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Health Savings Account

More and more individuals are trying to find additional options to help supplement the cost of their high-deductible health insurance plans. One of the best options currently available is a Health Savings Account or HSA.   

• Contact your local branch to find out more about opening an HSA

WHAT IS AN HSA?

HSAs are a relatively new program (they officially were signed into law in Dec. of 2003). These accounts allow you to put money into a savings account to help pay for future medical expenses. They offer distinct advantages such as favorable tax treatment, flexibility, security and portability.

WHO CAN HAVE A HSA?

Any adult can contribute to an HSA if they:

• Have coverage under an HSA-qualified "high deductible health plan" (HDHP)

• Have no other first-dollar medical coverage (other types of insurance like specific insurance or accident, disability, vision, dental, vision care or long-term insurance are permitted).

• Are not enrolled in Medicare

• Cannot be claimed as a dependent on someone else's tax return

WHO CAN CONTRIBUTE TO AN HSA?

Qualified contributions can be made by you or your employer (or both). However, total contributions are limited annually. If you make a contribution, you can deduct the contribution (even if you do not itemize deductions) when completing your federal income tax return.

Contributions must stop once you are enrolled in Medicare. However you can keep the money in your account and use it to pay for medical expenses, tax-free.

WHAT ARE THE ADVANTAGES OF AN HSA?

Besides helping to off-set high-deductible Health Insurance plans, HSAs provide a variety of advantages, including:

• Security - Your high deductible insurance and HSA protect you against high or unexpected medical expenses.

• Affordability - You may be able to lower your health insurance premiums by switching to health insurance coverage with a higher deductible.

• Flexibility - You can use funds in your account to pay for current medical expenses (including expenses your insurance may not cover), or save the money in the your account for future needs like long-term care expenses and insurance, out-of-pocket expenses when covered by Medicare or medical expenses after retirement (before Medicare).

• Savings - You can save money in your account for future medical expenses and grow it with your investment earnings.

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