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Brokers, Agents & Consultants / Education & Tools / FAQ

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Frequently Asked Questions (FAQs)

You have questions. We have the answers. Please use our FAQs below to find answers to the most commonly-asked questions on HSAs and HSA debit cards.

What is an Health Savings Account (HSA)?

Does an HSA have to have money in it before it can be used to pay a provider?
Does an employer need to create an HSA plan?
When asked by a merchant or directed by a point-of-sale system to choose a payment method, should debit or credit be selected?
How do HSAs work?
What if the card doesn't work at the point of sale or the cashier says the transaction has been declined?
Are assets in an HSA protected from bankruptcy of any type, similar to how assets in a 401k or pension plan are protected?
What is an HSA-qualified High Deductible Health Plan (HDHP)?
Can an individual request a duplicate card for other family members?
What are the advantages of an HSA?
Is money safe in the UMB HSA?
Does the HSA have a debit card to access funds?
What should be done if the card is lost or stolen?
What is an HSA?
Does UMB provide statements?
Does an employee's HSA receive interest?

Who is eligible for an HSA?

If a HDHP medical plan covers domestic partners, are domestic partners eligible to open an HSA?
Who is eligible for an HSA?
May spouses have a joint HSA?
If an individual has Veteran benefits, can they have an HSA?
If an employer has a qualified HDHP which an employee is eligible for but does not participate in because they receive benefits through their spouses employers plan, can they still take part in an HSA?
What happens to money in an HSA if HDHP coverage is no longer maintained?
How is an HSA different from an FSA?
Can an individual be covered by another health plan and still be eligible for an HSA?
Can an individual open an HSA and also enroll in a health care Flexible Spending Account FSA?
What is a limited purpose FSA?
What other types of health coverage permitted coverage can be maintained without losing eligibility for an HSA?

How is an HSA established?

Can an HSA acccountholder title his or her account in the name of a trust?
If the HSA is already established but not fully funded, can future contributions be used to pay for expenses incurred after the HSA was established?
What if the individual had an HSA before opening a UMB HSA?
What is the extent of responsibility for an employer to communicate employees rights on the HSA at termination or if the employer drops the HSA benefit program?
Is the HSA established the same date the HDHP is effective?
What does it mean to establish an HSA?
How much does an HSA cost?
How is an HSA established or opened?

What about HSA Contributions?

If both spouses are 55 and older, are two catch-up contributions allowed?
In what form may contributions be made to an HSA?
How are contributions treated for partners in a partnership or limited liability company LLC?
How does turning age 55 affect an HSA catch-up contributions?
If an individual already has an HSA set up through a former employer, what happens if the employee leaves/is terminated?
How are contributions treated for owners and shareholders of S corps?
Can an employer take their contributions made in error out of an HSA?
What happens when HSA contributions exceed the amount that may be deducted or excluded from gross income excess contributions?
Who is responsible for determining the amount of eligible contributions?
When is the deadline for contributions to an HSA for any particular year?
Who may contribute to an HSA?
What is meant by the IRS testing period?
How does an individual contribute to their HSA?
Are employers required to make contributions to the HSAs of independent contractors, even if they are covered by the company's HDHP?
What does the Special Rule — Last Month Rule mean?
Can HSA contributions be made by employers the same way they can with a Health Reimbursement Account (HRA)?
How do contributions work if both spouses have individual HSAs?
What is the dollar amount of HSA contributions allowed each year?
Can individuals make their entire contribution to the HSA at the beginning of the year?
Can contributions be made if an individual is still working but enrolled in Medicare?
When will UMB return excess conbributions?
How does a spouses health coverage impact contribution limits?
If an HDHP is on plan year (starts on a date other than January 1) how does that work with HSA contribution maximums?
How does a domestic partners health coverage impact contribution limits?
Can a contribution made in December be applied to the following tax year?

What about cafeteria plans?

Can employers provide different contribution amounts to different employees in an HSA?
Are HSAs allowed under a Section 125 Cafeteria Plan?
What are the rules regarding contributions made by an employer?
Can an executive only HSA contribution plan for executives be offered?
Why process HSA savings through the Section 125 Plan?
Can an employer allow an employee to elect an HSA mid-year if offered as a new benefit under the employers Cafeteria Plan?
inside a Section 125 plan
Is comparability only applicable to non-Section 125 Cafeteria Plans?

What about wellness incentive contributions?

Can an employer offer incentive dollars to an employee's HSA for participating in a health improvement program?
Can an employer tie health/wellness incentives to medical outcomes i.e. meeting/exceeding specific biometric screening results?
Can an employer fund a select group of employees who choose to participate in a wellness program?
How would an employer design wellness incentives into an HSA without violating discrimination rules?

