Health Savings Accounts (HSA), Health Reimbursement Accounts (HRA) and Flexible Spending Accounts (FSA) are accounts where you put aside money to use on health care expenses. Vermont Health Connect received many questions from employers about how these tax-favored accounts work with Vermont Health Connect plans.
In response, Vermont Health Connect created a fact sheet to answer frequently asked questions about HSA, HRA and FSA accounts based on Internal Revenue Service (IRS) guidance.
Here is a link to an IRS publication on these accounts, as well.
It's important to know:
- HSAs only work with high-deductible health plans. Vermont Health Connect offers several of these plans and will be able to tell you which plans work with an HSA. You can also call your insurance carrier to find out which plans work with an HSA.
- The money you put into an HSA is tax-deductible.
- There is a limit to how much you can contribute to an HSA each year. For 2018, it is $3,450 for individuals and $6,850 for families.
- If you are on Medicare, you cannot contribute to an HSA. But, you can use your money in your HSA. This handout answers questions about HSAs and Medicare.
You can use your HSA money whenever you want for medical and dental expenses that the IRS lists in Publication 502. Talk to a tax preparer if you have questions about HSAs and your tax return.