Member FAQs

Health Savings Accounts (HSAs) are tax-exempt trusts or custodial accounts, similar to an IRA.

The money deposited into an HSA account is 100% tax-free. You can use it to pay for qualified medical expenses. Any money that remains in your account stays there. It keeps growing on a tax-favored basis to cover future medical expenses or to supplement retirement.

HSAs encourage savings for future expenses, such as medical, out-of-pocket and long-term care expenses.

• Accounts are owned by the individual, not the plan or employer.
• Accounts are completely portable, regardless of the individual’s employer, employment status, area of residence, age, marital status or future medical coverage.
• There is no requirement to use unspent balances within a specific timeframe, unlike a Flexible Spending Account (FSA).
• Accounts grow through interest and investment earnings.
• All contributions are made to your account pretax.

• MHBP will contribute up to $1,200 for Self Only coverage, or up to $2,400 for Self Plus One or Self and Family coverage per year to your HSA.
• Plan contributions are made in monthly increments of $100 for Self Only coverage, or $200 for Self Plus One or Self and Family coverage for each month you are eligible for an HSA.
• You may make an additional contribution to your HSA, up to the IRS limits.
• You may make a contribution in one lump sum at the beginning of the coverage year, or in increments throughout the course of the coverage year. Your eligible family members may also contribute to the account on your behalf.
• You have the option to make additional tax-free contributions to your HSA, so long as total contributions don’t exceed the limit established by law. These limits include our  contribution amount each month. The limits are listed in the IRS website. Visit the IRS Website.

Please note – you are responsible for keeping track of your contribution totals, which must not exceed the IRS limit. We recommend reviewing IRS Publication 969 for additional information about funding your HSA.

• You can choose to use your HSA funds to pay for qualified medical expenses such as office visits, lab work and prescription drugs while you’re meeting your annual deductible. Expenses you incur for services covered under your health plan will count toward your annual deductible.
• You may also choose to use your HSA funds for qualified services not covered by the health plan. These include dental care, weight loss programs and eyeglasses. However, expenses that your health plan doesn’t cover won’t count toward your annual deductible.
• If you prefer, you can choose to save any or all of your HSA funds, and pay for your medical expenses out of pocket throughout the year, until you meet your annual deductible.
• Once you’ve met your deductible, additional health care expenses are covered under the terms of your medical plan. You can choose to use your HSA funds to pay for fixed expenses, such as copayments.
• If you don’t use all of your HSA dollars, the remaining amount will carry over into the next year. Please check the Official Plan Brochure for more information about your HSA.

To be eligible for an HSA, you must meet certain requirements:

• Only people covered by a high-deductible health plan (HDHP).
• You can’t have Medicare or TRICARE.
• You can’t be claimed as a dependent on another person’s tax return.
• You or your spouse can’t have a regular flexible spending account (FSA)or regular health reimbursement arrangement (HRA)* in the same year.
• You can’t have received certain Veterans Administration (VA) health benefits in the previous three months.
• You can’t be covered under any other health plan that pays for out-of-pocket health care expenses before you meet your plan deductible. However, the legislation provides exemptions for certain types of “permitted” (generally limited) health coverage such as that provided under state workers’ compensations laws, property insurance, insurance for a specified illness, and hospital indemnity insurance. An HRA or FSA limited to these types of benefits may still be offered alongside an HSA. In most cases, members would use the FSA for dental.
• If you’ve enrolled in the MHBP Consumer Option and you don’t qualify for an HSA, the plan will open an HRA for you.

• HSAs are “above the line” deductions, meaning the deduction is always available and is not dependent on earnings, tax-filings status, employment status or whether or not you itemize tax deductions. Interest earnings inside the HSA account are not taxed.
• Distributions taken from an HSA are tax free if they are taken for qualified medical expenses incurred by the person covered under the HDHP, their spouse or their dependents.
• You can use it to pay for other health insurance except:
  • COBRA premiums for the continuation of health care benefits
  • Health coverage while receiving unemployment compensation
  • Medicare premiums and out-of-pocket expenses
  • Long-term care insurance
• Members between the ages of 55 and 65 can make additional pretax “catch-up” contributions of $1,000 each year.
• If you make your maximum annual contribution early in the coverage year, and then you leave your employer before that coverage year has ended, you will be responsible to pay the taxes on any amount that exceeds the coverage.

The Internal Revenue Service has defined qualified medical expenses in a very broad way, to include “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” Based on that definition, qualified medical expenses include many services from acupuncture to dental procedures to weight-loss programs. Prescription medications are included as well. However, expenses that are merely beneficial to general health, such as vitamins or vacations, do not qualify. In general, health insurance premiums do not qualify either.

Consumer Option provides traditional style benefits after you meet your deductible. The difference is that the deductible is higher than most traditional plans and you get a health savings account (HSA) that offers tax advantages. The deductible applies to all services except network preventive care. For care that’s related to an illness or injury, you can use funds from your HSA to pay for that care.

You should not use your HSA Visa debit card at the doctor’s office. To ensure that you receive the network discount, tell your doctor’s office to bill MHBP first. We will apply the appropriate discount. When you get the bill, you can simply fill in your debit card number as a form of payment. Then the funds will be taken out of your HSA to pay for the covered medical expense. Once you reach your deductible and are eligible for traditional plan benefits, you can simply pay your copayment at a network doctor using your debit card.

An FSA is a “use-it-or-lose-it” account. You fund it with a specified amount of tax-free money. If you don’t use that money by the end of the year, you lose it. In addition, you can’t earn interest on the money in an FSA. The money in an HSA, on the other hand, is yours to keep, year after year. You can spend it as you wish on qualified medical expenses (or even for other expenses, with tax and penalties). You can earn tax-free interest on money in your HSA.

Your HSA is like any other investment account in this way; you name a beneficiary, and any money remaining in your account goes to that person should you pass away.

If you enroll in Medicare, you can no longer make contributions to your HSA. However, you can continue to withdraw money tax free for qualified medical expenses. When you’re 65, you can even withdraw money for non-medical expenses and pay only your current income tax rate.

You can have an HSA, but the total amount you can contribute each year will depend on the IRS Defined Limits. The total amount that can be collectively (by MHBP and you) contributed each year must not exceed the statutory limit–$3,850 Self Only coverage and $7750 for Self Plus One or Self and Family coverage.