Arthur's employer establishes Health Savings Accounts HSAs) for its employees. Arthur pays $2,100 into his HSA. During the year, the HSA earns $90 interest and Arthur receives $1,850 from the MSA for reimbursement of medical expenses. I. Arthur must include $90 in gross income from the HSA arrangement. II. Arthur loses the $250 in contributions that are not spent on medical expenses in the current year.

Question

Quizplus · Accepted Answer

Interest earned in an HSA is not included in gross income, and unspent contributions roll over to the next year.

Arthur's Employer Establishes Health Savings Accounts HSAs) for Its Employees