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Five questions and answers about health savings accounts (HSAs)

To celebrate National HSA Awareness Day, our experts answered questions to help you better understand the added benefits of an HSA-qualified plan.

With open enrollment, many are seeking to better understand their benefit options. Below are the top 5 questions about health savings accounts.

What are some of the key benefits that health savings accounts bring?

With an HSA, the money an accountholder puts into the account can grow over time to be used for future medical expenses. HSAs also allow for accountholders to make catch-up contributions if they are age 55 or older. This opportunity to save money on a tax-free basis will make HSAs a solid complement to a 401(k) and/or IRA when looking at future savings.

HSAs also have a triple tax advantage:

  • Money goes into the account tax-free
  • Money earns tax-free interest
  • Investment earnings and money comes out tax-free, when used for eligible expenses

What are the maximum HSA contribution amounts for 2021 and 2022? 

Contributing to an HSA helps consumers pay for medical expenses they have now while also saving for medical expenses they will have in the future. In 2021, if you have self-only coverage you can contribute up to, $3,600 or for family coverage up to $7,200. For 2022 if you have self-only coverage you can contribute up to, $3,650 or for family coverage up to $7,300.

For both 2021 and 2022, if you are 55 or older, you can contribute an extra $1,000 at the end of the year. By contributing the maximum amount to their HSA each year and considering investment options, accountholders will be setting themselves up to cover healthcare expenses both now and in the future.

Who are HSAs for?

Every consumer can benefit from opening an HSA. High deductible health plans (HDHPs) paired with an HSA were made as a way to help control health care costs and each accountholder can decide how much money to set aside for health care costs. HSAs are a great way to build tax-free wealth through deductible contributions while investing for growth over time and taking tax-free distributions and reimbursements when needed.

What is the difference between an HSA and an FSA?

Unlike FSAs, an HSA allows you to roll over your entire unspent amount year after year and calculates, compounds and credits interest monthly based on the applicable rate for different tiers of the account balance. Money you put in an HSA will always be yours, whereas you can’t take your FSA money with you if you change jobs or retire. The money sitting in an HSA isn’t taxed at any point during the account’s life and neither are any gains if some of the money in the HSA is invested. Money withdrawn for qualified medical expenses is also tax-free.

What are HSA eligible items?

You can use your balance to pay for qualified medical expenses for you or your covered dependents. Some examples include:

  • Your deductible
  • Dental treatments, exams or cleaning costs
  • Prescription drug costs
  • COVID testing and treatment
  • Face masks and other PPE
  • Vision expenses such as contact lenses or glasses
  • Chiropractic or acupuncture fees
  • Hand sanitizer
  • Eye surgery

You can find a full list of HSA eligible expenses for in IRS Publication 502‡.

HSAs are an effective way for individuals to take control of their financial well-being both now and in the future. People should ask their employer what decision-support tools they have to help make health care decisions stress-free. Don’t be afraid to seek out an advisor who can help with your retirement planning.

Learn more about UMB Healthcare Services, which ranks fifth in total accounts and seventh in total deposit assets among all HSA providers (Source: 2021 Devenir Mid-year HSA Market Statistics & Trends Report).


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When you click links marked with the “‡” symbol, you will leave UMB’s Web site and go to Web sites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other Web sites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.
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