For those enrolled in either the $1,850 or $2,850 Deductible Plans, let’s take a minute to recap the features of a Health Savings Account and how to maximize its benefits.
There are several good reasons your HSA works to your advantage. This account that you use to pay for qualified health care expenses is owned by you, controlled by you, is tax-free, and Pearson helps by contributing to it.
The Internal Revenue Service sets annual limits on the total amount of money that can be contributed to your HSA. In 2019, the limits on combined contributions by both you and Pearson are:
- $3,500 for employee-only coverage (Pearson’s $500 contribution has been made to your HSA).
- $7,000 for family coverage (Pearson’s $1,000 contribution has been made to your HSA).
- If you will be age 55 or over by the end of this year, you can contribute an extra $1,000 beyond the limits above for calendar year 2019.
Frequently Asked Questions about the Health Savings Account
Q. I don’t have enough saved in my HSA right now for a large expense. Can I pay another way and reimburse myself later when my balance is greater?
A. If you have a large expense before you have enough saved in your HSA, you can pay another way and reimburse yourself from your HSA later. Just be sure to save your receipts.
Q. Can I be claimed as a dependent on someone else’s tax return or be enrolled in any other medical coverage if I contribute to a Health Savings Account?
A. According to Internal Revenue Service (IRS) regulations, you are not allowed to be claimed as a dependent on another person’s tax return if you are participating in a Health Savings Account. In addition, the IRS does not allow you to be enrolled in any other medical coverage, including a spouse’s plan or Medicare if you have an HSA.
Q. Can I withdraw money from my HSA for other than qualified health care expenses?
A. If money is used for ineligible expenses, you will pay ordinary income tax on the amount withdrawn, plus a 20% penalty if you make that withdrawal before age 65.
Just like any financial account you have, you need to be able to manage account activity. It’s easy to do with your HSA, here’s how:
- Track your stats. Log in to your medical plan’s website to see how much of your deductible you’ve met, review claims, use helpful tools, and more. Likewise, keep tabs on your HSA by logging in to the Pearson Benefits Marketplace (click on “Your Savings and Spending Accounts” on the left navigation bar) to view your balance, submit claims, and more.
Change your HSA contributions anytime. Adjust your contributions as necessary during the year to keep your savings on track with your anticipated expenses.
Note: You can only spend HSA contributions that have actually been deposited into your account.
- There is no use it or lose it rule. You will never lose any money left in your HSA, as it rolls over year after year, so use your HSA to stash away tax-free money you can spend on eligible health care expenses anytime or in retirement.
Did you know?
The average out-of-pocket health care costs for a retired couple is more than 12% of retiree expenses? Even if you are not ready to retire, saving money in a Health Savings Account (HSA) can help to cover retiree health care expenses later on.