HEALTH SAVINGS ACCOUNTS (HSA)
A Health Savings Account (HSA) is like a 401(k) for healthcare. It is a tax-advantaged personal savings or investment account that individuals can use to save and pay for qualified healthcare expenses, now or in the future. Paired with a qualified high deductible health plan (HDHP), an HSA is a powerful financial tool that empowers consumers to be more actively involved in their healthcare decisions.
However, unlike other financial savings vehicles (Roth IRA, Traditional IRA, 401K, etc.), an HSA has the unique potential to offer triple tax savings through:
-Pre-tax or tax-deductible contributions to the HSA
-Tax-free interest or investment earnings
-Tax-free distributions, when used for qualified medical expenses
Contributions can be made by the employer, the employee/individual, or both. Tax-free withdrawals can be made to pay for qualified healthcare expenses incurred by the account holder, spouse, children and other dependents.
HSAs are also portable, which means that individuals keep their HSAs, if changing jobs or becoming unemployed. Also, since the account is owned by the individual, there is no “use-it-or-lose-it” provision, like with a Flexible Spending Account (FSA). Instead, unused contributions roll over each year, with interest and/or investment earnings compounding on a tax-free basis, like an IRA or 401(k). HSAs offer the potential for long-term, tax-free savings that can be used for future healthcare expenses, such as Medicare premiums and certain long-term care expenses and insurance
Below you will find some very useful information on Health Savings Accounts (HSA’s).
Medical and Dental Expenses – Department of the Treasury (IRS)
Frequently Asked Questions
For more information on HSA’s, or to create an account, please visit the following websites:
To Apply Online with John Bradbury as your agent