Health Savings Accounts
Health Savings Accounts (HSAs) are special savings accounts, with many tax benefits, that are designated for health expenses. A qualified High Deductible Health Plan (HDHP) is required to go along with an HSA, which covers major medical expenses. However, HDHPs are generally cheaper, so the money saved on premiums, can be deposited into the HSA.
They allow you to contribute pre-tax dollars into an account that the interest grows tax free and withdrawals are tax free when used for qualified medical expenses.
Eligibility
To qualify for an HSA, one must:
- Be under 65 years of age
- Have a qualified High Deductible Health Plan (HDHP)
- Not be covered by other health insurance plans, including Medicare
- Not be claimed as a dependant on someone else's tax return
Benefits
- Allows you to save for future health expenses
- Not a "use it or lose it" deal, like an FSA
- Consumer driven: you have more flexibility about how much to invest, where to invest and what to spend it on
How to Enroll
First, you must get a High Deductible Health Plan. Then open the HAS through a local back or credit union. Add money as you wish, there is no minimum amount. The account holder can decide to invest them money, if they do, the money may be invested in CDs, mutual funds, stocks and/or bonds.
Max Contributions
As of 2007, the max contributions are:
- $2,850 for singles
- $5,650 for families
- catch-ups are allowed for those 55 years and older
Eligible Expenses
Eligible expenses include but are not limited to:
- Health: everything under the deductible
- Vision: contact lenses, eye glasses, eye surgery
- Dental: dental x-rays, dentures, oral surgery
- Other: hearing aids and batteries, special school costs for handicapped, guide dog, convalescent home, much more
Today there are 8 different HSA qualified plans available and we will steer you to the best plan for you, at no cost to you.