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To open an HSA, you must be enrolled in a high-deductible health plan (and not in any other health plan that is not an HDHP, subject to certain exceptions). Your annual deductible must be at least $1,100 for individuals and $2,200 for family coverage in 2007. The maximum annual out-of-pocket for in-network expenses cannot exceed $5,500 for self-only coverage and or $11,000 for family coverage in 2007. In addition, you cannot make, or have made on your behalf, tax-free contributions to an HSA if you are enrolled in Medicare, have received VA benefits during the past three months, or are a dependent on another individual's tax return. What "qualified medical expenses" can I pay for with an HSA? Not only does your HSA cover expenses such as office visits, emergency hospitalization and other traditional medical needs (before you reach your deductible), it also allows for the payment of certain qualified medical expenses not covered by your health plan (or otherwise compensated for), such as non-prescription drugs, hearing aids, home care and even hospital parking. A partial list is provided in IRS Pub 502 (available at www.irs.gov).1 Can I use my HSA to pay for medical insurance premiums? No. You cannot use your HSA to pay for medical insurance premiums unless you receive federal or state unemployment benefits, have COBRA continuation coverage, or if you have qualified long-term care coverage.1 What if I use my HSA to pay for a non-qualified medical expense? The amount spent on a non-qualified medical expense must be added to your gross income when you file your income tax return and will be subject to a 10% excise tax unless you are older than 65 (or another exception applies).1 Is the money in an HSA secure? Like all deposit accounts offered at Guaranty Bank, your HSA is FDIC insured up to $100,000, subject to applicable laws. Your money will be there when you need it for medical expenses. What happens to the money in my HSA if I leave my current employer? Similar to an IRA, an HSA remains with you regardless of your employer or the medical plans you choose in the future.2 Your ownership of the account continues even if you retire or leave the company. Unused money carries over year after year to help pay medical expenses. It's your money for your health care needs.1
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