Hsa who is eligible

Eligible expenses may include egg storage, egg donor costs, infertility monitors, in-vitro fertilization, and sperm washing. Surrogate costs associated with a qualified dependent of the taxpayer are reimbursable and may include such things as blood compatibility testing and psychological exams. If the surrogate mother is not a qualified dependent of the taxpayer, the costs that the surrogate mother incurs are not reimbursable.

Storage costs associated with the freezing of blood cords, embryos, placentas and sperm sperm banks are generally reimbursable when a specific medical condition exists. Additionally, these costs are reimbursable only for a limited period until they can be used to treat the existing condition generally up to one year. Pre-seed moisturizer is not reimbursable.

Insect repellent - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications. Under an HRA and HSA, the following premiums are reimbursable: long-term care insurance, Medicare Part A or B, Medicare HMO and employer-sponsored retiree health insurance premiums, and premiums for a health plan during a period in which an individual is receiving retirement compensation.

Interest - Interest incurred because payment to a health care provider is delinquent is not covered. Kits - Expenses paid for kits such as first aid, home test, pregnancy kit, snake bite and bee sting are reimbursable. Lasik eye surgery - Radial keratotomy RK , or other corrective eye surgery such as lasik surgery is a deductible expense under IRS Section d and is reimbursable. Late Charges - Charges incurred because payment to a health care provider is delinquent are not covered.

Laxatives - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications.

Lead-based paint removal - The cost of removing lead-based paints from surfaces in a home to prevent a child who has or has had lead poisoning from eating the paint are reimbursable. These surfaces must be in poor repair peeling or cracking or within the child's reach. The cost of repainting the scraped area, however, is not reimbursable. Learning disability - Tuition payments to a special school for a child who has severe learning disabilities caused by mental or physical impairments, including nervous system disorders, are reimbursable.

Also, tutoring fees for a child's tutoring by a teacher who is specially trained and qualified to work with children who have severe learning disabilities are reimbursable. See Schools, special. Legal fees - Legal fees paid to authorize treatment for mental illness are reimbursable. However, any part of a legal fee that is a management fee, for example, a guardianship or estate management fee, is not reimbursable. Services provided by a range of organizations and individuals may be reimbursable, including care provided by hospitals, medical doctors, dentists, eye doctors, chiropractors, nurses, osteopaths, podiatrists, psychiatrists, psychologists, physical therapists, acupuncturists, psychoanalysts and others.

Lice Treatment - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications. Lodging and meals - The cost of lodging and meals at a hospital or similar institution are reimbursable if the employee's main reason for being there is to receive medical care.

The cost of lodging not provided in a hospital or similar institution while an employee is away from home is reimbursable if four requirements are met: 1 the lodging is primarily for and essential to medical care; 2 medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital; 3 the lodging is not lavish or extravagant under the circumstances; and 4 there is no significant element of personal pleasure, recreation or vacation in the travel away from home.

See Nursing home. Lodging is included for a person for whom transportation expenses are a medical expense because that person is traveling with the person receiving the medical care. Meals and lodging away from home for medical treatment that is not received at a medical facility, or for the relief of a specific condition, are not reimbursable even if the trip is made on the advice of a doctor.

Long-term care insurance premiums - Long-term care insurance premiums are not reimbursable under a Health FSA.

Maintenance costs - Portion of expense incurred to maintain equipment used to treat a medical condition are reimbursable. For example, the cost of electricity to operate an air purifier when suffering from asthma. Marriage counseling - Expenses for marriage counseling services do not qualify as medical expenses. However, sexual inadequacy or incompatibility treatment is reimbursable.

Massage - Fees paid for massages are not reimbursable unless to treat a physical disability or illness. Massage chair - Expenses paid for a massage chair to treat a medical condition are reimbursable.

Meals - See Lodging and meals, or Special foods. Medical aids - Medical aids such as false teeth, hearing aids, orthopedic shoes, crutches and elastic hosiery are reimbursable. Medical alert programs - Expenses incurred to enroll in a medical alert program are reimbursable when accompanied by a medical diagnosis.

