What does it mean to have my HSA checking account FDIC-insured?
The custodian of ACS|BNY Mellon HSA Solution is The Bank of New York Mellon (BNY Mellon). Deposits to the HSA checking account are FDIC-insured up to the FDIC coverage limit.
The Federal Deposit Insurance Corporation, or FDIC, is an independent agency of the United States government. The FDIC protects an account owner's deposits in the unlikely event of the failure of the insured bank or savings institution.
- FDIC deposit insurance covers the balance of each depositor's account, dollar-for-dollar, up to the insurance limit, including principal and any accrued interest through the date of the insured bank's closing
- The FDIC does not insure the money you invest through the investment component of your HSA.
Please visit the FDIC Web site at www.fdic.gov for more details.
Can I contribute stock to my HSA?
No. Only cash may be contributed to your ACS|BNY Mellon HSA. You may set up an HSA investment account with investment options, such as mutual funds or securities, which you may purchase with your HSA funds.
Does how much I contribute to my IRA limit how much I can contribute to my HSA?
No. Your contributions to your HSA are limited to a maximum annual contribution adjusted each year by the IRS. Your contributions to an IRA have no bearing on your HSA and vice versa.
What about the reduction in HSA maximum for IRA rollover amount?
Can anyone make catch-up contributions to an HSA?
Yes. If you are 55 or older and covered by a qualified HDHP, you can make additional catch-up contributions each year until you are enrolled in Medicare benefits. The maximum annual catch-up contributions is $1,000.
If both spouses have HSAs, then each is permitted full catch-up contributions, provided they are covered by a qualified HDHP for the entire year.
If you will reach age 55 before the close of the calendar year, you may make a full year's catch-up contribution, provided you are covered by a qualified HDHP no later than December 1st.
I am 65 years old, which makes me eligible for Medicare, but I'm still working and have kept my employer's health plan instead of enrolling in Medicare. I am enrolled in the HDHP offered by my employer. Am I eligible to make catch-up contributions?
Yes. If you are 55 or older and covered by a qualified HDHP, you can make catch-up contributions each year until you are enrolled in Medicare benefits. The maximum annual catch-up contributions to an HSA is $1,000.
If both spouses have HSAs, then each is permitted full catch-up contributions, provided they are covered by a qualified HDHP for the entire year.
If you will reach age 55 before the close of the calendar year, you may make a full year's catch-up contribution, provided you are covered by a qualified HDHP no later than December 1st.
How much can I contribute to my HSA?
For 2013, the combined maximum contributions to your HSA, including any made by your employer to your account, are $3,250 if you have individual coverage and $6,450 if you have family coverage. If you turn age 55 or older in 2013 or after, you may add up to $1,000 more as a "catch up" contribution.
These amounts are valid as long as you enroll in qualified HDHP coverage before the first day of December, meaning you have held at least one full month of HDHP coverage, and so long as you continue to maintain qualified HDHP coverage for the next 12 months (Thirteen months in total).
May I make deposits in more than one HSA?
Yes, you may have more than one HSA and you may contribute to them all. However, this does not give you any additional tax advantages, as the total contributions to your accounts cannot exceed your maximum annual contribution. Contributions from your employer, family members, or any other person must be included in the total.
What is the tax treatment of my HSA contributions?
Contributions to your ACS|BNY Mellon HSA are not subject to federal taxes or state tax (for most states) unless used to pay for non-qualified expenses.
Contributions may be made either directly by you to your HSA or through payroll deduction, if your employer participates. Either way, your contributions are not subject to federal income tax, FICA (Social Security and Medicare) tax and for most states, state income tax. If you make your contributions through payroll deductions, the amount is taken from your payroll before taxes are calculated. If you make deposits directly to your account, you may take an "above the line" deduction when filing your annual tax return.
"Above the line" means you reduce your taxable income regardless of whether you itemize or use the standard deduction on your income tax form. You may deduct the contribution amount, subject to the maximum annual contribution limits from your taxes, at filing time.
Employers may make contributions to your account as well; while you do not take a deduction for these contributions, they are excluded from your gross income.
What is the tax treatment of contributions made by a family member or anyone else to my HSA?
If a family member or anyone else makes a contribution to your HSA, the tax advantages apply to you and not the person making the contribution. You may deduct the contribution amount when filing your annual income taxes, in the same way you would if you had deposited the post-tax contribution on your own.
Employers may make contributions to your account as well; while you do not take a deduction for these contributions, they are excluded from your gross income.
All contributions to the account are combined and subject to maximum annual contribution limits.
Can I make one lump-sum contribution to my HSA early in the year or spread contributions out during the year?
