How to Use Your HSA
Use your HSA
It's easy to use your Health Savings Account (HSA). With UMB, you have a variety of tools to access your funds including your UMB Health Savings Account (HSA) Visa® debit card, online bill pay and online reimbursement.
Using your HSA goes beyond paying for bills. An HSA is a great place to build up savings for expenses you have today or will have in the future. If you can afford to pay bills out of pocket and save the money in your HSA for the future, then your HSA balance will grow through interest and investment earnings.1 That way you’ll have more money for expenses when you need it most – whether that's a year from now or in your retirement.
See how an HSA can help manage your healthcare costs
Most medical expenses are covered such as:
Other eligible expenses include:
In order to make a tax-deductible or pre-tax contribution to your Health Savings Account (HSA), you must meet the eligibility guidelines published by the U.S. Treasury Department. View eligibility requirements.
Who is eligible for an HSA?
An “eligible individual” may establish an HSA. An “eligible individual” means, with respect to any month, an individual who:
- is covered under an HDHP as of the first day of the month.
- is not also covered by any other health plan that is not an HDHP (with certain exceptions for certain types of permitted coverage, as discussed more fully below).
- is not entitled to Medicare benefits, and
- may not be claimed as a dependent on another person’s tax return.
What is a High Deductible Health Plan (HDHP)?
An HDHP is a health plan with an annual deductible for an individual (self only) or a family (coverage for more than one individual) that meets the minimum deductible amount published annually by the U.S. Treasury Department.
In addition, the annual out-of-pocket expenses required by the plan do not exceed the minimum deductible amount minimum deductible amount published by the U.S. Treasury Department. Out-of-pocket expenses include deductibles, co-payments, and other amounts the participant must pay for, covered benefits, but do not include premiums or amounts incurred for non-covered benefits (such as amounts in excess of usual, customary and reasonable amounts, and financial penalties).
Can a health plan that imposes a lifetime limit on benefits still qualify as an HDHP?
A plan does not fail to be treated as an HDHP merely because it imposes a reasonable lifetime limit on benefits provided under the plan. In such a case, amounts paid above a lifetime limit will not be treated as out-of-pocket expenses in determining the annual out-of-pocket maximum.
Can a health plan that does not have a deductible for preventive care still qualify as an HDHP?
A plan does not fail to be treated as an HDHP merely because it does not have a deductible (or has a small deductible) for preventive care. For this purpose, preventive care includes such items as periodic health evaluations, routine prenatal and well-child care, child and adult immunizations, tobacco cessation programs, obesity weight-loss programs, and certain screening services.
Who can offer an HDHP?
An HDHP may be offered by a variety of entities, including insurance companies and Health Maintenance Organizations (HMOs).
Can you be covered by another health plan and still be eligible for an HSA?
You are ineligible for an HSA if you are covered under another health plan (whether as an individual, spouse or dependent) in addition to your qualified HDHP, except as provided below.
What other types of health coverage can you maintain without losing eligibility for an HSA?
You remain eligible for an HSA if, in addition to an HDHP, you have any one or more of the following:
- insurance under which substantially all of the coverage relates to liabilities from workers' compensation laws, torts, or ownership or use of property (such as automobile insurance).
- insurance for a specified disease or illness.
- insurance paying a fixed amount per day (or other period) of hospitalization.
- coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision care, or long-term care.
You may also have coverage under an Employee Assistance Program (EAP), and you may have a discount card that enables you to obtain discounts for healthcare services or products at managed care market rates.
Are HSAs allowed under a cafeteria plan?
An HDHP can be provided as part of a cafeteria plan and can be used in conjunction with an HSA. The HSA can be established under a cafeteria plan.
Can an employer allow you to elect an HSA mid-year if offered as a new benefit under the employer's cafeteria plan?
An employer may offer an HSA mid-year as a new benefit under a cafeteria plan, and allow you to elect an HSA, so long as your election for the HSA is made on a prospective basis. In such a situation, however, you may have other coverage under the cafeteria plan that cannot be changed (e.g., coverage under a health flexible spending account) that may prevent you from being an eligible individual with respect to the HSA.
The maximum amount that may be contributed to your HSA cannot exceed the maximum contribution limit published annually by the U.S. Treasury Department. These maximum contribution levels are based on whether you have single or family high-deductible health plan (HDHP) coverage. The same annual contribution limit applies regardless of whether the contributions are made by you, your employer, a family member, a friend or any combination. If you are married, view this table for more information about your contribution maximum.
Individuals who are age 55 or older may also make a catch-up contribution. Catch-up contributions cannot exceed the annual catch-up contribution limit published each year by the U.S. Treasury Department.
