Great news! You can use your existing HSA account with our HDHP (High Deductible Health Plan) to pay for eligible services with pre-tax dollars from your HSA funds. If you don’t currently have an HSA but want one, we can assist you at the link below. If you have an HSA, you may use it with our HDHP to lower tax costs on your healthcare and pay for treatments. Individuals who establish an HSA will be pleased to learn that dental and vision expenses are also eligible to be paid with your HSA funds.
2021 HSA Limits Rise Modestly, IRS Announced
Health savings account (HSA) contribution limits for 2021 are going up to $50 for self-only coverage and $100 for family coverage, the IRS announced May 21, giving employers that sponsor high-deductible health plans (HDHPs) plenty of time to prepare for open enrollment season later this year.
The annual limit on HSA contributions will be $3,600 for self-only and $7,200 for family coverage. That’s about a 1.5 percent increase from this year. In Revenue Procedure 2020-32, the IRS confirmed HSA contribution limits effective for the calendar year 2021, along with minimum deductible and maximum out-of-pocket expenses for the HDHPs with which HSAs are paired.
What is a Health Savings Account?A Health Savings Account (HSA) is personal savings account for health care expenses that allow you to set aside money on a pre-tax basis. An HSA can be used immediately next year or can be saved for retirement. HSA Benefits Health Savings Accounts (HSA ) offered by banks are a win-win with a My Nova Healthcare High Deductible Healthcare Plan. Setting up an HSA can take less than 10 minutes, but the benefits are long-lasting.
- An HSA allows you to make tax-free deposits each year.
- You can withdraw funds from your HSA at any time to pay for medical expenses not paid by your High Deductible Healthcare Plan.
- You can use the account to pay for a spouse or other family member’s medical expenses—anyone that is part of your tax household.
- Your funds are never lost; instead, they continue to roll over year to year.
- As long as you are using your HSA funds for medical expenses, there are no fees associated with withdrawal. If you use funds for non-medical expenses before the age of 65, you will have to pay a 20 percent penalty and income tax. After 65, you can withdraw your HSA funds for non-medical expenses without incurring a liability; however, you will still owe income tax on the withdrawal. As long as you use your HSA funds for medical expenses, the leaves are tax-free.
A health savings account (HSA) can provide those with a High Deductible Healthcare Plan a nest egg for future medical expenses, or it can help pay for immediate, unexpected health issues. The most significant benefit of an HSA is the tax advantage. The money that goes into your HSA can be deducted pre-tax by your employer’s payroll, or it can be deducted from your income tax on your tax return. While your employer chooses the bank where your HSA will be housed, you are free to transfer your funds to another HSA institution at any time. If an HSA is not an option with your employer, you can still sign up for one on your own through either a bank, credit union, or brokerage firm of your choosing. If you are interested in opening an HSA, talk to your Nova Personal Care Advocate for more information. If you have an Individual High Deductible Healthcare Plan, you can contribute up to $3,600 to your HSA each year (this amount is specific to 2020 and fluctuates each year). If you have a family plan, the contribution maximum is $7,200. Also, if you are over the age of 55, you can contribute an extra $1,000 a year as a “catch-up contribution.” As stated above, you can withdraw money from your HSA for medical expenses at any time. Expenses can include deductibles, copayments, coinsurance, vision and dental care, and other out-of-pocket medical costs. Many holistic services also qualify as approved medical expenses (see IRS Publication 502 for details). They say sharing is caring. Your HSA allows you to share the wealth with a spouse or other family member, which means you can use your funds to pay for the medical expenses of anyone who is a part of your “economic family unit” or tax household. While there is no penalty or additional tax incurred if you withdraw funds from your HSA for medical expenses, there is a 20 percent penalty. The funds are subject to income tax if they are used for anything other than medical needs. After the age of 65, that penalty is waived, but you will still have to pay income tax on those funds if they are not used for health reasons. You can also use HSA funds to pay Medicare premiums for Part B, D, and C (Medicare Advantage) after the age of 65. Check out the Bank of America HSA User Guide for more information.
Download Bank of America HSA Information
- MyHealth HSA Mobile APP
- BOFA the Power of Two HSA and 401(k)
- Health Savings Account BOFA Investment Option
- Health Savings Account for Life, How it works
*2021 HSA Limits Rise Modestly, IRS Announced
On May 21, the IRS announced that Health Savings Account (HSA) contribution limits for 2021 are going up to $50 for self-only coverage and $100 for family coverage, giving employers that sponsor high-deductible health plans (HDHPs) plenty of time to prepare for the open enrollment season later this year. The annual limit on HSA contributions will be $3,600 for self-only and $7,200 for family coverage. That’s about a 1.5% increase from this year. In Revenue Procedure 2020-32, the IRS confirmed HSA contribution limits effective for the calendar year 2021, along with minimum deductible and maximum out-of-pocket expenses for the HDHPs with which HSAs are paired.
What Benefits an HSA Offer?
