Free HSA Fundamentals & Regulations Questions and Answers

Question 1

Who is eligible to open a Health Savings Account (HSA)?

Accepted Answer

Individuals enrolled in a High-Deductible Health Plan (HDHP).

Answer

Anyone with any health insurance plan.

Answer

Only individuals over the age of 65.

Answer

People receiving Medicaid benefits.

Question 2

What is the primary advantage of contributing to an HSA?

Accepted Answer

Contributions, earnings, and withdrawals for medical expenses are tax-free.

Answer

It offers better interest rates than a savings account.

Answer

There is no limit on contributions.

Answer

Funds must be used within the same year they are contributed.

Question 3

What happens to unused HSA funds at the end of the year?

Accepted Answer

They roll over to the next year and continue growing tax-free.

Answer

They expire and are forfeited.

Answer

They must be withdrawn and taxed.

Answer

They can only be used for non-medical expenses.

Question 4

Which of the following expenses is NOT eligible for HSA reimbursement?

Accepted Answer

Over-the-counter dietary supplements.

Answer

Prescription medications.

Answer

Doctor's visit co-pays.

Answer

Eyeglasses and contact lenses.

Question 5

What happens if HSA funds are used for non-qualified expenses before age 65?

Accepted Answer

They are subject to a 20% penalty and income tax.

Answer

They are only taxed as ordinary income.

Answer

They are subject to a 50% penalty.

Answer

There is no penalty for early withdrawals.

Question 6

Can HSA funds be used to pay for health insurance premiums?

Accepted Answer

No, HSA funds cannot be used for insurance premiums, except in specific cases.

Answer

Yes, for any type of health insurance plan.

Answer

Yes, but only for employer-sponsored plans.

Answer

Only if the premium is less than 10% of income.