Are rollovers and transfers permitted?

What are the rules regarding rollovers and transfers of HSA funds?
How is a rollover treated?
What are the rules regarding the rollover of IRA funds into an HSA?
Are rollover contributions to HSAs permitted?

What about HSA distributions?

When is an individual subject to the 20 percent premature distribution penalty tax?
How does the IRS know that the distributions from the HSA are used for qualified medical expenses if UMB or the employer is not responsible for substantiation?
Is third party substantiation required for HSAs?
What are the HSA guidelines regarding disbursement from the HSA for domestic partners?
How does an individual get their money out of their HSA to pay for qualified medical expenses?
Can an individual use the money in their HSA for tax dependents even if they are not covered by the accountholders insurance plan?
How is a child of divorced or separated parents treated relative to qualified medical expenses?
Can an individual use HSA funds to pay insurance premium expenses?
What expenses are considered qualified medical expenses?
What are the rules that apply to an HSA pursuant to a divorce decree?
What if an individual has medical expenses that are more than the amount of money they have in their HSA?
What happens if an individual withdraws money from their HSA to pay a medical bill, but is later reimbursed by their insurance company for that medical expense
Can HSA funds be used to pay for medical expenses incurred by a child under the age of 26 and covered by the accountholders HDHP even though the child is not claimed as a dependent on the accountholders tax return?
What happens if an HSA distribution is made as the result of a factual mistake?
When can an HSA accountholder take distributions from an HSA?
Do HSA funds have to be used by the end of the year?
Is UMB, as custodian, responsible for determining whether HSA distributions are used for medical expenses?

What happens when an individual becomes eligible for Medicare?

Where can an individual go for more information about HSAs and retirement?
If an individual is still employed and has health insurance through his or her employer, is it a requirement that the individual also enroll in Medicare?
How does enrollment in Medicare affect the individual's spouse?
What happens to the money in an HSA after the accountholder turns 65?
What happens when an individual becomes eligible for Medicare?
What happens after an individual enrolls in Medicare?
What happens to an individuals HSA if they become disabled?

What happens to the HSA upon an accountholders death?

If the account beneficiary of an HSA is the surviving spouse, may the spouse make contributions to the account?
What happens to the HSA upon an accountholders death?
What are the tax consequences of HSA distributions following the death of the accountholder?

What are the tax implications of participating in an HSA?

Are there any tax consequences to pledging the HSA as a security for a loan?
Where can an individual go for more information about the tax treatment of HSAs?
What happens if an accountholder receives an HSA distribution as the result of a mistake of fact due to reasonable cause?
What information does UMB report to the IRS?
What is the tax treatment of an eligible individuals HSA contributions?
Do contributions to an HSA in any way affect an individuals ability to contribute to an individual retirement account IRA?
Do the tax benefits phase out at certain income levels?
Are HSAs allowed under a Section 125 Cafeteria Plan?
If administration fees are withdrawn from the HSA, are the withdrawn amounts treated as taxable distributions to the accountholder?
What does it mean to make a pre-tax contribution?
What does the employer need to report if they make contributions to the HSA or allow employees to make payroll contributions on a pre-tax basis?
Is UMB responsible for tracking a maximum limit on contributions to MSAs and HSAs?
Does UMB distinguish between employee and employer contributions for MSAs?
Is it possible to have both an MSA and an HSA or more than one HSA?
What information is provided by UMB to help accountholder tax filings?
What is the tax treatment of earnings on amounts in an HSA?
If administration and account maintenance fees are withdrawn from the HSA or paid by the accountholder or employer directly to UMB, does the amount withdrawn or paid for these fees increase the maximum annual HSA contribution?
Can an MSA be rolled over to an HSA?
What medical expenses are eligible for tax-free distributions from an HSA?
What does it mean to make a post-tax contribution?
What are the tax implications of participating in an HSA?
If UMB converts an MSA to an HSA and funds are not withdrawn in the process, is this considered a rollover or a trustee-to-trustee transfer?

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Introducing UMB HSA Saver

UMB HSA Saver is a unique investment platform designed with ease in mind. Account holders can easily research, buy and sell funds with a couple clicks.

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How to Use ReceiptVault

Easily track and manage your healthcare receipts using ReceiptVault.

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HSA FAQ Resource

Find answers to your most common HSA questions in our comprehensive HSA FAQs section.

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Funds in an HSA Deposit Account are held at UMB Bank, n.a., Member FDIC. FSAs and HRAs are NOT deposits or obligations of UMB Bank, N.A. and are NOT insured by the FDIC. High-Deductible Health Plans constitute insurance products, which are not offered by UMB Bank, n.a. and are not FDIC-insured.

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Frequently Asked Questions (FAQs)

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