Medical information plan - Amounts paid to a plan that keeps medical information so that it can be retrieved from a computer data bank for medical care are reimbursable.

Medical services - Only legal medical services are reimbursable. Amounts paid for illegal operations or treatments, regardless of whether they are rendered by licensed or unlicensed practitioners, are not reimbursable.

Medicated soaps, powders, and shampoos - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications. Medicines, prescribed - Amounts paid for prescribed medicines and drugs are reimbursable. A prescribed drug is one which requires a prescription by a doctor for its use by an individual. The cost of insulin is also reimbursable. The cost of a prescribed drug ordered and shipped from another country cannot be reimbursed. The importation of prescribed drugs by individuals is illegal under federal law even if allowed by state law.

However, you can be reimbursed for the cost of a prescribed drug that you purchased and consumed in another country if the drug is legal in both the other country and the United States. See Over-the-counter medicines and drugs. This may include, but not limited to, tampons, pads, liners, cups, sponges, and other similar prodcuts.

See Over-the-counter medications. Mentally handicapped, special home for - The cost of keeping a person with mental disabilities in a special home not the home of a relative on the recommendation of a psychiatrist to help the person adjust from life in a mental hospital to community living is reimbursable. Motion sickness - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications. Nausea relief - Expenses paid for nausea relief devices such as nausea bands are reimbursable.

For over-the-counter nausea relief medications, see Over-the-counter medications. Nightguard - Also referred to as occlusal guard. This is a dental appliance often used to treat TMJ or the clenching or grinding of teeth and is covered. Nursing home - The cost of medical care in a nursing home or home for the aged for an employee, or for an employee's spouse or dependent, is reimbursable.

This includes the cost of meals and lodging in the home if the main reason for being there is to get medical care. Nursing services - Wages and other amounts paid for nursing services are reimbursable. Services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. Only the amount spent for nursing services is reimbursable.

If the attendant also provides personal and household services, these amounts must be divided between the time spent performing household and personal services and the time spent on nursing services. Meals - Amounts paid for an attendant's meals are also reimbursable. This cost may be calculated by dividing a household's total food expenses by the number of household members to find the cost of the attendant's food, then apportioning that cost in the same manner used for apportioning an attendant's wages between nursing services and all other services.

See above. Upkeep - Additional amounts paid for household upkeep because of an attendant are also reimbursable. This includes extra rent or utilities paid because of having to move to a larger apartment to provide space for an attendant.

Infant care - Nursing or baby sitting services for a normal, healthy infant are not reimbursable. Social Security, unemployment FUTA and Medicare taxes paid for a nurse, attendant or other person who provides medical care are reimbursable. Orthodontia - Services are reimbursable.

This type of service does not fit the normal 'fee for service' arrangements seen with other care, and reimbursement can be made once charges have been billed. This can be a one time fee less any amount paid, or to be paid by your insurance plan, or as you are billed each month. Over-the-counter medicines and drugs - Effective January 1, , expenses are generally reimbursable unless used for general well-being or for purely cosmetic purposes. Over-the-counter medicine and drug expenses that are incurred after January 1, , are generally reimbursable.

See Kits and Vapor units and refills. Over-the-counter OTC items are eligible. OTC items include, but are not limited to band aids, bandages and wraps, braces and supports, catheters, contact lens solutions and supplies, contraceptives and family planning items, denture adhesives, diagnostic tests and monitors, diabetic supplies and testing, first aid supplies, peroxide, and rubbing alcohol.

Over-the-counter items which are items not categorized as a medicine or drug and may include, but are not limited to, nail clippers, pumice stones, etc. Pain relief - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications. Parental assistance - Expenses incurred with an agency to assist parents with newborn care which may include nurturing are not covered unless submitted with a medical diagnosis.

People with an intellectual disability, special home for - The cost of keeping a person with an intellectual disability in a special home not the home of a relative on the recommendation of a physician to help the person adjust from life in a mental hospital to community living is reimbursable.