For any calendar year that you do not meet all the eligibility requirements on December 1, you may only contribute a maximum of the pro-rated amount, based on the months you were eligible in that year. If you meet the eligibility requirements on December 1 of any year, you may contribute the calendar year maximum for that year. However, if you contribute more than the pro-rated amount for the months you were eligible, the IRS requires that you continue to meet the eligibility rules during a testing period. That testing period is the entire following calendar for any effective date other than January 1. If you do not remain eligible to make contributions through December 31 of the following year, your contributions for months you were not eligible in the prior year should be included in your gross income on your individual income tax return and subject to income taxes and an additional 10 percent excise tax.
If both you and your spouse meet the eligibility rules, each of you could make contributions to your own HSA. The annual maximum contribution must be split between the two HSAs, based on an agreement between you and your spouse. Please note that in order to both be eligible for the catch-up contribution, you must both contribute to your own HSA. Please see the table for the maximum contribution limits for married couples.
Your total contribution for the year can be made in one or more payments at any time up to your tax-filing deadline, without extensions. (This is generally April 15) However, if you wish to have your contribution between January 1 and tax day treated for the preceding taxable year, you must take one of these steps to notify UMB, so that UMB can report it correctly to the IRS:
- Check the box “Prior Year” on the contribution form.
- Let your employer know that you would like your payroll deduction applied to the prior year.
- Provide written notification to UMB requesting that a contribution be applied to the prior year.
In the absence of one of these three steps, all contributions from January 1 through tax day will be treated as contributions for the current taxable year.
Contributions are only accepted in the form of cash. Cash Payments can be in the form of a check, online contribution or employer contribution. No other forms of payment (such as stocks or property) are accepted for HSA contributions.
UMB provides several convenient options for making one-time or recurring contributions to your HSA.
- Payroll Deduction
If you enrolled in your HSA as part of your employer’s benefit plan, you may have the option of signing up for payroll deductions. For most people, these contributions are deducted from your paycheck before federal, state and FICA (Medicare and Social Security taxes) are withheld. This contribution option provides you the greatest tax advantage, and you won’t have to wait until you file your income tax return to get the savings. Also, this is the only method that allows you to save on employment taxes, as you won’t pay FICA (5.65 percent in 2012) on your contributions. Unlike an FSA, you may start, stop or change your payroll deduction amount during the year, should your personal finances change. See your employer to find out how to sign up for payroll deductions or to change your current payroll deduction amount.
- Online Contribution
You can make tax-deductible, one-time or recurring contributions to your HSA by logging on to your account. The initial set up process will allow you to link your personal bank account with your HSA so that you can easily transfer funds whenever you want. During the first 3 ½ months of each year, you will also have the option to make prior-year contributions.
- Contribution Form and Check
Download the contribution form here. Make sure to check the appropriate box if any of the following apply to your contribution:
- Prior-Year Contribution. You may select to have your contribution deposited under the prior plan year if your contribution falls between Jan 1 and Apr 15, and you have not paid this year’s taxes.
- Employer Contribution. If this is an employer contribution.
- Re-deposit. If you need to add money back to your HSA that was mistakenly withdrawn, you must re-deposit funds by the end of the calendar year, or the mistaken withdrawal will be reported to the IRS for that year.
- Rollover. If you received a check from another HSA or Medical Savings Account (MSA) custodian, you can roll the funds into your UMB HSA. This rollover contribution will not be counted against your annual contribution maximum, as long as you deposit the funds within 60 days of your receipt of the check from the prior custodian. Note: You may not rollover IRA funds using this form. An IRA funding distribution must be done as a direct trustee-to-trustee transfer.
- IRA Funding Distribution
You are generally allowed one tax-free trustee-to-trustee transfer of IRA funds into an HSA, in your lifetime. The amount of an IRA funding distribution that is transferred to your HSA is subject to your maximum annual contribution limits.
- HSA Trustee-to-Trustee Transfer
This allows you to direct a custodian to transfer your MSA or HSA to your UMB HSA. The IRS doesn’t count the transfer against your annual contribution limits. To transfer another HSA to UMB, download the Trustee Transfer Form.
- Employer Contribution
Your employer may also make a one-time or recurring contribution to your HSA. Employer contributions are not taxable income to you. And, you may even have the opportunity to receive higher contributions if you participate in wellness or other programs offered by your employer. Please see your employer to find out if contributions are available to you.
- Other Contributions
Your friends and family may also contribute to your HSA. You can deduct their contribution from your gross income on your personal income tax return, making their gift go a little farther.
For additional information and common questions on contributions, visit our FAQ page.
HSA Contribution Limits and Out-of-Pocket Limits
for High-Deductible Health Plans (HDHP)
|HSA contribution limit||Self-only: $3,850
|HSA catch-up contributions (age 55 or older)||$1,000||$1,000|
|HDHP minimum deductibles||Self-only: $1,500
|HDHP maximum out-of-pocket amounts||Self-only: $7,500
* The Internal Revenue Service (IRS) Revenue Procedure 2022-24, provides the 2023 inflation-adjusted amounts for HSAs. .
**The Internal Revenue Service (IRS) Revenue Procedure 2023-23, provides the 2024 inflation-adjusted amounts for HSAs.