Health Savings Accounts

Bedrosian & Associates promotes the benefits of Health Savings Accounts (HSA).

With an HSA there are two components: the medical plan (which can be with any medical carrier) and the Health Savings Account. The Health Savings Account is a trust account, similar to a regular checking account designed to pay for routine medical expenses and provide savings for the future. Money put into the account can be used during the year or accumulated in the account. Here are some of the key concepts:

Eligible individual: Only an “eligible individual” may establish, and then contribute to, an HSA. This is someone who on the first day of any month: (1) is covered by a high-deductible health plan (HDHP); (2) is not covered by another health plan; (3) is not reenrolled in Medicare (generally, under age 65) and (4) may not be claimed as a dependent on someone else’s tax return.

High-deductible health plan: A health plan that meets certain requirements (will adjust annually for inflation) regarding deductibles and out-of-pocket expenses:

Individuals who may contribute: Contributions may be made by an eligible individual, either directly or through a cafeteria plan, or by the individual’s employer. Any person, including family members, may also contribute on behalf of an eligible individual.

Death of account owner: At death, funds in an HSA pass to a named beneficiary. If the beneficiary is a surviving spouse, the account becomes the HSA of the surviving spouse, subject to the normal rules that apply to all HSA’s. If the funds in an HSA pass to a non-spousal beneficiary, the account ceases to be an HSA as of the date of death, and the non-spousal beneficiary must include in taxable income the value of HSA assets as of the date of the death.

The maximum contribution limits for 2016 are:

  • Individual: $3,350
  • Family: $6,750
  • Catch-up: $1,000

The maximum contribution limits for 2017 are:

  • Individual: $3,400
  • Family: $6,750
  • Catch-up: $1,000

Federal law will allow an individual who becomes covered under a high-deductible plan in a month other than January to make a full, deductible HSA contribution for the year. Individuals over age 55 may also make a “catch up” contribution. An individual may make an HSA contribution for the proceeding calendar year up until April 15th the following year.

Health Reform Bill has Little Impact on HSA’s:

The passage of HR 3590 will have little impact on Health Savings Accounts (HSA’s), but here are two changes to be aware of:

  • Effective January 1, 2011, tax free HSA dollars may no longer be used to purchase over-the-counter drugs not prescribed by a doctor.
  • Effective January 1, 2011, the tax on HSA distributions that are not used for qualified medical expenses will increase to 20% from 10%.

Income tax treatment of contributions:

Qualified contributions (including family contributions) to the HSA by an eligible individual are deductible from the eligible individual’s gross income. Employer contributions to an HSA are excludable from an employee’s income and are not subject to withholding for federal income taxes or for federal payroll taxes. Growth or earnings on the contributions are not taxable while held inside the account. Excess contributions may be subject to a 6% excise tax.

Distributions from an HSA:

Distributions from an HSA may be made at any time. Distributions used solely to pay for qualified medical expenses for the account owner, spouse, and dependents are excludable from gross income (tax free).

Qualified medical expenses:

Qualified medical expenses are expenses (incurred after the HSA has been established) for “medical care.” This generally includes amounts spent for the diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function of the body, to the extent not reimbursed by insurance (see HSA eligible expenses).

Taxation of amounts not used for qualified medical expenses taxed:

Any distribution from an HSA that is not used for qualified medical expenses is included in the income of the account owner and a 10% penalty is added. The 10% penalty does not apply if a distribution is made because of an account owner’s death, disability, or reaching the age 65.

No longer an eligible individual:

If an account owner is no longer an “eligible individual” (for example, becoming enrolled in Medicare or no longer being covered by a HDHP), the HSA account may continue to be used solely to pay for qualified medical expenses continue to be received income tax-free.


Below are some useful HSA links:

fabIf you would like to open a personal Health Saving Account please complete the online application with First American Bank.In addition, you will need to mail or email proper identification to First American Bank.


Login to your First American Bank Account.
Login to your First American Bank PLUS Account.
First American Bank card activation/pin change phone number is (847) 586-2500.
hsaIf you would like to open a personal Health Saving Account please complete the online application with HSA Bank.

Login to your HSA Bank Account.


Employer Enrollment

Employer’s can set-up their enrollment to manage the employee/ employer contributions that are made to each individual account. To initiate the process please complete and fax the Employer Sign-up form to HSA Bank.

kaiser2Sample Fee List Kaiser members enrolling in HSA’s can view the Northern CA or Southern CA sample fee list to see the cost of services provided within the Kaiser facility.
Contact Us For More Information
  • This field is for validation purposes and should be left unchanged.

Bedrosian & Associates

39 Main St, Tiburon, CA 94920

Phone: (650) 367-0259 Fax: (650) 367-0599

Ron Bedrosian License #0478051

Arman Vahdatinia License #0I88850

Ryan Bedrosian License #0F00667

Ryan McKenzie License #0G66077

Alex Bedrosian License #0G33562