Meeting the insurance needs of
Central Florida individuals and businesses.

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Insurance Consultants
of Central Florida

227 S. Orlando Ave, 1st Floor
Winter Park, FL 32789

Phone: (407) 740-5337
Fax (407) 740-8786

Health Savings Accounts

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to contact one of our individual health agents

Questions and Answers regarding Health Savings Account Distributions
When can funds from an HSA be withdrawn tax free?
HSA funds can be withdrawn tax free at any time to pay for the qualified medical expenses of yourself,
your spouse and dependents. These expenses include:
•   Prescription and over-the-counter drugs
•   Doctors visits, lab, x-ray and other diagnostic and treatment services
•   Dental, vision and psychiatric care services
•   Qualified long-term care services and long-term care insurance premiums
•   Medicare Part A and B premiums, Medicare HMO or Medicare Advantage premiums (but not Medicare supplemental policy premiums)
•   COBRA health continuation coverage premiums and health insurance premiums for those on unemployment compensation
It is your responsibility to ensure that expenses paid from the HSA are qualified medical expenses and to keep adequate records concerning the use of HSA funds.
Can HSA funds be withdrawn to pay for non-medical expenses?
Yes. Such withdrawals, however, are subject to income tax plus a penalty tax of 10% of the amount withdrawn. Any such withdrawals made after you reach age 65, die or become disabled are not subject to the 10% penalty tax.
What happens if I become ineligible for an HSA?
In this event, no additional contributions can be made to your HSA. The funds in the HSA, however, can still be used as described above. If used solely to pay for qualified medical expenses, the distributions will be free of income tax.
What happens if I die?
If the beneficiary listed on the HSA is your surviving spouse, she/he becomes the new account owner and can use the HSA subject to the normal rules that apply to all HSAs. If the beneficiary is other than your surviving spouse, the funds in the HSA are taxable income to your beneficiary in the year of death, except for any of your qualified medical expenses paid from the HSA within one year of death.

 

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