Health Savings Accounts
A Health Savings Account is a tax-exempt account held by an individual, established exclusively for the purpose of paying for qualified health related expenses.
What Expenses Does a Health Savings Account Cover?
- Qualified medical expenses
- Qualified preventive care
- Qualified long-term care insurance
- COBRA continuation
- Health insurance in effect while receiving unemployment compensation under any federal or state law
- Any health insurance other than a Medicare Supplemental policy if you are age 65 or older.
Who Qualifies for a Health Savings Account?Individuals currently enrolled in a qualified high deductible health plan (HDHP) can open a HSA Account. A qualified high deductible health plan (HDHP) for 2020 is defined as one in which the minimum deductible amount must be no less than $1,400 for an individual or $2,800 for a family.*
- The maximum allowable annual contribution is $3,550 for an individual
- The maximum allowable annual contribution is $7,100 for a family
- If 55 or older, the maximum allowable contribution is $4,550 for an individual
- If 55 or older, the maximum allowable contribution is $8,100 for a family
In addition to having a HDHP to qualify for a HSA, the individual must not be:
- Covered under another health plan
- Entitled to Medicare benefits
- Claimed as a dependent on someone else’s tax return
Individual Benefits of Health Savings Account:
- A Health Savings Account offers a flexible and long-term investment opportunity
- HSAs rollover from year to year
- Funds in the HSA belong to the individual and stay with the individual regardless of employment changes
- Funds can be used for non-medical expenses if you are age 65 or older
- Funds grow without being subject to taxes until they are used for non-eligible medical expenses.**
- Funds are completely tax-free when used for eligible medical expenses.
- Contributions can be deducted from your gross income for tax purposes**.