Pub. 4 2014-2015 Issue 3

20 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S FEATURE ARTICLE “With individuals buying their health plans directly from the exchanges, they have more freedom to choose where to place their HSAs” KEVIN BOYLES VICE PRESIDENT BUSINESS DEVELOPMENT ASCENSUS, INC. Health Savings Accounts Poised to Expand Under the Affordable Care Act H ealth savings accounts (HSAs) have been around for nearly a decade. HSAs have signif icantly changed over the years adapting to the marketplace, as well as fulfilling Americans’ health care needs. As a re- sult, both the number of HSAs, and the dollars in them, has risen sharply over the last nine years. Withmost of the key provisions of the Afford- able Care Act (ACA) effective on January 1, 2014, HSAs stand poised to be reinvented, reinvigo- rated, and rediscovered by a whole new segment of the population. With the potential for wider availability under the new law, HSAs likely will expand at an even greater rate than in the past. With expansion comes opportunity for finan - cial organizations to bring in new accounts, new customers, and new noninterest revenue. Is your organization in the game or on the sidelines for this opportunity? How HSAs Work HSAs are a tax-deferred savings account designed to pay the qualified medical expenses of the HSA owner, the HSA owner’s spouse, and dependents. HSAs have eligibility requirements. An HSA-eligible individual is someone who • is covered by a high deductible health plan, • is not covered by another health plan that is not an HDHP, • is not enrolled in Medicare, and • is not eligible to be claimed as a dependent on another person’s tax return. For anHDHP to be HSA-eligible, it must meet the following requirements. • For 2014, the HDHP must have minimum deductible of $1,250 for self-only coverage and $2,500 for family coverage. • For 2014, the out-of-pocket expense maxi- mum (which includes most everything but insurance premiums) cannot exceed $6,350 for self-only coverage and $12,700 for family coverage. An HSA also has restrictions and require- ments. For 2014, the contribution limits for HSAs are $3,300 for self-only coverage and $6,550 for family coverage, which includes contributions from individuals and employers. Only distribu - tions for qualified medical expenses are tax-and