A Health Savings Account (HSA) is a tax-advantaged account designed to help you save and pay for qualified medical expenses. If you’re enrolled in an eligible health plan, such as a High Deductible Health Plan (HDHP) or Bronze or Catastrophic plan offered on a state insurance exchange under the Affordable Care Act, an HSA offers a convenient way to set aside funds for healthcare costs, both planned and unexpected.
Contributions, earnings, and withdrawals for qualified expenses are all tax-free, making an HSA a practical tool for managing your healthcare budget. Accountholders and family members can conveniently access HSA funds by writing checks or using a dedicated debit card.
For more information or to open an HSA, please contact us or visit your local MVSB branch.
Health Savings Account Benefits:
Tax Savings
An HSA may provide triple tax savings:
- Tax deductions when you contribute to your account
- Tax-free earnings; and,
- Tax-free withdrawals for qualified medical expenses
Ownership
Funds remain in the account from year to year, just like an IRA. There are no “use it or lose it” rules for HSAs.
Portability
Accounts are completely portable, meaning you can keep your HSA even if you:
- Change jobs
- Change your medical coverage
- Become unemployed
- Move to another state
- Change your marital status
Control
You make the decisions about:
- How much money to put into the account
- Whether to save the account for future expenses or pay current medical expenses
- Which medical expenses to pay from the account
- Which company will hold the account
- Whether to invest any of the money in the account
- Which investments to make
Savings
You can save the money in your account for future medical expenses and grow your account through investment earnings. Plus once you turn 65, you can use your HSA for all expenses – not just “qualified medical expenses”.
Flexibility
You can use the funds in your account to pay for current medical expenses, including expenses that your insurance may not cover, or save the money in your account for future needs, such as:
- Health insurance or medical expenses if unemployed
- Medical expenses after retirement (before Medicare)
- Out-of-pocket expenses when covered by Medicare
- Long-term care expenses and insurance
Security
Pairing an eligible medical plan with a Health Savings Account (HSA) can help you stay better equipped to manage both expected and unexpected medical expenses.
To determine if your health plan is eligible for a Health Savings Account, please contact your provider.
Consult your tax advisor for more information on how these benefits may apply to you.
For more information:
The IRS and US Department of the Treasury offer up to date information about HSAs on their websites.
