Health Savings Accounts (HSAs) give you another option for managing the high costs of healthcare. With HSAs, you have more control over your money. You can invest money for current and future medical expenses and grow it tax-free (consult your tax advisor for details). Unlike flexible spending accounts, which are controlled by employers and have a use-it-or-lose-it limitation, HSAs are portable and belong to the consumer for life. HSAs prove especially beneficial for small businesses. Traditional healthcare insurance is often too expensive for small businesses to offer to their employees. With a high-deductible plan and corresponding HSA, business owners can offer employees the healthcare security they need.

To qualify for an HSA, you must meet the following requirements:

• You must be covered by a qualified high deductible health plan (HDHP).
• You must have no other health coverage, including a spouse's plan that provides benefits covered by your HDHP. You can have accident, disability, dental, vision or long-term care coverage or insurance that provides benefits for a specific disease or illness, a fixed amount for hospital stays or liability coverage, such as workers' compensation.
• You are not enrolled in Medicare.
• You do not receive health benefits under TRICARE.
• You have not received Veterans Administration (VA) benefits within the past three months.
• You cannot be claimed as a dependent on some else's tax return (consult your tax advisor for details).
• You are not covered by a general purpose health care flexible spending account (FSA) or health reimbursement account (HRA). Limited-purpose FSAs and HRAs are permitted.

• Contributions are tax-deductible
• Earnings are tax-deferred
• Withdrawals on qualified medical expenses are tax-free
• Funds carry over from year to year
• The account is yours to keep even if you change jobs, health plans, or retire

A High Deductible Health Plan, also known as an HDHP is a healthcare option that often offers a lower monthly premium in exchange for a higher deductible. This type of plan is often paired with a health savings account option by employers.

Yes, you can have some additional coverage, called “permitted insurance,” including:

• Specific disease or illness insurance
• Accident, disability, dental care, vision care and long-term care insurance
• Discount card such as a pharmacy card
• Insurance that provides a fixed payment per day (or other period) for hospitalization

No. HSAs are individual accounts and only the account holder has online access. Account holders may contact Customer Services at (833) 232-4676 to request additional access.

No. HSAs are individually owned. However, you may authorize your spouse to be a signer on your HSA to make contributions and withdrawals.

Anyone. You, your employer, friends, family members, or anyone who would like to contribute on your behalf.

There are several ways you can contribute to your HSA:

• Log in to HSA Central Consumer Portal or Mobile App to transfer funds from your checking or savings account
• Ask your employer about HSA payroll deductions
• Transfer funds from another HSA - complete a Direct Transfer Request Form to request those funds be moved to your HSA Central account
• Check deposit at Central Bank, Jefferson Bank, and Bank Central locations.

The IRS sets contribution limits each year on how much you can contribution to a single HSA plan or a Family HSA plan. There are no income limits, but you do need to be enrolled in a qualified High Deductible Health Plan (HDHP) to be eligible for an HSA. Contributions can be made for a given tax year until the tax filing deadline. For most years this allows contributions to be made for the previous year until April 15th.

Any amount contributed over the allowable limit will have to count toward your taxable income. The IRS may have you pay a six percent excise tax on any excess contributions.  If you’ve over-contributed, you can have excess contributions returned to you by completing and submitting the HSA Distribution Form. Be sure to check the Excess Contribution Removal box and include that date(s) when contributions were made resulting in contributions made above the contribution limit based on your coverage level.

Generally the tax deadline is April 15 of the following year.

There are two tax documents that are important if you have an HSA: 1099-SA and 5489-SA

1099-SA

This tax document is used to report any distributions, or withdrawal of funds from your HSA during the given tax year. All of your distributions from your HSA must be reported on IRS Form 8889 when filing your taxes.

5498-SA

The 5498-SA form reports all contributions to your HSA for the given tax year, including those contributed for the tax year between January 1 and the tax filing date. It is important to know this form is only informational and does not need to be filed with your income tax return. But it’s a great way to make sure you’re taking full advantage of the allowed annual Contributions limits.

How can I access these tax documents? 

