Health Savings Account Blog

Moreover, monthly premiums on HSA plans are typically much lower than other health insurance plans because Health Savings Account-qualifying plans are high-deductible plans. Lower premiums, coupled with the many tax-advantages, make Health Savings Accounts very attractive savings and financial growth options for many people.

Here’s what participants need to do to open their own Health Savings Accounts:

Step 1

Make sure that you are enrolled in a qualifying high-deductible health insurance plan that is compatible with Health Savings Accounts. Qualifying HSA insurance plans have an annual deductible that is higher than traditional health insurance plans. These plans must also have an annual out-of-pocket maximum. Additionally, Health Savings Account participants must not have been claimed as a dependent on another person's taxes during the previous year.

Step 2

You’ll need to choose an administrator for your Health Savings Account. By law, Health Savings Accounts must be managed by an independent third-party trustee – not by the health insurance company that issues your health insurance plan. Banks, credit unions, and some brokerage firms are generally offer Health Savings Account administration services.

Step 3

Gather together all of the required Health Savings Account paperwork. Health Savings Accounts are tax-favored accounts, so they must have certain information reported to the IRS each year by both the administrator and the account owner. Financial institutions will require some biographical information about the account holder as well as a taxpayer ID number such as a Social Security number.

Step 4

Complete all of the required the Health Savings Account paperwork. Don’t forget to sign it where required. Be sure to retain a copy of all Health Savings Account paperwork for your own records and return the original copies to your Health Savings Account administrator.

Step 5

Finally, you’ll need to deposit funds into your Health Savings Account. Contributions to your Health Savings Account can generally be made by check, bank transfer, and by wiring funds. For accounts held at a bank or brokerage firm where you already have a savings account, funds can usually be transferred between accounts. Be sure to keep records of all deposits, as Health Savings Account contributions are tax deductible in most cases.

For additional information, you can find a complete Health Savings Account How-To-Guide on our website.