HSA Quiz

HSA Awareness Day (Oct. 15) was started in 2019 to raise awareness about the benefits of health savings accounts (HSAs). HSAs are tax-free savings accounts that can help employees save for current and future health care expenses.

Take this quiz to learn more about the benefits of HSAs and how they work.

1. Who can contribute to an HSA?

A. Only the employee

B. Only the employer

C. Both the employee and the employer

D. Neither the employee nor the employer

2. What type of health plan must an employee have to qualify for an HSA?

A. A standard preferred provider organization (PPO) plan

B. A high-deductible health plan (HDHP)

C. A flexible spending account (FSA)

D. A catastrophic health plan

3. Which of the following items are HSA funds allowed to cover?

A. Ambulance services

B. Hearing aids

C. Acupuncture

D. All of the above

4. What are the tax benefits associated with HSAs?

A. Contributions are tax-deductible

B. Growth is tax-free

C. Withdrawals for qualified expenses are tax-free

D. All of the above

5. What happens to an HSA when an employee changes jobs?

A. The HSA is closed, and the funds are lost

B. The HSA remains under employee control

C. The funds are automatically transferred to a flexible spending account (FSA)

D. The funds are taxed and withdrawn

6. What happens to an employee’s HSA after they retire?

A. The employee keeps all HSA funds indefinitely

B. Their funds are forfeited

C. The funds are only partially portable based on years of service

D. The funds can only be used for employer-sponsored plans

7. Can HSA funds be invested to grow over time, similar to a retirement account?

A. Yes

B. No

8. What happens if someone withdraws HSA funds for nonqualified medical expenses before age 65?

A. The funds are forfeited

B. There’s a 20% penalty and taxes are applied

C. There’s no penalty, but the funds are taxed

D. The funds roll over to the next year

9. How can you encourage your employees to use HSAs effectively?

A. Provide HSA-related education and resources

B. Offer employer contributions to HSAs

C. Promote investing HSA funds for long-term growth

D. All of the above

10. Which of the following expenses is not eligible for HSA funds?

A. Weight loss programs

B. X-rays

C. Eyeglasses

D. Physical therapy

11. What happens to HSA funds when they’re used for nonmedical expenses after age 65?

A. There’s no penalty, but withdrawals are taxed as income

B. A 20% penalty applies

C. The funds are forfeited

D. The funds can only be used for medical bills

12. How can an employee access their HSA funds? (Select all that apply.)

A. The employee pays for eligible medical expenses out of pocket, and submits receipts for reimbursement

B. The employee uses an HSA debit card to pay for eligible medical expenses

C. The employer pays the eligible medical expenses directly

D. The employee purchases health-related items through the insurance provider

13. What is one way HSAs differ from FSAs?

A. HSAs require employer oversight

B. FSAs have strict use-it-or-lose-it rules, while HSAs don’t

C. HSAs apply only to employees under 30

D. FSAs have higher contribution limits than HSAs

How did you fare? Check your answers against the answer key below.

Answer key

Answer: C. Both the employee and employer. When you contribute to an employee’s HSA, your contributions and theirs are tax-free.
Answer: B. A high-deductible health plan (HDHP). While HDHPs come with higher deductibles, they have much lower monthly premiums. This makes an HDHP paired with an HSA attractive to employers and employees.
Answer: D. All of the above. HSA funds can also be used for:

Addiction counseling
Braille books and magazines
Breast pumps and supplies
Chiropractic services
Durable medical equipment
Fertility enhancements
Guide dogs and other service animals
Home care
Hospital services
Lab fees
Long-term care
Midwifery
Nursing services
Oxygen
Physical therapy
Psychiatric care
Psychotherapy
Prescription drugs
Speech therapy
Sterilization
Surgery
Transplants
Wigs
X-rays

Answer: D. All of the above. HSAs are triple tax-advantaged.
Answer: B. The HSA remains under employee control. When an employee leaves your organization, they typically take their HSA with them. Employees can transfer HSA funds to a new employer or a financial institution.
Answer: A. The employee keeps all HSA funds indefinitely. The HSA belongs to the employee, not the plan sponsor.
Answer: A. Yes. Once an employee’s HSA reaches a minimum account balance, they can invest their funds. Depending on the HSA administrator, they can choose from different investment options, like stocks, bonds or mutual funds. Some HSAs provide guided investment options, while others allow employees to direct their investments.
Answer: B. There’s a 20% penalty and taxes are applied. HSA distributions are meant to fund qualified medical expenses. Outside of that, taxes apply.
Answer: D. All of the above. Your employees might think of HSAs as a way to reduce their out-of-pocket health care costs, but they might not know they can use their HSAs to save for future medical expenses and grow their retirement savings. By contributing to employees’ HSAs and highlighting the benefits of HSAs, you can get the most out of your investment and help your employees get the most out of theirs.
Answer: A. Weight loss programs. Other expenses that are generally not eligible for HSA funds include:
- Aromatherapy
- Babysitting and child care
- Cosmetic surgery
- Diaper services
- Funeral expenses
- Hair transplants
- Health club dues (without a letter of medical necessity)
- Health insurance premiums
- Massage (unless a prescription is presented)
- Nutritional supplements
- Personal use items
- Teeth whitening
Answer: A. There’s no penalty, but withdrawals are taxed as income. The 20% penalty only applies if the HSA funds are used for nonmedical expenses before age 65.
Answer: A and B. Depending on the HSA administrator, an employee can either get reimbursed for qualified medical expenses or use an HSA debit card to pay for them directly.
Answer: B. FSAs have strict use-it-or-lose-it rules, while HSAs don’t. HSAs and FSAs are both tax-advantaged accounts that can help employees save for medical expenses. But they differ with respect to eligibility, contribution limits and how the funds can be used.