Glossary
"Above the Line" Deduction
In regard to HSAs, this term refers to the fact that if you make HSA contributions directly from your paycheck (before taxes are calculated and paid), you will reduce your total taxable income, regardless of whether you itemize or use the standard deduction on your income tax form.If you contribute to your HSA with after-tax dollars, you may deduct your contribution amount on your tax form ("below the line"), subject to the maximum annual contribution limits from your taxes at filing time.
Alert
An e-mail notification regarding a transaction or balance changes in your HSA.
Available Balance
The dollar amount available for immediate withdrawal from your HSA. This balance is also sometimes referred to as good funds or immediately available funds.
Beneficiary
For your HSA, you may select an individual (or individuals) as your beneficiary to inherit any HSA funds that remain in your account after death. (See Change of Beneficiary)
Catch-up Contributions
Catch-up contributions are additional funds above those listed as the annual contribution limits that an HSA accountholder may make beginning in the year when they reach age 55.
Change of Beneficiary
The Health Savings Account owner may change the designated inheritor of their account at any time. To make this change, the account owner must indicate their wishes in writing, usually with a Change of Beneficiary form.
Checks
A written order against your HSA directing the processing agent to pay money as instructed.
Claim
Submission(s) to a health plan by the enrollee that will be used to determine if and what amount of benefits should be applied for the services rendered. For an HSA, "qualified medical expense" claims may be aggregated to reach an annual deductible.
COBRA
A federal law that, among other things, requires employers to offer employees who would otherwise lose their group health plan (due to events such as termination of employment or a child losing dependent status) the opportunity to continue their current coverage under the company's group plan. Employers are required to make health plans available for periods ranging from 18 to 36 months.
Co-insurance
A possible provision within health plan coverage where the insured shares in the cost of covered services, usually expressed as a percentage basis in a summary plan description, after the insured individual meets the plan deductible.
For example, a plan with 80/20 coinsurance describes coverage where after the insured meets their deductible, the insurance company will pay 80% of the remaining covered expenses up to a set amount and the insured will pay 20%.
Comma-Separated Values Format (CSV)
A comma-delimited file format that includes text and values that can be imported into Microsoft Excel and other spreadsheet applications. Columns of data that are separated by commas and each row of data ends in a carriage return.
Co-payment
A fixed charge that an enrollee pays for service received. Co-payments remain at the same dollar amount regardless of the total cost of the service. Example: A fee at the time of a visit to a physician's office or the emergency room, or at the time of purchasing prescription drugs.
Consumer-Directed Health Care (CDHC)
A term that refers to health plans in which employees have a personal health account, such as a Health Savings Account (HSA) or a Health Reimbursement Account (HRA), from which they pay medical expenses directly.
Consumer-Directed Health Plans (CDHP)
Consumer-directed health plans typically offer reduced premium costs in exchange for a higher deductible. In addition, many provide incentives and tools to manage both health care decisions and the costs associated with them. A typical consumer-directed plan may include:
- Web-based tools that help you make decisions about your health plan choices, how much to contribute to your Health Savings Account;
- Web-based educational information you need to make informed decisions about your health care;
- Preventive coverage at little or no cost; and/or
- Other support features, such as disease management programs
Covered Expenses
Services for which the health plan makes either a full or partial payment.
Current Activities
Investments or redemptions that have been processed since the last business day. These items are not yet posted to the HSA and will not appear on the Profile History.
Current Interest Rate
The interest rate established by HSA for the current week.
Current Ledger Balance
The amount in your HSA as of the end of the last business day.
Deductible
An amount of covered "qualified medical expenses" an enrollee is required to pay before the health plan assumes part or all of additional costs as outlined in the enrollee's plan of coverage. For an HSA, if the deductible is $1,000, the enrollee must first pay $1,000 of qualified health care expenses before additional costs will be covered in part or in full by the health plan.
Electronic Funds Transfer (EFT)
An arrangement in which payments are drawn from an insured's bank account.
Employee Assistance Program (EAP)
A benefit program usually provided to employees and their families. For example, an EAP may provide confidential counseling assistance to employees and their families, such as helping them locate services and information for maintaining good health.
Enrollee
An enrollee is an individual who is eligible for and participating in coverage under a health insurance policy. This is also referred to as a member, insured or participant.
Expenses, Qualified Medical
See Qualified Medical Expenses.
Export
To send a group of transactions from HSA to another software package.
HSA Number
The number used by the processing agent to uniquely identify a HSA for an investor.
Family Coverage
Any coverage specified for more than one individual (self-only coverage).
First-dollar Coverage
Immediate reimbursement or no payment required for specific covered expenses, without meeting a deductible. Some preventive serves may have first-dollar coverage under the terms of your health plan; check your Certificate of Coverage or Plan Summary for more details.
Flexible spending account (FSA)
A pre-tax savings account funded by payroll deductions that an employee can use to pay for medical expenses not reimbursed by their health plan. Limited purpose FSAs for vision, dental, or preventive care benefits are permitted in combination with HSAs.
Note: unlike HSAs, most FSA balances do not roll over for future years' expenses.
Generic Drugs
A brand-name drug carries the name given to it by the original manufacturer, who retains the exclusive right to sell the drug for a certain period. After that period has expired, the formula of the drug must be released and other manufacturers are free to develop a version of it, known as a generic drug.
A generic version of a drug may cost 30 to 60 percent less than the corresponding brand-name drug, and generic versions are available for half of all prescription drugs.
