Understanding Your HSA
Health Savings Account (HSA) – Understanding the Benefits
A Health Savings Account (HSA) is a personal bank account used to pay out-of-pocket medical expenses with pre-tax dollars. These accounts are offered alongside qualified, high-deductible healthcare plans and offer advantages including:
- Tax savings (pre-tax contributions, tax-free interest accumulation and funds withdrawals to pay for medical expenses)
- Reduced out-of-pocket costs (cover medial expenses and prescriptions; dollars used to help satisfy your plan’s deductible)
These accounts are long-term investments that stay with you. You keep the funds even if you leave your employer or retire. When you put money into your HSA, it will earn interest and grow over time. What’s more, you can save unused dollars year-to-year to cover future out-of-pocket health expenses.
There are eligibility requirements, including:
- Must be enrolled in an HSA-eligible Qualified high-deductible health plan
- Cannot be covered by a spouse’s health plan (unless as qualified HDHP), Flexible Spending Account (FSA), or Health Reimbursement Account (HRA) or be claimed as a dependent on a tax return
- Cannot be enrolled in Medicare, TRICARE, or TRICARE for Life
- Cannot have received Veterans Administration benefits in the past three months.
- Self-Only Coverage - $4,400
- Family Coverage - $8,750
- 55 & Older & not enrolled in Medicare can contribute an additional $1,000 as a catch-up contribution.