Everything You Need to Know About Health Savings Accounts (HSAs)

A couple reviewing their Summary Health Plan Payments document

Health savings accounts (HSAs) help offset the out-of-pocket costs of high-deductible health plans and offer significant tax savings. Find out more.

Some of our Consumer-Directed Health Plans (CDHP) are eligible to be paired with a MyMoney Health Savings Account (HSA). This health spending and savings account helps you save for future care needs and offers numerous tax advantages. And the money is yours to keep. It's just one way we can help support your well-being and enable you to get the most out of your benefits. 

What is a health savings account? 

HSAs let you set aside money on a pre-tax basis to pay for qualified medical expenses. You can use the money for health insurance deductibles, co-payments, co-insurance, and eligible expenses not covered by your plan.

HSA accounts lessen the financial impact of high-deductible health plans, which have more out-of-pocket costs than traditional health plans. They are interest-earning savings accounts from which you can withdraw money to pay for qualified medical expenses now or in the future.

You do not need to spend the money within a specific timeframe. It’s yours to keep, even if you change jobs or retire. The IRS establishes maximums that HSA participants can contribute each year. You may also be eligible to invest additional funds. If you’re 55 or older, you have higher contribution limits, enabling you to accelerate retirement savings.  

There also are three main HSA tax benefits:  

  1. Contributions you make are with pre-tax dollars. This also reduces your taxable income.
  2. HSA-eligible expenses are not subject to sales tax. 
  3. Interest your money earns is tax-free. 

HSA-eligible expenses

You can use HSA funds to pay for qualified medical expenses following the IRS rules. You’ll want to avoid using your HSA funds for non-qualified medical expenses to avoid paying a tax penalty. 

There are many HSA-eligible expenses, including: 

  • Health plan out-of-pocket costs: Monthly premiums, copays, and deductibles
  • Dental services: Cleanings, orthodontics and restorative treatments, like root canals
  • Medications: Prescriptions and some over-the-counter drugs
  • Medical equipment: Crutches, wheelchairs, walkers, and canes
  • Mental health services: Psychiatric care, inpatient therapy, and outpatient assessments
  • Vision services: Eye exams, glasses, contact lenses, and laser eye surgery
  • Women’s health products and services: Birth control, infertility treatment, and breast pumps 

For a complete list of HSA qualified medical expenses, visit our MyMoney online learning center.

Health savings accounts resources

We offer Health Savings Accounts to employer groups and individuals and their family members. We provide all MyMoney HSA account holders with information that makes it easy to access your information and spend funds, including: 

  • Online resources: Our MyMoney HSA online learning center provides helpful information, including eligible expenses, tips for submitting claims, and more. We also offer an app that makes it easier to determine an item’s HSA eligibility at the point of sale. 
  • HSA debit card: You receive a Blue Cross and Blue Shield of Vermont Visa® debit card linked to your HSA account. Use the card to make HSA-eligible purchases at stores, clinics, and other care facilities. 
  • Award-winning customer service: Help is always just a phone call away. Call (866) 999-2605 and talk to our representatives specializing in health spending and savings accounts. 

Start saving with a MyMoney HSA account

Take your first steps to savings by: