»  Funds Distribution

Distribution of HSA Funds

Distributions from an HSA are solely up to the employee (account holder). For the employee to receive complete tax breaks on the HSA funds the distributions must be for an eligible expense and must be for eligible expenses incurred after the date the HSA is established. The employee may use the funds for reimbursement outside of eligible expenses, but are subject to taxes and a 10% excise on the amount. Since the account is owned by the employee, the employer is not subject to any penalties or other taxes.

American Fidelity offers 3 options to make distributions easy for your employees:

• HSA debit card
• Request distribution via the web 24/7, and
• Through submission of the HSA Distribution Request Form that can be mailed or faxed