Blue Cross HSA Rules in Florida

The state of Florida has determined several guidelines for the registration and use of health savings accounts (HSAs) in the state. When you open an HSA in conjunction with a qualifying insurance plan from Blue Cross of Florida, you must register the account with proper state authorities. Once your account is registered, then you may make limited tax-free contributions to the HSA each year and may spend any amount from the account for health purposes without paying any tax.

Selecting a Blue Cross Plan

• Before you register your HSA with the state of Florida, you will need to select an eligible health investor plan from Blue Cross. Blue Cross offers several health investor plans that vary in terms of premium cost, deductible cost and scope of medical coverage offered. You'll need to consult your local Blue Cross insurance agent or visit the Blue Cross website for price quotes and information on HSA-compatible health plans.

Activating Your HSA

• Once you sign up for a Health Investor Health Plan with Blue Cross, then you must notify the state of Florida of your intention to open a tax-free HSA. One way to activate your account is to download and complete an HSA Application and mail the completed form to:

  HSA Operations

  P.O. Box 1828

  Columbus, GA 31901

  You'll need to provide the state with information about your Blue Cross health plan and about the bank at which you are opening your account. You must also provide your social security number and other personal information.

Dependent Eligibility

• You may choose to open an individual HSA or a family HSA that can be applied to both you and your dependents. If you are under age 55, then the maximum amount that you may invest in an HSA each year depends on the type of plan you select. Dependents that are eligible for coverage under a family HSA include your spouse, unmarried children under 19, unmarried children under age 25 if you can claim them as a dependent, and mentally or physically disabled children of any age that you may claim as a dependent. Your HSA may also cover newborn children of any of your dependent children, as long as your child still qualifies as a dependent and the newborn is under age 18 months.

Investment Limits

• Florida HSA rules limit the amount of money that you may contribute to your tax-free Blue Cross HSA in a calendar year. The amount that you may contribute depends on the type of HSA that you sign up for and depends on your age as of the end of 2010.

  As of 2010, if you are under age 55 by the end of December 2010, then you may contribute up to $2,550 to an individual HSA or you may contribute up to $5,150 to a family HSA that covers both you and your dependents. If you are over age 55 and you are contributing to an individual HSA account, then your contribution limit increases to $2,550 for the year. Your employer may provide a contribution of 20 cents per dollar that you contribute to your HSA.

Withdrawing Funds

• The bank at which you open your HSA will issue personal checks and a debit card that are linked to your HSA. You may you use these instruments to withdraw and use funds contained in your HSA, just as you would with any checking account.

HSA Tax Status

• According to Internal Revenue Service Publication 502, all money that you withdraw from an HSA and use to pay any health care expense is entirely tax deductible. Eligible health are expenses include health insurance deductibles, doctor and hospital visits, medications and medical equipment. If you spend money from your HSA for any reason other than health care expenses ,then you are required to pay federal income tax on all money spent.

  All money that you contribute to an HSA may be deducted from your net income on your federal income tax return up to the maximum investment limits.

Unused Account Balance

• Any money that is in left in your HSA at the end of the year rolls over until next year. This enables you to accrue sums to use for future medical expenses in years that you are healthy. If at any point you decide to change your medical plan to a plan that does not include an HSA, then you may not add more money to the account, but you may still retain the funds already in your account along with all associated tax benefits.