HSA Brochures & Forms: 
HSA Brochure
HSA Application
IRS Form 5305-B
ESA Brochures & Forms:
ESA Brochure
ESA Application
IRS Form 5305-E
ESA Distribution Form
"Upon the subject of education... I view it as the most important subject which we as a people may be engaged in."
— Abraham Lincoln
Health Savings Accounts
Summary
Health Savings Accounts were created to help individuals save for qualified medical and retirement expenses on a tax-free basis.
Eligibility
Individuals under the age of 65 are eligible to contribute to an HSA if they have a qualified high-deductible health plan (QHDHP).
- For self-only policies, a qualified health plan must have a minimum deductible of $1,200 with a $6,050 cap on out-of-pocket expenses (indexed annually).
- For family policies, a qualified health plan must have a minimum deductible of $2,400 with a $12,100 cap on out-of-pocket expenses (indexed annually).
Preventive care services in the health plan are not subject to the deductible.
Contributions
The maximum annual contribution for individuals is $3,100 and $6,250 for family policies (indexed annually).
- Individuals age 55-64 may make additional "catch-up" contributions of up to $1,000 for 2012. A married couple can make two catch-up contributions as long as both spouses are at least 55 and have separate HSA accounts. Catch-up contributions will help individuals accumulate assets for retirement health expenses.
- Contributions may be made by individuals, family members and employers.
Contributions are tax-deductible. Employer contributions are made on a pre-tax basis and are not taxable to the employee. Employers will be allowed to offer HSAs through a cafeteria plan.
Investment earnings accumulate tax-free.
Note: Persons covered by Medicare are not eligible to contribute to an HSA.
Distributions
HSA distributions are tax-free if they are used to pay for qualified medical expenses, such as:
- Amounts paid for the diagnosis, cure, mitigation, treatment or prevention of disease
- Prescription drugs
- Qualified long-term care services and long-term care insurance
- Continuation coverage required by Federal law (i.e., COBRA)
- Health insurance premiums for the unemployed
- Medicare expenses (but not Medigap)
Retiree health expenses for individuals age 65 and older (Note: retiree health plans would not have to meet the $1,200/$2,400 minimum deductible requirements.)
Distributions made for any other purpose are subject to income tax and a 20% penalty. The 20% penalty is waived in the case of death or disability. The 20% penalty is also waived for distributions made to individuals age 65 and older.
Treatment Upon Death
Upon death, HSA ownership may transfer to the spouse on a tax-free basis.
