BlueEdge^SM

BlueEdge^SM HSA Health Plan

What is a Health Savings Account?

A Health Savings Account (HSA) is a tax-favored bank account that is used in combination with a high deductible health insurance plan such as Blue Cross and Blue Shield of Illinois' BlueEdge^SM. The money you put into your health savings account helps pay the annual deductible, as well as any other qualified medical expenses (including coinsurance) that may not be covered by your health plan after you meet your deductible.

Although you do not have to open a Health Savings Account with a BlueEdge^SM high deductible health insurance plan, doing so can reap financial benefits today and into the future.

With a Health Savings Account, you enjoy the advantages of:

• Choice: You select the HSA Bank.
• Pre-tax contributions¹: lower your taxable income.
• Tax-free growth: earn interest and build tax-free savings. Unused funds roll over from one year to the next.
• Tax-free withdrawals: when used for qualified medical expenses.
• Retirement income: funds can be withdrawn for any purpose without penalty after reaching age 65 (taxes may apply).
• Portability: your HSA bank account stays with you, even if you change employers.
• Investment flexibility: most HSA banks offer a variety of investment options including stocks, bonds, mutual funds and money market funds.

HSA Eligibility

In order to open and maintain a bank HSA, individuals must meet the following requirements:

• Be covered by a qualified High-Deductible Health Plan (HDHP) such as BlueEdge^SM
• Not be covered under another health insurance plan. (Individuals with limited benefit policies, including dental, vision and worker's compensation, may still be eligible for an HSA)
• Not be enrolled in Medicare
• Not be claimed as a dependent on another person's tax return
• Not have funds in a Flexible Spending Account (FSA) at the end of the plan year; or if funds are in an FSA at the end of the plan year, the individual can make a one-time transfer of the entire FSA account to the HSA during the FSA grace period
  

1. Health Savings Accounts (HSA) have tax and legal ramifications. Blue Cross and Blue Shield of Illinois does not provide legal or tax advice, and nothing herein should be construed as legal or tax advice. These materials, and any tax-related statements in them, are not intended or written to be used, and cannot be used or relied on, for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the promotion or marketing of the transaction(s) or matter(s) addressed by these materials. You should seek advice based on your particular circumstances from an independent tax advisor regarding the tax consequences of specific health insurance plans or products.