A health savings account, or HSA, is an account you use to pay for qualified medical, pharmacy, dental and vision expenses and save on taxes. The key things to know about HSAs are:
- You must be covered by a high-deductible health plan to open an HSA
- You own your HSA and the money in it
- It’s not a “use it or lose it account”; funds roll over from year to year
- Anyone can deposit money in your HSA, up to an annual limit set each year by the IRS
Compared to other health spending accounts, HSAs give you more ways to save on taxes and health care expenses, now and in the future.
Fidelity Go® provides discretionary investment management for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS and NFS are Fidelity Investments companies.
1. If your employer allows you to make pre-tax payroll contributions to an HSA, those are both FICA tax-free and federal income tax-free. Please check with your employer to see if this is possible with an HSA outside of one they provide. Although post-tax contributions are federal income tax-deductible, you will be required to pay FICA taxes on those contributions. This means post-tax HSA contributions may not be as tax-advantaged as pre-tax HSA contributions.
2. Examples of qualified medical expenses covered by HSAs but not FSAs could include COBRA continuation coverage, the cost of health coverage while receiving unemployment benefits, Medicare premiums other than a Medicare supplemental policy, and qualified long-term care insurance contracts.
3. The cost of HSA-eligible health plan coverage or premiums is generally lower than a non-HSA-eligible health plan, which could be used to increase your take-home pay or to help contribute to an HSA, for example, to help contribute enough to your HSA to meet the annual deductible or other savings goals. Any contributions you or your employer may make to your HSA are federal tax-free and could help you pay for the HSA-eligible health plan’s deductible or other qualified medical expenses on a tax-free basis in the current year or be saved for future qualified expenses. The cost-sharing provisions of the HSA-eligible health plan that apply after you meet the HSA-eligible health plan’s deductible, such as co-pays or co-insurance, are subject to a maximum out-of-pocket expense limitation, which can help you assess your potential cost of the HSA-eligible health plan should you need access to care.
4. Two IRA transfers to an HSA may be permitted in the same year. This could happen when the account holder initiates an IRA transfer while enrolled in self-only health care coverage and then changes to family HSA-eligible health care coverage in the same year. The account holder would then be permitted to initiate a second IRA transfer during that year.
5. If you receive Social Security benefits, you may be automatically enrolled in Medicare Part A and become ineligible to contribute to a HSA in the month that you reach age 65.
6. The securities in your account are protected in accordance with the Securities Investor Protection Corporation (SIPC) for up to $500,000, including up to $250,000 for uninvested cash. We also provide additional coverage above these limits. Neither coverage protects against a decline in the value of your securities, nor does either coverage extend to certain securities that are considered ineligible for coverage. For more details on the SIPC, or to request a SIPC brochure, visit www.sipc.org or call 202-371-8300. Please note that if you utilize the Fidelity HSA bank sweep program in connection with your core account, any balance you maintain in your account is swept to an FDIC-insured position at a bank with which Fidelity has established a relationship, called a "Program Bank." Until funds are swept to the Program Bank, they are covered by SIPC. Once funds are swept to a Program Bank, they are no longer covered by SIPC, but they are eligible for FDIC insurance subject to FDIC insurance coverage limits. For more information about the sweep, please refer to the FDIC-Insured Deposit Sweep Program Disclosures document, which is attached to the HSA Customer Account Agreement.
7.
You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund’s sponsor, have no legal obligation to provide financial support to money market funds and you should not expect that the sponsor will provide financial support to the fund at any time.
Fidelity’s government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares, nor temporarily suspend your ability to sell shares if the fund's weekly liquid assets fall below 30% of its total assets because of market conditions or other factors.
8. Under the Fidelity FDIC Deposit Sweep Program, uninvested cash balance is swept to one or more Program Banks where it earns a variable rate of interest and is eligible for FDIC insurance. At a minimum, there are five banks available to accept these deposits, making customers eligible for nearly $1,250,000 of FDIC insurance. If the number of available banks changes, or you elect not to use, and/or have existing assets at, one or more of the available banks, the actual amount could be higher or lower. Customers are responsible for monitoring their total assets at each of the Program Banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. The deposits at Program Banks are not covered by SIPC.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
Tax-free contributions, investment earnings, and distributions is with respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation. Please consult with your tax advisor regarding your specific situation.
*
Fidelity's Virtual Assistant uses advanced technology and artificial intelligence to help with frequently asked questions and to enhance your digital experience. It is designed to be both anticipatory and responsive based on your search terms, information you enter in reply to the Virtual Assistant's questions, and your account and other information on file with Fidelity. Fidelity does not guarantee accuracy of the Virtual Assistant's responses or alignment of its suggestions with your intended purpose. The Virtual Assistant does not recommend the purchase or sale of specific securities or digital assets. While it may offer educational information, it does not have the capability to discern what investment choices would be suitable for your personal situation. Do not attempt to place trade orders through the Virtual Assistant; it can provide you with guidance as to how to place a trade at Fidelity, but the Virtual Assistant cannot execute trades on your behalf. Any personal, account or other information you provide to the Virtual Assistant, as well as all search information entered, may be retained, accessible to Fidelity personnel, and used and shared consistent with Fidelity's Privacy Policy. Notwithstanding, you should not provide the Virtual Assistant with credit or debit card information or protected health information.
Investing involves risk, including risk of loss.