This may include, but not limited to, face masks, gloves, disinfecting wipes, and hand sanitizer. Personal use items - Items that are ordinarily used for personal, living, and family purposes are not reimbursable unless they are used primarily to prevent or alleviate a physical or intellectual disability or illness. For example, the cost of a wig purchased for the mental health of a patient who has lost all of his or her hair from disease is reimbursable.

Physical exams - Physical exams are generally reimbursable, except for employment-related physicals. See Employment-related Expenses. Plane tickets - Expenses paid for the purchase of a plane ticket for a related hospitalization are reimbursable.

Postage - Postage stamps and fees are not covered unless the postage is used to submit a claim for reimbursement. Pre-Adoption Counseling - This counseling is covered as are all services related to adoption. See Adoption. Pre-existing conditions - Medical expenses not covered because of the plan's pre-existing condition limitation are reimbursable. Premiums - Premiums, of any kind, that you pay for yourself or your eligible dependents are not reimbursable under a Health FSA.

Medical Diagnosis is required. Psychiatric care - Expenses for psychiatric care are reimbursable. These expenses include the cost of supporting a mentally ill dependent at a specially-equipped medical center where the dependent receives medical care.

See Psychoanalysis and Transportation. Radial keratotomy - Radial keratotomy RK , or other corrective eye surgery such as lasik surgery, is a deductible expense under IRS Section d and is reimbursable. Reasonable and customary charges, amounts in excess of - Medical expenses in excess of the plan's reasonable and customary charges are reimbursable.

Rebundled charges - Charges for services that are rebundled by the medical insurance plan for which the provider does not participate are reimbursable. Remineralization Products - These products add back the minerals that acid has chewed away and are considered part of normal hygiene. Service is only covered when submitted with a medical diagnosis. Respiratory treatments - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications.

Savings Club - Dues to join a club that offers discounts on health items is not covered i. Schools, special - Expenses paid to a special school for a mentally impaired or physically disabled person are reimbursable if the main reason for using the school is its resources for treating the disability. This includes the cost of a school that:. The cost of meals, lodging and ordinary education supplied by a special school is reimbursable only if the main reason for using the school is its resources for treating the mental or physical disability.

The cost of sending a non-disabled "problem child" to a special school for benefits the child may get from the course of study and disciplinary methods is not reimbursable. Scientology "audits" - Amounts paid to the Church of Scientology for "audits" do not qualify as expenses for medical care. Shampoo, medicated - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications.

Shipping charges - Shipping charges incurred when paying for an eligible expense are reimbursable. Shower chair - Expenses incurred for the purchase of a shower chair are reimbursable when accompanied by a medical diagnosis. Sleep aids and sedatives - Effective January 1, , a doctor's prescription for reimbursement is no longer needed ; see Over-the-counter medications. Smoking cessation drugs and programs - The cost of drugs to stop smoking for the improvement of general health are reimbursable.

HDHPs can be expensive if you have, or expect to incur, major medical bills. But if you are in good health and have an HDHP, then supplementing it with an HSA can be great way to save for future medical expenses and supplement your retirement savings. Discounted offers are only available to new members. Stock Advisor will renew at the then current list price.

Investing Best Accounts. Stock Market Basics. Stock Market. Industries to Invest In. Getting Started. Planning for Retirement. Retired: What Now? Personal Finance. For more information on screening services, see Notice , I.

For additional guidance on preventive care, see Notice , C. Preventive care can also include coverage for treatment of individuals with certain chronic conditions listed in the Appendix of Notice , I. For information on preventive care for chronic conditions, see Notice , I. The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for Family HDHP coverage is HDHP coverage for an eligible individual and at least one other individual whether or not that individual is an eligible individual.

This is family HDHP coverage. There are some family plans that have deductibles for both the family as a whole and for individual family members. You have family health insurance coverage in You can have additional insurance that provides benefits only for the following items. You can also have coverage whether provided through insurance or otherwise for the following items.

Telehealth and other remote care for plan years beginning before These arrangements can pay or reimburse the items listed earlier under Other health coverage except long-term care. Also, these arrangements can pay or reimburse preventive care expenses because they can be paid without having to satisfy the deductible.

