How does an HSA work?
ANSWER:
Legislation establishing Health Savings Accounts (or "HSAs") took effect on January 1, 2004. HSAs and HSA-eligible health insurance plans are becoming more and more popular. Here are the basics:
- An HSA is a tax-favored savings account that may be used in conjunction with an HSA-eligible high deductible health insurance plan to pay for qualifying medical expenses.
- Choosing an HSA-eligible health insurance plan may help you save money. Typically, the monthly premium on an HSA-eligible high deductible plan is less expensive than the monthly premium for a lower-deductible health insurance plan.
- Contributions to an HSA may be made pre-tax, up to certain annual limits.
- Funds in the HSA may be invested at your discretion. Unused funds remain in the account and accrue interest year-to-year, tax-free.
Health
Saturday, Nov 23rd 2024
Health Savings Accounts
You can use this account to pay for your qualified health expenses, including expenses that the plan ordinarily doesn’t cover, such as eyeglasses and hearing aids.
Expenses paid out of the HSA that are eligible expenses under your high-deductible health plan will count toward the plan’s deductible.