You can access your tax documents when logged into the HSA Central Consumer Portal or HSA Central Mobile App.

• HSA Central Consumer portal - Visit HSACentral.net and log into the Consumer portal under Access my HSA. Once logged in, type Tax Documents in the HSA Quick Help at the bottom right. A link to your available tax documents will then display.
• HSA Central Mobile App - Log into your HSA Central Mobile app and select Profile. Select Documents and HSA Tax Statements are listed under the Statements section.

What do I need to do with these tax documents? 

These tax documents may be downloaded or printed to complete your tax filing. Your 1099-SA tax form must be filed with your tax filing, and the distributions found on your 1099-SA document must also be recorded on the IRS From 8889 when filing. The 5498-SA tax form is for your own informational purposes and does not have to be included in your yearly tax filing. Make sure to consult with your tax professional if you have any questions about these documents.

Why doesn’t my W-2 match the Form 5498.SA? 

If the contributions on your W-2 don’t match your 5498-SA, you most likely made after-tax contributions.

You can claim a tax deduction for your HSA contributions, up to the predetermined  contribution limit, even if you do not itemize your deductions on the IRS Form 1040. Any employee payroll deferral or employer pre-tax HSA contributions that are reported on the IRS Form W-2 as non-taxable will be excluded from your gross income.

Yes. As long as the qualified health care expense occurred after you opened the HSA, you can pay or reimburse yourself with HSA funds. Keep copies of your receipts to verify your funds were used for qualified health care expenses and not paid for by another source or taken as an itemized deduction for a prior tax year. Consult your tax advisor for details.

Yes. Annual contributions should be made by your tax filing deadline. Generally, April 15 of the following year. Consult your tax advisor for details.

Those funds are considered part of your gross income and subject to income tax plus a 20 percent IRS penalty. Funds used after an account holder's death or disability or after age 65 are not subject to the 20 percent penalty. Consult your tax advisor for details.

Unused balances roll over from year to year. You won't lose your money if you don't spend it within the year.

Health Savings Account funds have no limit on when or how to take distributions. However, to fully benefit from the tax advantages, funds must be used on eligible medical expenses determined by the IRS.

Health savings accounts offer a triple-tax advantage* in that deposits are tax-deductible, growth is tax-deductible, and spending I tax-free. All contributions to your HSA are tax-deductible, or if made through payroll deductions, are pre-tax which lowers your overall taxable income.
For more information visit our HSA Tax Advantages section.

By offering a high-deductible health plan your employees are eligible to participate in a health savings account. This allows you as the employer to make tax-free contributions to your employees. Employers can also save on payroll taxes for HSA contributions.

To enroll in a health savings account with HSA Central, you can get started with our how-to-video, check out our account opening guide, or feel free to contact us for more information.

You can deposit a check to a bank account and transfer the funds to your HSA Central HSA by selecting Make HSA Transaction in the HSA Central Mobile App or by logging into HSACentral.net.

You can mail a paper check contribution with an HSA Contribution Form. This form can be printed from HSA Central under the Tools and Support tab or by calling HSA Central Consumer Services to request the form.

You can log in to see your Health Savings Account information by visiting HSACentral.net and selecting the Log in button. Under New User?, select create your new username and password. Then follow the prompts and establish your security questions.

If your card is lost or stolen, you have two options to report it. You can log into HSACentral.net or the HSA Central Mobile App to report your card lost/stolen under the Accounts Tab or by calling (833) 232-4676.

• Doctor's office visits
• Prescriptions, including over-the-counter drugs
• Chiropractic care

Yes. You can invest excess funds to save for future healthcare expenses. Your investment returns and earning are all tax-free. Log into HSA Central and choose Manage Investments. Then, view fund options and performance, set investment allocations and realign your portfolio. Use our Guidance Tool to determine your risk tolerance and savings goals and create a personalized investment plan.

You can access your HSA Central account number after logging into you HSA Central Consumer portal. Visit HSACentral.net and log into the Consumer portal under Access my HSA. Your account number is displayed when selecting Account Summary under the Accounts tab. Your HSA Central Routing number is 086519531.

