Health Savings Account
Saving for your health today is investing in tomorrow.
A Health Savings Account (HSA) is a type of tax-exempt custodial account that helps people with qualified high-deductible health plans (HDHPs) save money for out-of-pocket medical expenses like doctor visits and prescriptions. Individuals can open an HSA on their own, through an employer or an eligible healthcare provider.
- You're covered under a high-deductible health plan (HDHP)
- You are not also covered by any other health plan that is not an HDHP. There are certain exceptions for plans that provide for
preventative care or other "permitted" coverage. Always check with your employer or health care provider for eligibility.
- You're not enrolled in Medicare
- You're not a dependent on another person's federal income tax return
HSA Federal Tax Benefits
Employer contributions to your HSA may be excluded from your gross income. You can deduct contributions made by anyone other than your employer, as long as they don’t exceed the maximum annual contribution amount. Contributions remain in your account until you use them. The interest or earnings grow tax free and the distributions for qualified medical expenses are also tax free. Your tax advisor or legal professional can provide guidance if you have questions.
Contributors to an HSA
Once you have determined that you meet the eligibility requirements for an HSA, you, your employer, your family members, and any other person may contribute to your HSA.
HSA contribution limits and deductible requirements
Contribution limits and deductible requirements are set by the Internal Revenue Service (IRS) each year. There is a limit on the 'out of pocket' expenses that can be incurred during the tax year. You can reference the IRS Website to check limits and requirements. For guidance, contact your tax advisor or legal professional.
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