Suspended HRA. When the suspension period ends, you are no longer eligible to make contributions to an HSA. Retirement HRA. This arrangement pays or reimburses only those medical expenses incurred after retirement.

After retirement, you are no longer eligible to make contributions to an HSA. Coverage during a grace period by a general purpose health FSA is allowed if the balance in the health FSA at the end of its prior year plan is zero.

Any eligible individual can contribute to an HSA. For an HSA established by a self-employed or unemployed individual, the individual can contribute. Family members or any other person may also make contributions on behalf of an eligible individual. Contributions to an HSA must be made in cash. The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual.

The maximum annual HSA contribution based on your HDHP coverage self-only or family on the first day of the last month of your tax year. Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year December 1 for most taxpayers , you are considered an eligible individual for the entire year.

If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month for example, December 1, , through December 31, You include this amount in your income in the year in which you fail to be an eligible individual.

Chris, age 53, becomes an eligible individual on December 1, He has family HDHP coverage on that date. Chris fails to be an eligible individual in June Chris uses the worksheet in the Form instructions to determine this amount. Erika fails to be an eligible individual in March Erika uses the worksheet in the Form instructions to determine this amount. However, see Enrolled in Medicare , later. You must reduce the amount that can be contributed including any additional contribution to your HSA by the amount of any contribution made to your Archer MSA including employer contributions for the year.

A special rule applies to married people, discussed next, if each spouse has family coverage under an HDHP. After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division.

The rules for married people apply only if both spouses are eligible individuals. Each spouse must make the additional contribution to his or her own HSA.

For , spouses Ginger and Lucy are both eligible individuals. They each have family coverage under separate HDHPs. Ginger is 58 years old and Lucy is You must reduce the amount you, or any other person, can contribute to your HSA by the amount of any contributions made by your employer that are excludable from your income. This includes amounts contributed to your account by your employer through a cafeteria plan.

Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. This rule applies to periods of retroactive Medicare coverage. So, if you delayed applying for Medicare and later your enrollment is backdated, any contributions to your HSA made during the period of retroactive coverage are considered excess. See Excess contributions , later. You turned age 65 in July and enrolled in Medicare. The maximum qualified HSA funding distribution depends on the HDHP coverage self-only or family you have on the first day of the month in which the contribution is made and your age as of the end of the tax year.

The qualified HSA funding distribution is shown on Form for the year in which the distribution is made. You can make only one qualified HSA funding distribution during your lifetime. However, if you make a distribution during a month when you have self-only HDHP coverage, you can make another qualified HSA funding distribution in a later month in that tax year if you change to family HDHP coverage.

In , you are an eligible individual, age 57, with self-only HDHP coverage. You must remain an eligible individual during the testing period. For a qualified HSA funding distribution, the testing period begins with the month in which the qualified HSA funding distribution is contributed and ends on the last day of the 12th month following that month.

For example, if a qualified HSA funding distribution is contributed to your HSA on August 10, , your testing period begins in August , and ends on August 31, If you fail to remain an eligible individual during the testing period, for reasons other than death or becoming disabled, you will have to include in income the qualified HSA funding distribution.

You include this amount in income in the year in which you fail to be an eligible individual. Each qualified HSA funding distribution allowed has its own testing period. For example, you are an eligible individual, age 45, with self-only HDHP coverage. On June 18, , you make a qualified HSA funding distribution. Your testing period for the first distribution begins in June and ends on June 30, Your testing period for the second distribution begins in August and ends on August 31, You must roll over the amount within 60 days after the date of receipt.

You can make only one rollover contribution to an HSA during a 1-year period. There is no limit on the number of these transfers. You can make contributions to your HSA for until April 15, If you fail to be an eligible individual during , you can still make contributions until April 15, , for the months you were an eligible individual.

Your employer can make contributions to your HSA from January 1, , through April 15, , that are allocated to Your employer must notify you and the trustee of your HSA that the contribution is for Generally, you can claim contributions you made and contributions made by any other person, other than your employer, on your behalf, as an adjustment to income.