Your new HSA Debit Mastercard can be used on qualified medical expenses and at qualified healthcare merchants. Most major pharmacies, discount stores, department stores, and supermarkets will accept your card. Visit www.sig-is.org to learn more about qualifying stores. If your store does not qualify, your card may decline due to IRS regulations.

To open and contribute to an HSA, an employee must meet the following IRS requirements:

• The employee is enrolled in a High-Deductible Health Plan (HDHP) as defined by IRS guidelines.
• The employee is not enrolled in Medicare, Tricare, or VA benefits.
• The employee is not claimed as a dependent on someone else’s tax return.
• The employee does not participate in a general-purpose FSA or HRA (with the exception of a Limited Purpose FSA/HRA).

Employers benefit from lower payroll taxes

• Employer HSA contributions that are not included in employees’ income are not subject to federal income tax, or Social Security or Medicare taxes (commonly known as FICA tax). The FICA tax savings for employers alone can be so substantial that many employers choose to increase their employer HSA contributions to maximize their FICA tax savings. This approach can be a smart strategy for increasing your employees’ total compensation while staying focused on your bottom line.

Employer HSA Contributions are tax-deductible as a business expense.

Tax Free Contributions

• Employer contributions to HSAs are excluded from employees' gross income and are not subject to federal income tax, Social Security, or Medicare taxes.

Boost savings and spending power

• Additional contributions from an employer increase employees' ability to cover qualified medical expenses and grow their HSA balance over time. Employees can also make contributions outside of payroll deductions. HSA balances rollover annually and with HSA Central, they can be invested to achieve long-term growth.

Helps Maximize IRS Limits

• Employer funds count toward the individual's annual HSA Limit. Employers are not responsible for tracking external contributions, but HSA Central can help prevent over-contribution if the employee coverage level is reported correctly. Employer contributions increase the employee's total contributions while staying within established IRS parameters.

W-2 Reporting of Contributions

• Employers must report both employer and employee HSA contributions on their W-2 form. Employer contributions to employee HSA accounts are excluded from taxable income but still require reporting.

Contribution Monitoring & Comparability

• To ensure compliance with the IRS, employers are responsible for tracking contributions. Employers should confirm that their scheduled HSA contributions are funded accurately and on time. Employers should also reconcile the accounts, meaning that payroll deductions and employer deposits should match the amounts posted to employees’ HSA accounts. If the employer does not have a cafeteria plan, they must also comply with nondiscrimination ("comparability") rules, so benefits are not weighted unfairly toward high earners.

Supporting Form 8889 Filings

• While employees complete Form 8889 for their tax returns, employer recorded HSA contributions flow through payroll systems and W-2 reporting to support accuracy and compliance.

Employee Identity Verification and Monitoring

• Employers must verify employee identity when prompted to comply with federal regulations such as the USA PATRIOT Act. Ongoing identification monitoring helps to prevent fraud and ensures that contributions are credited to the correct account.

ERISA (Employee Retirement Income Security Act of 1974) Coverage for HSAs with Investment Advice

• Generally, HSAs are not subject to ERISA, but if the employer provides investment advice regarding an employee's HSA funds, the employer may become a fiduciary under ERISA due to the 2024 Dept. Of Labor fiduciary rule.

How to Avoid Crossing into Fiduciary Territory

• Employers remain non-fiduciaries when providing neutral investment education such as explaining fee structures or investment options. If an employer recommends specific investment decisions or handles and employee's funds directly, they are subject to fiduciary obligations.

HSA Sponsorship Duties under ERISA

Employer-sponsored HSAs, when part of a group health plan, involve certain ERISA considerations:

• Acting prudently and loyally when selecting HSA custodians and vendors
• Monitoring fees, service quality, and any conflicts of interest
• Documenting decisions and disclosures
• Ensuring compliance with regulatory changes

HSA Central can accept files from your Benefits Administrator!

• HSA Central offers a simple solution for creating HSA accounts for your employees. We can work with your designated Benefits Administrator to import your employees into our system via file feed, making it simple to determine each employee’s employment status and coverage level.