HSA Information

Graphic Large ShipYour HSA and Qualified Medical Expenses
HSA money can pay for any “qualified medical expenses” permitted under federal tax law. This includes most medical, dental, vision and chiropractic care and over-the-counter drugs such as aspirin.

HSA money can pay medical expenses for yourself, your spouse, or your dependent children even if your spouse and dependents are not covered by your HDHP!

Your HSA and Non-Qualified Medical Expenses
Payments for services other than “qualified medical expenses” are taxable as income and subject to an additional 10% tax penalty, except after age 65 when the penalty no longer applies. Examples of taxable income include:
•  Medical expenses not considered “qualified medical expenses” (i.e. cosmetic surgery).
•  Other types of health insurance unless specifically described above.
•  Medicare supplement insurance premiums.
•  Expenses that are not medical or health-related.

High Deductible Health Plans for Your HSA
To open and contribute to an HSA you must have coverage under an HSA qualified “High Deductible Health Plan” (HDHP). Federal law requires a health insurance deductible for 2007 of at least $1,100 (self-only coverage) and $2,200 (family). Maximum HSA contributions for 2007 are $2,850 (self-only) and $5,650 (family).

In addition, annual out-of-pocket expenses under the plan for 2007 (including deductibles, co-pays, and co-insurance) cannot exceed $5,500 (self-only coverage) and $11,000 (family).

The deductible must apply to all medical expenses (including prescriptions) covered by the plan. However, plans can pay “preventive care” services on a first-dollar basis (with or without a co-pay). "Preventive care" can include routine pre-natal and well-child care, child and adult immunizations, annual physicals, mammograms, pap smears, etc.

All contributions (including catch-up contributions) must be pro-rated. Your annual contribution depends on the number of months of HDHP coverage you have during the year (count only the months where you have HDHP coverage on the first day of the month). Contributions can be made up to April 15 of the following year. Individuals age 55 and older can also make additional “catch-up” contributions.

The President’s FY 2007 Budget proposes expanding HSAs to make coverage more affordable and accessible. The Treasury Department estimates that these changes would increase the projected number of Americans with HSAs from the current 14 million to 21 million by 2010.

HSA and Premiums
You cannot use an HSA to pay medical insurance premiums, except under specific circumstances, including:
•  Health plan coverage while receiving federal or state unemployment benefits.
•  COBRA continuation after leaving a company that offers health insurance.
•  Qualified long-term care insurance.
•  Medicare premiums and out-of-pocket expenses, including deductibles, co-pays, and coinsurance for: Part A (hospital), Part B (physician and outpatient), Part C (HMO's and PPO's) and Part D (prescription drugs).

Forms to Download (as PDF)
HSA Benefits

HSA Basics
HSA Notice
HSA Road Rules

  • Tax free contributions
  • Tax free distributions
  • Tax free interest earned
HSA Contributions for 2007 Contact Information

The out-of-pocket maximums are:
2007 Minimum HSA deductibles of $1,100 self-only and $2,200 family.
2007 Maximum HSA contributions of $2,850 self-only and $5,650 family.
2007 Maximum HSA out of pocket expenses of $5,500 self-only and $11,000 family.

Kereon HSA, Inc.
13700 Watertower Circle, Suite D
Plymouth, MN 55441
Phone (763) 383-4860
Fax (763) 383-4880
Back to Top | About Us | Privacy Policy | Contact Us
Copyright © 2005-07 Kereon HSA, Inc. All rights reserved.