South Carolina Life and Health Practice Exam

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make?

1. The amount contributed by the employer

2. The amount of annual contributions

3. The choice of investment options

4. The timing of distributions

The correct answer is: The amount contributed by the employer

A Health Savings Account (HSA) offers account holders a range of decisions regarding their savings and investment strategies, aimed at managing healthcare costs. However, when it comes to the amount contributed by the employer, this decision typically lies outside the control of the HSA owner. An employer may choose to contribute a fixed amount or a percentage of the employee's salary to the HSA, and while the account holder can influence their own contribution (by electing to contribute pre-tax dollars), they have no say in how much the employer decides to contribute. This level of control is usually dictated by the employer's benefits policy and the employer's financial decisions regarding healthcare contributions. In contrast, the account holder has full control over their annual contributions, can select from various investment options provided by the HSA, and can determine when to take distributions from the account for qualified medical expenses. These factors underscore the limitations of owner discretion regarding employer contributions while highlighting the broader autonomy in managing other aspects of the account.