How to Use a HSA

To contribute to an HSA, you must have a qualifying high-deductible health plan (HDHP). Whether you have individual health insurance or family coverage, to use the account, you or your employer contribute money from your paycheck before taxes directly into the account. You may also opt to contribute additional dollars to the account each month or just one time. This can be helpful if you have an ongoing medical condition or a big expense coming up, such as a surgery.

What is a high-deductible health plan?

HDHPs have higher deductibles (the amount you contribute toward your medical expenses) than traditional plans. The benefit is when a HDHP is combined with a HSA, you can use tax-free money to pay certain medical bills. A HDHP may also come with a lower monthly premium.

HDHPs come with a minimum deductible and maximum out-of-pocket costs.

You save money in your health savings account just as you would in any other interest-bearing account. You can chose to spend your tax-free dollars on certain medical expenses, save for future medical bills, save for retirement and/or invest it.

There are limits on the amount of money you can contribute each year:

• For 2021, you can contribute up to $3,600 for individual coverage and up to $7,200 for family coverage
• For 2022, you can contribute up to $3,650 for individual coverage and up to $7,300 for family coverage

To spend money from the account, you typically receive a debit card that you can use to pay for qualifying healthcare expenses. (You can find a list of qualifying medical and dental expenses at healthcare.gov, or find out more from the Internal Revenue Service about tax advantages to offset healthcare costs here.)

What you don't spend continues to grow, year after year. After age 65, you can choose to continue to use your account tax-free for healthcare expenses or you may use it for other purposes as taxable income.

Employers may choose to offer HSAs as a benefit to their employees as part of a company-sponsored health insurance plan. Individuals enrolled in HDHPs may also open their own HSAs.

HSA Eligibility

To be eligible to set up and contribute to a health savings account, you:

• Must be covered under a high-deductible health plan (HDHP)
• Can have no health coverage other than the HDHP (certain exceptions may apply)
• May not be enrolled in Medicare
• Cannot be claimed as a dependent on someone else's tax return

If you are married and meet these requirements, you are eligible, even if your spouse has non-HDHP family coverage, as long as your spouse’s coverage does not cover you. If your spouse has an HSA and you also want one, you must open a separate HSA. You can’t have joint health savings accounts.

If you’re a veteran, you may be eligible even if you receive hospital care or medical services under any law administered by the Secretary of Veterans Affairs for a service-connected disability.

How to Sign Up for a Health Savings Account

WEX sets up and administers HSAs. Please contact WEX at 877-765-8815 or visit the WEX website to learn if you are eligible or find out answers to your questions, including:

• How Much Should I Contribute to My HSA?
• Why Might an HSA Make Sense for My Family?
• How Can an HSA Help Me Build Wealth?