Health Savings Accounts (HSA) are becoming more and more popular. They offer us the opportunity to save for medical expenses while also offering tax incentives.
HSA accounts are available to adults who:
- Have coverage under a health savings account-qualified “high deductible healthplan” (HDHP)
- Have no other first-dollar medical coverage (other types of insurance like specific injury insurance or accident, disability, dental, vision or long-term care insurance are permitted)
- Are not enrolled in Medicare
- Can not be claimed as a dependent on someone else’s tax return
Besides offering tax benefits, health savings accounts also offer their owners security, affordability, flexibility and savings. Other highlights of HSAs include:
- Protection against high or unexpected medical bills
- HSA owners should be able to lower health insurance premiums by switching to a higher deductible.
- HSA funds can be used to pay current medical costs, including expenses not covered by insurance.
- Funds in the HSA account can grow through investment earnings.
- Changes in your life such as marriage, job change and relocation do not affect the account.
- The account moves with you! Funds remain in the account from year to year until needed.
Tax benefits include: tax deductions when you contribute to your account; tax-free earnings through investment; and tax-free withdrawals for qualified medical expenses
The minimum to open an account is $25.
Health Savings Accounts are a great way to plan for life’s unexpected medical emergencies. Contact your local branch to open your own personal HSA. Business owners who would like additional information on how health savings accounts may benefit them and their employees, please click here for more info.
Notice: A $2 fee will be incurred if your HSA balance falls below $2,000. This change becomes effective Jan. 1, 2016.
To learn more about Health Savings Accounts see the below resources.