Contributions for the taxable year can be made in one or more payments at your convenience. If your employer contributes to your account, they too may make either a lump sum or periodic deposits to your account.
The IRS determines maximum annual contributions by your coverage type (single or family) annually. The annual total of all contributions to your account, from all sources, cannot exceed the IRS maximum annual contribution.
What is my maximum annual contribution to my HSA if our family coverage includes both individual (embedded) and family (umbrella) deductibles?
If the HSA account owner has family coverage with individual deductibles for each family member, they are still subject to a 2013 maximum annual contribution limit of $6,450 plus up to $1,000 in additional catch up dollars if they turn 55 or older during the year.
I have an HSA from my previous employer. I am now enrolled in an HMO. Am I eligible to make contributions to my HSA now?
No. You are not eligible to contribute because you are not covered by a qualified HDHP. However, any distributions you make from your ACS|BNY Mellon HSA for qualified expenses continue to be free of federal taxes and state tax (for most states) and excludable from your gross income.
Remember that unused HSA dollars roll over from year to year. You may invest unused HSA dollars in investment options, providing the opportunity for funds to grow.
What are "catch-up" contributions?
Catch-up contributions are permitted contributions made by an eligible participant that are in excess of maximum annual contribution limits. Eligible participants are HSA owners who are covered by a qualified HDHP and age 55 or older.
Catch-up contributions to your HSA are available for the calendar year in which you reach age 55. If you will reach age 55 before the close of the calendar year, you may make a full year's catch-up contribution, provided you are covered by a qualified HDHP no later than December 1st.
My spouse is contributing to a health FSA that reimburses expenses before the deductible is met. Can I make contributions to my HSA if I participate in a qualified HDHP?
No. A general-purpose health FSA or HRA that pays first-dollar benefits is the same as family coverage, because it is available to reimburse the qualified expenses of the employee and the employee's spouse and dependents. Consequently, if either you or your spouse participates in a general-purpose health FSA or HRA, neither of you will be eligible to contribute to an HSA.
What happens if I contribute more than my maximum annual contribution to my HSA?
If you contribute more than your maximum annual contribution to your HSA, you may withdraw the excess without penalty up until April 15 of the following year. After that time, the funds are subject to both ordinary income and an excise tax.
If I contribute more than my maximum annual contribution can I take the full amount as an above the line deduction?
No. You cannot take the excess as an above the line deduction. You have until the filing date of your federal tax return to take a distribution of the excess contribution from your HSA without incurring a 6 percent excise tax. The amount of the excess contribution is includable in your gross income for tax purposes.
If I make contributions to my HSA through pre-tax payroll deductions (Section 125 cafeteria plan), can I change the per payroll deduction at any time?
Based on your employer's cafeteria plan rules, you may be allowed to increase, decrease, start or stop your ACS|BNY Mellon HSA contributions at any time, provided that the change is prospective only. Remember you are still restricted to your maximum annual contribution.
My qualified HDHP coverage was effective January 1, but I didn't establish my HSA until June. Can I still make my maximum annual contribution, or is my contribution reduced by the number of months I didn't have an HSA?
You can still make your maximum annual contribution. Your eligibility to contribute to an HSA is determined by the effective date of your qualified HDHP coverage. Your contribution for any given year depends on your enrolling in HDHP coverage by December 1st of that year and maintaining qualified HDHP coverage for the next 12 full months (13 months total).
The amount you can contribute is not determined by the date you establish your account unless you maintain qualified HDHP coverage for less than 12 full months, in which case the maximum is prorated by the number of full months of coverage.
What is my HSA establishment date?
Generally, the Establishment Date of your HSA custodial account is the later of the effective date of your qualifying HDHP coverage or the date you provide evidence of intent to open the account (e.g., completion of some type of form or application requiring your signature that acknowledges your desire to open an HSA), notwithstanding the fact that deposits or a signature card have not been received, required regulatory and compliance activities have not been completed and the account is not yet operational. The "Establishment Date" of an HSA is important because you can only receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses incurred after the date the HSA is considered "established". Because you are ultimately responsible for determining which expenses are reimbursable from your HSA, you should consult with your personal tax advisor to determine how IRS guidance on this issue should be applied to your specific situation.
I opened my HSA with a minimum deposit when I enrolled in my HDHP. I have not yet reached my maximum annual contribution. What is the last date that I may deposit the remainder of my maximum annual contribution and still take an "above the line" deduction for the year?
You have until April 15, 2013 for contributions with respect to 2012 HDHP coverage, and until April 15, 2014 for 2013 contributions.