In 2003 the Medicare Prescription Drug, Improvement and Modernization Act expanded the health benefits available to consumers such as the self-employed to employer groups of any size and their employees by authorizing the use of health savings accounts known as “HSA”s. Designed to allow consumers more control over their healthcare expenses, these health savings accounts permit businesses and consumers to take advantage of high deductible health insurance plans with lower premiums. At Michael Higgins Insurance, we encourage our clients to seriously consider enrolling in a high deductible health plan and opening a HSA. It’s a smart way to lower your Arizona health costs.

A health savings account (HSA) is a tax-exempt trust or custodial account to be used for paying qualified medical expenses. To open an HSA, you must enroll in a qualified high-deductible health plan, such as BluePreferred Saver or BlueClassic Saver.

An HSA provides potential tax advantages for eligible individuals. Conveniently there are NO “use-it-or-lose-it” restrictions so money in the health savings account can be rolled over into the next year.

Who Is Eligible For an HSA?

Any individual who is covered under a qualified high-deductible health plan, not entitled to benefits under Medicare, and not claimed as a dependent on another person’s tax return is generally eligible. Michael Higgins cautions that having other health coverage in addition to a qualified high-deductible health plan such as BluePreferred Saver or BlueClassic may make you ineligible to contribute to an HSA.

How Do You Contribute to an HSA?

Qualified members with a high-deductible health plan may have contributions added to their HSA by themselves as an individual or employee, by an employer, or by joint employer/employee funding. Conveniently, contributions up to the annual maximum may be made as late as April 15 of the following tax year. Additional “catch-up” contributions, as permitted by federal law, are allowed for individuals between the ages of 55 and 64. Michael Higgins can tell you about the special rules for spouses.

Where to Open an HSA

Blue Cross® Blue Shield® of Arizona is contracted with HSABank, a FDIC-insured bank and qualified HSA trustee. Qualified members may open a health savings account with HSABank or choose another HSA administrator. For more information about HSA Bank or to obtain enrollment forms to open a health savings account, call HSA Bank at (866) 471-5275, Monday thru Friday: 7 a.m. to 9 p.m. CST or download these forms.