Health Savings Account
What is a Health Savings Account (“HSA”)?
Commonly known as an "HSA", a Health Savings Account is a tax-exempt custodial account established for the purpose of paying or reimbursing qualified medical expenses for you, your dependents or your spouse. Think of it as a medical IRA!
Just like a regular bank account, the unused money in your HSA rolls over from year to year so you can build your savings to cover future medical expenses - you'll never lose unspent money. And since your HSA belongs entirely to you, it moves with you if you should change jobs.
|Contributions made by:||Employee, other individuals and/or employer|
|Tax benefits:||Pretax contributions; tax-free withdrawals for qualified expenses; tax-deferred earnings|
|Contribution limit:||Yes, $3,300 individual or $6,550 family (2014)|
|Withdrawals for non
|Allowed, but taxed 20% effective 2011|
|Claim receipts must be submitted:||No - but employee should keep receipts in case of IRS audit|
|Unused balance:||Money is carried forward and accumulates|
|If employee leaves the company:||Money stays with the employee|