UPDATE: Over the counter drugs can no longer be purchased with Arizona HSA funds, unless prescribed by a physician. The federal penalty for using Arizona HSA funds for things other than qualified medical expenses is now 20%, up from 10%.

A Few Arizona HSA Basics:

In 2003 the Medicare Prescription Drug Improvement and Modernization Act expanded the Arizona HSA health benefits available to consumers such as the self-employed and employer groups of any size by authorizing the use of health savings accounts known as “HSA”s. Designed to allow consumers more control over their health care expenses, these health savings accounts permit businesses and consumers to take advantage of high deductible health insurance plans with lower premiums. At Michael Higgins Insurance, we encourage our clients to seriously consider enrolling in a high deductible health plan and opening an Arizona HSA savings account at your bank of choice, it’s a smart way to lower your Arizona health insurance costs.

Arizona HSA

An Arizona HSA is a tax-exempt trust or custodial account to be used for paying qualified medical expenses. To open an HSA, you must enroll in a qualified Arizona HSA high-deductible health plan such as the BCBSAZ BluePortfolio Plan.

An Arizona HSA provides potential tax advantages for eligible individuals. Conveniently there are NO “use-it-or-lose-it” restrictions, so money in the Arizona HSA health savings account can be rolled over into the next year.

Who Is Eligible For an Arizona HSA?

Arizona HSA

Any individual who is covered under an Arizona HSA qualified high-deductible health plan, not entitled to benefits under Medicare, and not claimed as a dependent on another person’s tax return is generally eligible. Michael Higgins cautions that having other health coverage in addition to a qualified high-deductible health plan such as the Blue Cross and Blue Shield of Arizona BluePortfolio Arizona HSA plan may make you ineligible to contribute to an HSA.

How Do I Contribute to an Arizona HSA?

Qualified members with a high-deductible Arizona HSA health plan may have contributions added to their HSA by themselves as an individual or employee, by an employer, or by joint employer/employee funding. Contributions up to the annual maximum may be made as late as April 15th of the following tax year. Additional “catch-up” contributions to the Arizona HSA, as permitted by federal law, are allowed for individuals between the ages of 55 and 64.

Arizona HSA

Where to Open an Arizona HSA

Blue Cross® Blue Shield® of Arizona is contracted with HSABank, an FDIC-insured bank and qualified Arizona HSA trustee. Qualified members may open a health savings account with HSABank or choose another HSA administrator. Here are the links to open an account: The first link is for individuals and families, and the second is for employers and employees. HSABank was one of the first banks in the Arizona HSA business, and I have found them to be very reliable.

Arizona HSA for individuals and families.

Arizona HSA for employers and employees.

For more information about Arizona HSA Bank or to obtain paper enrollment forms instead of applying online, please call HSA Bank at (866) 471-5275, Monday thru Friday: 7 a.m. to 9 p.m. CST.

Michael Higgins Insurance provides only general information about Arizona HSA health savings accounts. Legal requirements are always subject to change. Michael Higgins Insurance does not render tax, investment or legal advice. Consulting with your tax or legal advisor should prevent any problems regarding satisfying certain eligibility criteria for an Arizona HSA account.