American Fidelity Employer Benefits Solutions

What is a Health Savings Account?

An HSA is an account that allows you to set aside money, tax-free, to pay for eligible medical expenses of an eligible individual, their spouse, and their tax dependents. You must be covered by a qualified High Deductible Health Plan (HDHP) to be eligible to make contributions to an HSA. 

What are the benefits of an HSA?

HSAs offer tax savings in three different ways providing you with more spendable income, regardless of your income level. Individuals may save money tax-free and build assets that they can use in their retirement years; and/or reduce their medical costs right now. Note: State tax treatment may vary depending on the state. Consult your tax advisor. HSAs afford you several tax advantages: Tax-free contributions Tax-free growth Tax-free distributions for eligible medical expenses You “own” the account: Balances roll over from year to year, there’s not a “use or lose” requirement Even if you chang

What happens to my HSA if I switch employers?

You own your HSA, and you may take it with you wherever you go. If you choose to keep your American Fidelity HSA open, you may continue to use the funds for eligible medical expenses even if you do not participate in a qualified HDHP. Contributions to your American Fidelity HSA may be done on an after-tax basis as long as you participate in a qualified HDHP. Contributions to your American Fidelity HSA may not be done on a pre-tax basis unless your new employer offers American Fidelity HSAs under their Section 125 Plan.

What if I am no longer covered by a qualified HDHP?

If you are no longer covered under a qualified HDHP, you may no longer contribute to your HSA. However, you may still use your remaining HSA funds to pay for eligible medical expenses.

Can my HSA be used to pay premiums?

Generally, HSA funds may not be used to pay for health insurance premiums tax-free. However, there are exceptions for some premiums that are eligible medical expenses for an HSA. You may use your HSA funds to pay for health insurance premiums if you are collecting Federal or State unemployment benefits, have COBRA continuation coverage through a former employer, or have Medicare part A, B, C, or D (supplemental medical coverage premiums do not qualify).

Do the funds in an HSA roll over?

Yes, unused funds roll over year to year, so you will not lose any money you don’t use.

Can you have more than one HSA?

Yes, you can have more than one HSA. You must be covered by a qualified HDHP to contribute to them, and your contributions combined must not exceed the annual maximum limit.

What can I purchase with my HSA?

The funds you withdraw from your HSA are tax-free when used to pay for eligible medical expenses. Refer to the HSA Eligibility List for a comprehensive look at many of the items covered by an HSA.