Health Savings Account (HSA)
A Washington Trust Bank Health Savings Account (HSA) is a tax-exempt account established for the purpose of paying or reimbursing qualified medical expenses of you, your spouse and your dependents. And contributions to an HSA are tax deductible, the earnings grow tax deferred, and distributions to pay or reimburse qualified medical expenses are tax free.
- HSAs allow you to make tax deductible contributions. Earnings, including gains, in the HSA are tax deferred. Plus, your distribution (the contributions and earnings you withdraw) are tax free as long as they're used to pay for qualified medical, dental, and vision expenses.
- You can use the money in your HSA to pay for—or reimburse—qualified medical, dental, and vision expenses for you and your family members. Those expenses could include health insurance deductibles, copayments, certain prescription medications, and out-of-pocket expenses.
- You've heard the phrase "use it or lose it." Well, an HSA isn't like that at all. Your HSA balance will carry forward year after year, allowing you to budget for your health expenses and build up your savings to cover qualified medical, dental, and vision expenses when the need arises.
- An HSA is owned by you, not your employer. So, it's your responsibility to maintain the HSA. Ask a Washington Trust Bank representative for more details.
|Health Flexible Spending Account||Health Reimbursement Arrangement||Health Savings Account|
|What type of health plan is required?||Any type of plan||Any type of plan||HDHP required IRS-defined parameters|
|Who owns the account?||Employer||Employer||Employee|
|Who can fund the account?||Employee||Employee||Employee, Employer, Others|
|Can the account accrue interest?||No||Yes (but not typical)||Yes|
|Do assets carry over or roll over to the next plan year?||Limited||Depends on how the plan is set up||Yes|
|Is the account portable?||No||No||Yes|
|Is there a catch-up contribution provision?||No||No||Yes|