Principal HSA Basics
How does an HSA work?
Contributions to an HSA can be made by you, your employer or others (gifting penalties may apply). Money in the HSA can be invested, applied to qualified medical expenses, or the deductible of your high deductible health plan (HDHP).
HSAs have several advantages:
- Contributions are not subject to federal income tax.
- Interest and/or investment returns accumulate on a tax-deferred basis.
- Withdrawals for qualified medical expenses are tax-free.
- Unused balances roll over each year and there is no limit on growth much like a 401(k).
» Compare the cost of HSAs to other plan types
Determining if you are eligible for an HSA
A few simple requirements must be met to participate and contribute to an HSA:
- You must be covered under a qualifying HDHP.
- You cannot be covered under any medical insurance that is not a qualifying HDHP, and you cannot be covered as a dependent under someone else’s non-qualifying medical insurance. Other types of non-medical coverage are permitted with an HSA.
- Upon enrolling in Medicare, you can no longer make HSA contributions. You can, however use the accumulated savings in an existing HSA.
» Use our HSA calculator to help determine if you’re eligible
Understanding your savings and investment options
With a Principal HSA, choose from three savings and investment categories and move your money as needed:
- Interest-bearing checking account
- Certificates of deposit
- Mutual fund options
» Learn more about options available to you
Ready to apply?
If you are applying for a Principal HSA as part of your employer’s benefits at your workplace, please check with your employer for the unique link or URL to your employer’s HSA application.
Questions?
Call the HSA Customer Center, 800.826.2364, Monday - Friday, 7 a.m. - 7 p.m., CST.
