Health Savings Account


On Monday, March 5, 2018 the IRS announced that the previously released maximum family contribution limit for a Health Savings Account is reduced from $6,900 to $6,850 in 2018. This change is effective immediately, and any family contribution to an HSA exceeding the $6,850 could be subject to taxes and penalties.

This HSA contribution change is a result of a provision in H.R. 1 (“Tax Reform”) that changed the way inflation-related increases are calculated from the Consumer Price Index (CPI) to the new factor known as “chained CPI.”

For individuals who only cover themselves, the annual limitation on deductions is $3,450, which is the same as in 2017. Flexible spending accounts, transit and other benefit limits linked to the chained consumer price index because of tax reform were not affected for 2018.

For more information, please see the IRS Bulletin No. 2018-10.

What is an HSA?

A Health Savings Account (HSA) allows individuals to pay for current health expenses and save for future qualified medical expenses on a pre-tax basis. Funds deposited into an HSA are not taxed, the balance in the HSA grows tax free, and that amount is available on a tax free basis to pay medical costs. When you enroll in an HDHP, the health plan determines whether you are eligible for a Health Savings Account (HSA).

Your HSA dollars can be used to help pay the health insurance deductible and qualified medical expenses, including those not covered by the health insurance, like dental and vision care. Any funds you withdraw for non-qualified medical expenses will be taxed at your income-tax rate, plus 20% if you're under 65.

Am I Eligible?


Who is eligible for an HSA?
You are eligible for an HSA if you are:
Enrolled in an HDHP and not covered by another health plan (including a spouse’s health plan, but not including specific injury insurance and accident, disability, dental care, vision care, or long-term care coverage)

  •  Not enrolled in Medicare
  •  Not in receipt of VA or Indian Health Service (IHS) benefits within the last three months
  •  Not covered by your own or your spouse’s flexible spending account (FSA), and are not claimed as a dependent on someone else’s tax return

American Fidelity administers all Health Savings Accounts for the Sequim School District.

American Fidelity
Health Services Administration
2000 N Classen Blvd, 7E
Oklahoma City OK 73106

IRS Publication 969 on HSA Guidelines and Rules
HSA Application
Sequim School District HSA Contribution Election Form


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