Health savings accounts: What you should know before you enroll

October 4, 2016

piggy-bank-621068_1280Health care open enrollment is right around the corner and some consumers may have big decisions to make. It’s a good idea to do some homework before signing up for plans that offer health savings accounts (HSAs), according to research by the Employee Benefit Research Institute published in the New York Times.

Plans paired with HSAs can work for you if you understand how to take advantage of the tax benefits HSAs offer. The money is tax-free as long as it’s spent on eligible health care, and workers can take the money with them if they switch jobs. Although HSAs have been around for more than a decade, they are new to many workers and can be confusing. Read all health plan documents carefully and contact your human resources department to clarify anything that doesn’t make sense to you.

Here are some questions and answers about health savings accounts:

1. How much can I contribute to an HSA in 2017?
You can contribute up to $3,400 next year. That’s up $50 from the current year’s limit. When it comes to families, the maximum contribution will stay at $6,750.

2. Are funds contributed to an HSA by my employer available right away?
Experts told the New York Times that it depends, but it’s important you check with your employer so you know. Some employers make lump sum contributions that are available when the plan starts. Others might contribute monthly or even quarterly, and you have to wait to use the funds until the balance is higher.

3. Can veterans contribute to HSAs through workplace health plans, if they also receive health care through the federal Department of Veterans Affairs??
They can, but under certain conditions. The Internal Revenue Service recently clarified that veterans may contribute to an HSA while getting VA benefits, as long as the veteran has a disability rating from the VA that indicates the disability is connected to military service.

Have you benefitted from having an HSA? Share your story/tips at