you can open an HSA. If you had Medicare all year, you can’t open an HSA.
Each year, the Internal Revenue Service (IRS) sets annual contribution limits for HSAs. These limits are based on your HDHP coverage level (self-only or family). For 2020, the limit for self-only coverage is $3,550. The contribution limit for a family enrolled in a family high deductible health plan (HDHP) is $7,100.

You can contribute in a lump sum or multiple times throughout the year. You can change how much you contribute at any time during the year; you don’t need a life event change. If you’re age 55 or older, you can contribute another $1,000 per year. This is a “catch-up” contribution to help you save for health care expenses in retirement.

This means the amount you can contribute is based on a few things.

  1. Do you have self-only or family coverage?
  2. Did you have coverage under the HDHP plan for the entire year? If not, you may have to prorate how much you can contribute. Proration means you contribute just for the number of months you have the HDHP.
  3. Are you 55 or older?

You may want to speak with your tax advisor. They can help you understand how much you can contribute to your HSA. You might also find it helpful to review IRS Publication 969 at

If you have an HDHP and are 55 or older, you can contribute another $1,000 to your HSA each year. This is a catch-up contribution.

Example: You have a self-only HDHP coverage. For 2020, the contribution limit is $3,550. If you’re 55 or older and you remain eligible for the full year, you can contribute up to $4,550.

If your HDHP covers your spouse who’s 55 or older, they can also make a catch-up contribution. If your spouse wants to do this, they would have to open up their own HSA. Only one person can own an HSA. This means that your spouse can’t contribute their catch-up contribution to your HSA.

Keep in mind, once you’re covered under Medicare you’re no longer eligible to contribute to an HSA.

The amount that you can contribute to your HSA each year is based on a number of factors. These include your level of HDHP coverage (self-only or family), how long you had the HDHP, and your age. If you or anyone else contributes more than the IRS contribution limit, you have an “excess contribution.” You should remove the excess contribution from your HSA. You can do this online or in writing.

You should remove excess contributions by the tax filing deadline for that year. If you don’t remove the excess contribution, that amount will be subject to income taxes and a 6% penalty tax. If you have more questions about your contributions, you should talk with your tax advisor.

Once you have funds in your HSA, you have a few ways you can use your funds. You can make a payment to your provider from your HSA. If you have a debit card from ActWise, you can use it to pay for eligible health care expenses. If you paid out of your pocket, you can go online and pay yourself back.

When you pay yourself back, you can do so through a linked bank account. This will withdraw funds from your HSA and deposit them in to your personal account. It can take up to 48 hours for you to see the funds in your account.

To learn more about using your HSA account with ActWise, view this flyer.

You can use your HSA to pay for qualified medical expenses that you pay out of pocket. This includes qualified expenses for you, your spouse and your tax dependents. This is true even if they aren’t covered by your HDHP. To use your HSA funds, you must have received the care on or after the effective date of your HSA. You can find more information Refer to IRS Publications 969 and 502.
As the account owner, you have to make sure that you use your HSA funds for eligible medical expenses. You should keep all of your receipts. Also make sure to keep good records of your withdrawals. If you have more questions, you should talk with your tax advisor.
You can choose how to receive your statements. You may view and/or download them online or receive them through US Mail. There may be a fee for paper statements.
Yes. You can name one or more beneficiaries for your HSA. You can do this from your online account. You may have done this when you first registered your HSA online. If you didn’t or if you’d like to make changes, you can do so at any time online.
Your HSA belongs to you. If you leave your employer or cancel coverage under your health plan, you may continue to use your HSA funds for eligible health care expenses. We’ll send you a letter about the changes you can expect with your HSA. You’ll keep the same account and debit card. You’ll have to pay a monthly maintenance fee. This fee will be paid from your HSA on the first of each month.

You can still contribute to your HSA for the months that you were eligible to do so. You have until the tax filing deadline to contribute. The tax filing deadline is generally April 15 of the next year.

If you continue your health plan under COBRA or enroll in another qualified High Deductible Health Plan (HDHP), you may still be able to contribute to your HSA.

If you want to close your HSA, you’ll need to complete the Account Closure form. You can find this form in your online account. You can also call us to request a form. After you close your HSA, you can still view your deposits, payments, and withdrawals on the member website.

You can find more information at the ActWise website.