To Help You Control Your Health Care Costs
A Health Savings Account (HSA) allows you to save money for your health care expenses. Your HSA contributions are tax-deductible, and the earnings on your account accumulate on a tax-deferred basis. Best of all, distributions (payments) from your HSA are tax-free if they are used for qualified medical expenses.
Opening Your HSA
To open a Health Savings Account (HSA), you must be enrolled in a high-deductible health plan. Your insurance provider can verify whether you have a high-deductible plan. The contributions and plan deductible limits of individual companies change frequently, so consult your tax professional regarding your individual circumstances.
Contributing To Your HSA
You must enroll in a high-deductible health plan before you can make HSA contributions. The maximum annual HSA contribution is the deductible under your high-deductible health plan. Your health plan provider can tell you what the amount is each year. Any contributions your employer makes to your HSA are tax-free, and you can deduct your own contributions to your HSA on your income tax return.
Account Balance Is Carried Over
Unlike contributions to a flexible spending account, the balance of your HSA at the end of the year is carried over to the next year. So you’re not placed in a position of having to “use it or lose it” each year.
Why Should I Have An HSA If I Already Have Health Coverage?
The high-deductible health plan provides you with protection from catastrophic medical costs, and the HSA provides you with a source of funds to pay some or all of the costs not covered by the health plan.
Control & Flexibility
An HSA enables you to take control of your health care decisions. And since you are the owner of your HSA, it doesn’t matter what your job status is or whether your employer makes contributions to your plan. Your HSA will always follow you.