Health Coach
A health coach may be provided by a health plan to assist an individual, such as through 24-hour phone access to medical information and/or assistance coordinating major surgery. A health coach is one example of resources generally made available to HDHP members.
Health reimbursement arrangement (HRA)
A tax-exempt account - funded and owned exclusively by an employer - that an employee can use to pay general health care expenses prior to using traditional health care coverage. Limited purpose HRAs for vision, dental, or preventive care benefits are permitted in combination with HSAs.
Health Savings Account (HSA)
An HSA is an account for saving money for current and future medical expenses. Owners receive a triple tax benefit by avoiding federal and state (in most states) income taxes on deposits, as long as funds are used for qualified medical expenses. The tax benefits include:
- Tax savings on contributions;
- Tax-free earnings on the money kept in the account; and
- Tax-free distribution of the funds when used for qualified medical expenses.
In order to establish an HSA and make tax-deductible contributions into it, the accountholder must be covered by a qualified high-deductible health plan.
High-Deductible Health Plan
An HDHP is a health benefit plan that typically offers lower premiums in exchange for higher annual deductibles when compared to traditional health plans.
To be an HSA-compatible or "qualified" HDHP, the plan must meet the requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 for minimum deductibles and out-of-pocket maximums. High deductible plans may offer first-dollar coverage of preventive care and still remain qualified.
Health Maintenance Organization (HMO)
An enrollee in an HMO uses the doctors, hospitals and clinics that participate in their plan's network. No benefits are paid for non-emergency benefits provided outside the HMO network. In addition, the enrollee selects a primary care physician who coordinates care and makes referrals to any necessary specialists.
Interest Paid - Last Year
The amount of interest calculated and posted to your HSA for the prior tax year.
Interest Paid - YTD
Interest posted to your HSA for the current year through the end of the prior month.
Maximum Annual Contribution
The total amount the government allows an HSA accountholder to add to their account in a given year. (Any employer contributions count toward this total.)
If an accountholder turns age 55 or older while owning an HSA, they become eligible to make additional contributions above the Maximum Annual Contribution. See "Catch-up Contributions".
Medical savings account (MSA)
The precursor to HSAs, these are tax-exempt trust or custodial accounts in which accountholders can save money for future qualified medical expenses. MSAs were authorized as a limited program under HIPAA; no new MSAs may be opened, but current accountholders may keep their account and continue taking tax deductions for additional contributions, or roll their account into a Health Savings Account.
Messages
Communication between a HSA investor and HSA customer service. Communication is considered confidential and is contained within the HSA website session.
Open Date
The date a HSA was originally opened.
Out-of-Pocket Maximum
An out-of-pocket maximum caps contains or limits the dollar amount an insured must pay in coinsurance, deductibles and co-payments. After the out-of-pocket maximum is reachedpaid out by an insured in a given tax year, additional covered health care expenses are paid in full by the health plan.
Portable Document Format; a printable format supported by Adobe Systems.
Permitted Insurance
"Permitted insurance" that may be held while an individual contributes to an HSA includes insurance for a specified disease or illness, such as cancer, diabetes, asthma or congestive heart failure. Other examples of permitted insurances: policies that provide coverage for workers compensation, accidents, disability, dental care, vision care or long-term care.
Posting Date
The business date on which a transaction is posted to your HSA. This is the date that will appear with the transaction on your statement.
Profile Information
Information about the HSA including balances, interest paid, taxes withheld and information about the investor(s) such as addresses and other contact information.
Preferred Provider Organization (PPO)
A health care delivery arrangement that offers insured individuals access to participating providers at reduced costs. Traditionally, PPOs encourageincent enrollees to use providers in their network by offering lower deductibles and co-payments.
Preventive Care
Health care services intended to prevent a medical condition from occurring, or to detect the onset of a condition early so that it can be more effectively treated. Preventive care includes regular medical check-ups, screening tests, vaccinations, and the encouragement of a healthy lifestyle.
Qualified Medical Expenses
Medical expenses permitted to count toward an individual satisfying their health plan deductible as defined in IRS Pub 502, available online at HSA store.
Registered Mailing Address
The address specified by the investor on the HSA Investment or Change Form where all correspondence about the HSA to this address, including statements, checks, and 1099s will be sent.
Seasonal Address
An alternate Registered Mailing Address that will be in effect for a specified time period as defined by you. The seasonal address is optional and can be defined on either the Investment Form or HSA Change Form.
Standing Instructions
Instructions for either recurring or on-request funds movement that an investor has on file for their HSA . The Standing Instructions can be communicated to the processing agent only on a signed copy of either the HSA Investment or Change Form.
Systems Alert
An alert that is automatically sent when a HSA is below a minimum amount or negative. System alerts are sent to the Alerts Inbox. You may also choose to have system alerts routed to one or more electronic addresses for receipt by external e-mail, mobile e-mail, or a PDA.
Taxes Withheld - Last Year
If taxes have been withheld, the amount of taxes that have been withheld and paid on your behalf to the Internal Revenue Service for the prior year.
Taxes Withheld - YTD
If taxes have been withheld, the amount of taxes that have been withheld and paid on your behalf to the Internal Revenue Service for the current year through the end of the prior month.
Tax-Free Contributions
When an enrollee participates in a payroll deduction program through their employer, deductions may be taken from payroll before calculating the enrollee's taxable federal income, Social Security [FICA] and for most states, taxable state income. By taking deductions pre-tax, the enrollee reduces the dollars on which they are taxed, and, as a result, reduces their total tax bill.