You should include all contributions made for , including those made from January 1, , through April 15, , that are designated for Contributions made by your employer and qualified HSA funding distributions are also shown on the form. Follow the Instructions for Form You will have excess contributions if the contributions to your HSA for the year are greater than the limits discussed earlier. Excess contributions made by your employer are included in your gross income.

The excise tax applies to each tax year the excess contribution remains in the account. You may withdraw some or all of the excess contributions and avoid paying the excise tax on the amount withdrawn if you meet the following conditions. You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made. You withdraw any income earned on the withdrawn contributions and include the earnings in "Other income" on your tax return for the year you withdraw the contributions and earnings.

If you withdraw any of those amounts, the amount is treated the same as any other distribution from an HSA, discussed later. You may be able to deduct excess contributions for previous years that are still in your HSA.

The excess contribution you can deduct for the current year is the lesser of the following two amounts. The total excess contributions in your HSA at the beginning of the year. Amounts contributed for the year include contributions by you, your employer, and any other person. Any excess contribution remaining at the end of a tax year is subject to the excise tax.

See Form You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses.

Generally, a distribution is money you get from your HSA. Your total distributions include amounts paid with a debit card and amounts withdrawn from the HSA by other individuals that you have designated.

Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. These are explained in Pub. Amounts paid after for over-the-counter medicine whether or not prescribed and menstrual care products are considered medical care and are considered a covered expense. State law determines when an HSA is established. If, under the last-month rule, you are considered to be an eligible individual for the entire year for determining the contribution amount, only those expenses incurred after you actually establish your HSA are qualified medical expenses.

Qualified medical expenses are those incurred by the following persons. Any person you could have claimed as a dependent on your return except that:. Health care coverage while receiving unemployment compensation under federal or state law. Medicare and other health care coverage if you were 65 or older other than premiums for a Medicare supplemental policy, such as Medigap. The premiums for long-term care insurance item 1 that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually.

Items 2 and 3 can be for your spouse or a dependent meeting the requirement for that type of coverage. See Pub. The following situations result in deemed taxable distributions from your HSA.

You engaged in any transaction prohibited by section with respect to any of your HSAs at any time in Your account ceases to be an HSA as of January 1, , and you must include the fair market value of all assets in the account as of January 1, , on Form You used any portion of any of your HSAs as security for a loan at any time in You must include the fair market value of the assets used as security for the loan as income on Form , SR, or NR.

Examples of prohibited transactions include the direct or indirect:. Furnishing goods, services, or facilities between you and the HSA; and. Transfer to or use by you, or for your benefit, of any assets of the HSA. You must keep records sufficient to show that:. How you report your distributions depends on whether or not you use the distribution for qualified medical expenses defined earlier.

However, the distribution of an excess contribution taken out after the due date, including extensions, of your return is subject to tax even if used for qualified medical expenses. There is no additional tax on distributions made after the date you are disabled, reach age 65, or die.

An HSA is generally exempt from tax. You are permitted to take a distribution from your HSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. Amounts that remain at the end of the year are generally carried over to the next year see Excess contributions , earlier.

You should choose a beneficiary when you set up your HSA. What happens to that HSA when you die depends on whom you designate as the beneficiary. The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die. The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death.

Enter "statement" at the top of each Form and complete the form as instructed. Next, complete a controlling Form combining the amounts shown on each of the statement Forms Attach the statements to your tax return after the controlling Form This section contains the rules that employers must follow if they decide to make HSAs available to their employees.

Unlike the previous discussions, "you" refers to the employer and not to the employee. You can provide no additional coverage other than those exceptions listed earlier under Other health coverage. You deduct the contributions on your business income tax return for the year in which you make the contributions.

If the contribution is allocated to the prior year, you still deduct it in the year in which you made the contribution. HSA Bank shall not be responsible or liable for any loss incurred due to you using this third party site.

Weight-loss program only if it is a treatment for a specific disease diagnosed by a physician e. Au pair services Babysitting services Before- and after-school programs Custodial or eldercare expenses, in-home or daycare center not medical care Nursery school Pre-kindergarten Summer day camp not educational in nature.

Important Notification By accessing you will be leaving the HSA Bank web site and entering a web site hosted by another party.