Employer Services
Health Savings Account FAQ's

1. What is a Health Savings Account (HSA)?
2. What deductible amount does a High Deductible Health Plan require?
3. Who owns the Health Savings Account?
4. Do employers typically contribute to Health Savings Accounts on behalf
   of employees?
5. How much do employees typically contribute into the Health Savings Account?
6. How much can be contributed to the health savings account?
7. Are contributions capped if our health coverage renews in a month other
   than January?
8. Are employers required to contribute the funding amount up front for employees?
9. Are HSAs compatible with Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs)?
10. Can employers offer an HSA as a choice to employees alongside a more traditional type of health plan?

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2. What deductible amount does a High Deductible Health
Plan require?
To be considered a high deductible health plan, a plan design must require a minimum deductible of $1,100 for employee-only or $2,200 for family in calendar year 2007. This deductible is subject to change annually and moves with the cost of living adjustment (COLA). Please check with your insurance carrier to determine which plan designs qualify as high deductible health plans.

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3. Who owns the Health Savings Account?
The Health Savings Account is considered an asset of the employee. Employers can contribute to the account on behalf of the employee, but an employer is not able to recoup any money for any reason once it is deposited into the account. The Health Savings Account is portable to the employee if he/she leaves employment.

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4. Do employers typically contribute to Health Savings Accounts on behalf of employees?
According to national statistics, more than 60% of employers contribute to Health Savings Accounts during the first year of implementation.

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5. How much do employees typically contribute into the Health Savings Account?
Employers typically contribute 50% of the individual and 50% of the family deductible in the first year.

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6. How much can be contributed to the Health Savings Account?
The total annual contribution amount is limited to the lesser of the deductible or, for 2007, $2,850 for employee-only coverage, and $5,650 for family coverage. These limits are adjusted each year for inflation.

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7. Are contributions capped if our health coverage renews in a month other than January?
Contribution limits are based on “taxable” years. Even if the health plan renews at a time other than January that is considered a calendar year basis. Therefore, contributions are restricted to the number of months remaining in the tax year based on your renewal. For example, if you renew June 1, 2007, contributions will be capped at 7/12 of the annual limit.

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8. Are employers required to contribute the funding amount up front for employees?
Employers can choose the amount, terms and frequency of contribution. You can elect to contribute the entire amount up front (accelerated contribution), or you can elect to contribute on a periodic, monthly or quarterly basis.

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9. Are HSAs compatible with Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs)?
Generally, HSAs are not compatible with FSAs or HRAs so employees cannot be enrolled in both types of plans. Limited purpose or post-deductible FSAs may be allowed with restrictions and must be handled through amending appropriate employer plan documents.

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10. Can employers offer an HSA as a choice to employees alongside a more traditional type of health plan?
Most employers who offer HSAs offer employees the option to choose either an HSA or a more traditional type of insurance.

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