If you are browsing various health care coverage plans trying to find the best option for you, you will probably see some terms that you aren’t too familiar with. But, to choose the plan that best suits your lifestyle and needs, it’s essential to understand what each plan entails. You may see one term throughout health care, and insurance sites are “Health Savings Account” or “HSA.”
So, what is an HSA? And what are the benefits associated with having one?
An HSA is a savings account with funds allocated specifically for health care expenses and eligible for certain tax advantages. HSA accounts are only available for high-deductible health insurance plans, including NOVA Pathfinder Limited HealthCare High Deductible Healthcare Plans. If you’re wondering whether such an account would be right for you and your family, consider the following Health Savings Account benefits.
Not Subject to Taxation
Funds that you deposit into your HSA are deductible on your federal income taxes. Nothing is better than getting a bigger refund or paying a smaller amount to the IRS, and it’s ideal when this benefit accompanies the security offered by an HSA. Unlike other specialized savings accounts that impose tax penalties for withdrawals, you will not be taxed for taking funds out of your HSA—as long as the withdrawal is used to cover eligible medical expenses. Medical expenses are an inevitability, so stowing away funds in an HSA is a great way to minimize your tax bill while also planning your health care.
HSA Growth is Also Tax-Free
The interest rates on a Health Savings Accounts vary based on the institution with which you open it and the amount you initially deposit. Some accounts range in interest from .1 to .45% APY. The interest earnings of traditional savings accounts are subject to taxation if they surpass $10 a year, but HSA interest earnings are not. Like your initial deposit, the sum that you earn in interest will remain untaxed by the IRS. This is great news if you can deposit a substantial amount and find a bank that offers a high-interest rate on your funds.
Avoid the Headache of Unexpected Expenses
Many people hope that they can survive without seeing a doctor and avoid health care emergencies, but there are a million ways that an unexpected medical expense can happen. Car accidents, physical injuries, and serious diagnoses don’t discriminate. They can happen to anybody, and if you haven’t planned for the possibility of one, such an event can be financially devastating. Some of the expenses you may incur if you haven’t properly planned include the following:
- Collection Fees
- Interest on Account Balance
- Late Penalties
- Credit Card Interest
- Cost of Time Off Work
A health savings account makes it simple to prevent the additional expenses associated with medical emergencies.
Wait to Use Funds if Necessary
When people ask, “what is a health savings account?” they often have several questions beyond a simple definition. How long does it last? How is it taxed? When can I use it? An important feature of an HSA is that you can keep funds in the account for as long as you’d like without penalty. You do not need to have a minimum quota of activity to maintain the account, so you don’t need to use or withdraw the funds within a certain period. This is good since medical emergencies are not planned—so you never know when you will need to use funds. It may be six months after establishing your account, but it may also be six years.
Reimburse Expenses Incurred After Establishment
Many HSA account holders may worry about the timeframe for medical expenses incurred. Some accounts only cover expenses that occur within a certain period after establishment or enrollment. Still, with an HSA, any expenses incurred after establishing your account are eligible for coverage. This means that even if you have not claimed reimbursement for an expense a year after it occurred, so long as it happened after you established and funded your HSA, it may be eligible for coverage. There is no probationary or trial period that delays potential reimbursement from your account. This makes it simple to deal with any health care expenses that happen after establishing your account.
Maintain Savings Regardless of Insurance Status
With traditional insurance, one of the most stressful factors is the uncertainty of insurance coverage. Your policy could change at any moment, your premiums could go up, or it could be discontinued. Luckily, Nova Pathfinder Limited HealthCare™ offers the benefits of an HSA without the constant worry that your costs will go up. Our premiums haven’t changed since 2014!
One of the best advantages of an HSA is that it is not affected by changes like this. So long as your initial coverage is an eligible high deductible plan, any future changes in your coverage will not threaten your HSA savings. Suppose you incur a medical expense while covered by a plan that would be HSA ineligible. In that case, it is still eligible for coverage because you established your HSA with an eligible plan.
Cover Dental and Vision Expenses
Lastly, individuals who establish an HSA will be pleased to learn that dental and vision expenses are also eligible for reimbursement through their HSA. If you need to get new glasses or have a cavity filled, routine health care costs like these may not be covered by traditional insurance, but you can fund them through your HSA. Many health insurance policies do not extend vision and dental coverage, so an HSA provides a great way to ensure that these healthcare needs are met without the burden of paying them out of pocket. With Nova Pathfinder Limited HealthCare™, you don’t have to worry about these expenses, ever. Along with an HSA, you also get coverage for holistic dental care. This includes initial and routine checkups, cleanings, comprehensive dental examinations, dental trans-illumination, thermography, panoramic X-ray, and more!
Get the Benefits of an HSA with My Nova Healthcare
Whether you’ve missed your open enrollment period or are looking for a healthcare coverage plan that better suits your lifestyle, signing up for My Nova Healthcare is a simple and straightforward process.