Mastering Health Savings Accounts

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Questions and Answers

Which of the following is true about health savings accounts (HSAs)?

  • HSAs are owned by the individual and can only be used to pay for medical expenses
  • HSAs do not allow funds to roll over from year to year
  • HSAs are subject to federal income tax at the time of deposit
  • HSAs are only available to individuals who have a high-deductible health plan (HDHP) (correct)

What is the main difference between a health savings account (HSA) and a flexible spending account (FSA)?

  • HSA funds are owned by the individual, while FSA funds are owned by the employer
  • HSA funds can roll over and accumulate year to year, while FSA funds do not (correct)
  • HSA funds can only be used to pay for qualified medical expenses, while FSA funds can be used for any expense
  • HSA funds are subject to federal income tax, while FSA funds are not

What is a Health Reimbursement Arrangement (HRA)?

  • A tax-advantaged medical savings account available to individuals with a high-deductible health plan (HDHP)
  • A type of health insurance plan that covers only major medical expenses
  • A government program that provides healthcare coverage to low-income individuals
  • An alternate tax-deductible source of funds paired with a standard health plan (correct)

What types of expenses can be paid with health savings account (HSA) funds?

<p>Qualified medical expenses (C)</p> Signup and view all the answers

When did the requirement for a doctor's prescription to pay for over-the-counter medications with HSA funds get lifted?

<p>January 1, 2020 (A)</p> Signup and view all the answers

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