An HSA works like a personal bank account, using tax-free contributions and rolling over any unused balances.
Eligibility for an HSA
To be eligible for an HSA, you must meet all of the following requirements:
- You are covered under a qualified high deductible health plan (HDHP).
- You are not covered under another health plan that is not an HDHP.
- You are not enrolled in Medicare benefits.
- You are not eligible to be claimed as a dependent on another individual's tax return.
- You have HDHP coverage on the first day of the month in which the account is opened.
HSA Contribution Limits
limited to the amount set by law
|Add catch‐up contribution
available for ages 55 or older
|Maximum contribution limit
with catch‐up contribution for ages 55 or older
1Limits subject to change.
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If you use funds from your HSA account for something other than a qualified medical expense, the money is subject to income tax and a tax penalty if you are under age 65. If you are age 65 or older, the tax penalty does not apply. For a list of qualified medical expenses, refer to IRS publication 502.
The IRS is responsible for determining qualified medical expenses. For a list of qualified medical expenses, refer to IRS publication 502. It is the HSA holder’s responsibility to ensure the funds from the HSA are being used for qualified medical expenses. Copies of receipts for qualified medical expenses should be kept for tax and record keeping purposes.
Contributions can be made in the following manner:
- Employer Pre-Tax Contributions – Your employer may directly deposit funds to your Johnson Financial Group HSA account through payroll deduction.
- In Person Contributions – You or a family member can deposit funds to your HSA at any of our convenient branch locations.
- One-time IRA Distribution – You may make a one-time IRA distribution from your existing IRA into your HSA. This is referred to as a "qualified HSA funding distribution" and must be made directly by the financial organization of the IRA to Johnson Financial Group. The funds distributed must be from an IRA to an HSA owned by the individual who owns the IRA. HSA funding distributions are included in your total contribution amount for any given calendar year and you may not exceed the contribution limits. Contact a Johnson Financial Group advisor to initiate an IRA distribution to fund your Johnson Financial Group HSA.
While you will no longer be able to contribute additional funds to your HSA, you may continue to use the money already deposited to your HSA for qualified medical expenses.
At the time of account opening, you will name a beneficiary on your HSA. If your beneficiary is your spouse, the accounts will immediately become your spouse’s HSA. If your beneficiary is someone other than your spouse, the account ceases to be an HSA as of the date of your death. The beneficiary must claim the amount of the HSA with their income for the year when the death occurred. If you do not name a beneficiary, the funds in your HSA will go to your estate.
Johnson Financial Group will send the following tax forms to you and the IRS annually:
- 1099-SA – reports all distributions from your HSA
- 5498-SA – reports all contributions to your HSA
Contributions can be made to your HSA up to April 15 or the tax return due date of the following tax year. For example, if you qualify for an HSA in 2020, you may deposit funds for that year until April 15, 2021. Generally contributions that are made between January 1 and April 15 for the previous year are called prior-year contributions. HSA owners must make a written election to treat a contribution as a prior-year contribution. If you are making a prior-year contribution, please see an advisor for assistance.
Any individual, including an eligible individual’s employer, may contribute to an HSA on behalf of an HSA owner.
Yes. You may appoint a POA on your HSA. Your POA would have access to your account and the ability to order a Johnson Financial Group HSA Debit Card. If you are interested in adding a Power of Attorney to your account, please contact an advisor.
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