Take Control of Your Health Care Expenses with an HSA

Paired with an eligible health insurance plan, a Health Savings Account (HSA) is a tax-advantaged savings account that allows you to pay for qualified medical expenses tax-free. HSA's increase your health insurance buying power four-fold:

  • HSA savings grow tax deferred – You can use them for qualified health care expenses or for retirement after age 65.
  • HSA savings are never taxed – When used for qualified medical expenses, your HSA savings are not taxed.
  • Lower your taxable income – Deposits to an HSA, within legal limits, are deductible off of federal gross income.
  • Lower your premiums – Health insurance plans with an HSA often cost less than most copay plans.

We Know HSA Plans, We Invented Them

At United Healthcare, we were at the forefront HSAs more than a decade ago.

  • Simple design – Once you meet your deductible, your plan pays 100% of covered expenses for the calendar year.
  • No “use it or lose it” catch – An HSA acts like an employer-provided flexible spending account, except your money is yours to keep even if you don’t spend it that year.
  • Access to one of the nation’s largest networks of doctors and hospitals – Quality health care at substantial discounts nearly anywhere you live or travel in U.S.

What Are HSA Qualified Medical Expenses?

The IRS determines what medical expenses are qualified for tax purposes. These can change at any time. But generally, services or items purchased to help ease or prevent a physical or mental defect or illness constitute a “qualified” medical expense.1

IRS publication 502 provides a comprehensive list of all current qualified expenses. But, please always consult your tax advisor should you require specific tax advice.

You should know that if you withdraw funds for non-qualified health care costs, they will be taxed at your income tax rate. Plus, you’ll incur a 20% tax penalty if you’re less than 65 years old.

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HSA Qualified Expense Example

Examples of qualified medical expenses:

  • Vision care – exams, glasses, Lasik eye surgery
  • Dental care – cleanings, braces, fillings
  • Prescription drugs
  • Long-term care expenses, including long-term care insurance premiums
  • Health insurance deductibles, copays, coinsurance
  • Mental health care (there are some exceptions)
  • Transportation that is related to medical care

HSA Non-Qualified Expense

Examples of medical expenses that are NOT qualified:

  • Health insurance premiums, except when receiving federal or state unemployment benefits
  • Cosmetic plastic surgery
  • Health club dues
  • Hair transplant
  • Teeth whitening

HSA Plan Options

Insurance plans that can be used with a Health Savings Account (HSA) must meet certain deductible ranges and out-of-pocket maximums set annually by federal law.2

We offer HSA insurance plans3 with a selection of deductibles to fit your needs and budget. And, we offer them as a complete HSA package – a qualified health insurance plan along with an HSA account set up with Optum Bank, our health care bank of choice, providing FDIC insurance for your savings. It’s one-stop shopping!

HSA Insurance Plan Deductibles and Deposit Options for 2016:

  2016 Singles Families
  Health Plan Minimum Deductible4 $1,300 $2,600
  Health Plan Out-of-Pocket Limit4 $6,550 $13,100
  Savings Account Maximum Deposit4 $3,350 $6,750

Frequently Asked Questions

How Do Health Savings Accounts Work?

In order to use your Health Savings Account funds tax-free, you must first establish your HSA account before you incur qualified medical expenses.1 Otherwise, the expenses will not qualify for tax purposes.

How Do I Use My HSA Savings?

Once established, accessing your savings in your HSA account is easy with Optum Bank℠, our health care bank of choice:

  • You’ll receive a Health Savings Account Debit MasterCard® to be used to pay for qualified medical expenses.
  • Your HSA debit card can be used to get cash for medical expenses at any ATM displaying the MasterCard® brand mark.
  • At OptumBank.com you can take advantage of free online bill pay.
  • Your Optum Bank℠ welcome kit will include a current schedule of all fees. There is a $3 monthly maintenance fee which is waived when your average balance exceeds $5,000.

What Are My Investment Options with My HSA Account?

You can leave your savings in your interest-bearing Optum Bank℠ HSA account, or, when you achieve a minimum balance of $2,000, you can choose to place your savings in select mutual funds. Unlike your savings, however, investments are not FDIC-insured, are not guaranteed by Optum Bank℠ and may lose value over time.

Optum Bank℠ offers a broad list of well-established mutual funds available for investment.

How Much Can I Contribute to My HSA?

Funds contributed to your Optum Bank℠ HSA are FDIC insured. The maximum yearly contributions (and their associated tax deductions) are determined each year by the IRS.5

Unless certain circumstances exist, there is no minimum contribution required to open an HSA, and you do not have to contribute the maximum each year. But regular contributions will help you save more for medical expenses and maximize the tax benefits HSA plans offer.

How Do I Get My HSA Tax Savings?

Enjoying the tax-advantages of your HSA is easy:

  • You will be sent a 5498 tax document showing the amount you contributed to your HSA for each tax year. Your statement will arrive after April 15th of the following year. You can deduct this amount, provided it is less than or equal to the maximum allowable contribution.
  • Account holders, employers and many others can make contributions outside the plan structure which can result in tax deductions and a reduction in your adjusted gross income before any itemized or standard deductions are considered.

1 Qualified medical expenses may not be covered under your plan.

2 Adjusted annually in accordance with the Consumer Price Index. All of our high deductible insurance plans offered with an HSA meet the IRS requirements.

3 Availability varies by state.

4 Adjusted annually in accordance with the Consumer Price Index. All of our high deductible insurance plans offered with an HSA meet the IRS requirements.

5 U.S. Department of the Treasury, Resources: Health Savings Accounts, 2013.

Health savings accounts (HSA) are individual accounts offered by Optum BankSM, Member FDIC, and are subject to eligibility and restrictions, including but not limited to, restrictions on distributions for qualified medical expenses set forth in section 213(d) of the Internal Revenue Code. This communication is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment, and restrictions. Federal and state laws and regulations are subject to change. HSA is not insurance. For costs, benefits, exclusions, limitations, eligibility, and renewal terms, call a licensed Product Advisor to discuss your health insurance options at (866) 310-7451 or get a free health insurance quote.