Your health shouldn’t take a backseat to life’s other expenses — set aside money specifically for medical costs. An HSA is a federally approved, tax-exempt savings account designed for individuals and families with a qualified high-deductible health care plan. HSAs feature competitive interest and no “use it or lose it” policy, so your money stays with you throughout your life.
You can use the funds in your account to pay for current medical expenses, including expenses that your insurance may not cover; or you can save the money in your account for future needs, such as:
You can save the money in your account for future medical expenses and grow your account through investment earnings.
You make all the decisions about:
Accounts are completely portable, meaning you can keep your HSA even if you:
Funds remain in the account from year to year, just like an IRA. There are no "use it or lose it" rules for HSAs.
An HSA provides you triple tax savings*:
*Consult a tax advisor.
Who Can Have an HSA?
Any adult can contribute to an HSA if he/she:
Contributions to your HSA can be made by you, a family member, or your employer. However, the total contributions are limited annually. If you make a contribution, you can deduct the contribution (even if you do not itemize deductions) when completing your federal income tax return. Contributions to the account must stop once you are enrolled in Medicare. However, you can keep the money in your account and use it to pay for medical expenses tax-free.
High Deductible Health Plans (HDHPs)
You must have coverage under an HSA-qualified "high deductible health plan" (HDHP) to open and contribute to an HSA. HDHPs have a higher annual deductible than traditional health plans. Any company that sells health insurance coverage typically offers HDHP policies.
HSA Contribution Rules
The total amount you or your employer may contribute to an HSA for any taxable year is dependent upon whether you have individual or family coverage under a high deductible health plan. HDHP policies and contribution limitations are revised each year to reflect cost-of-living increases.
In addition to the standard HSA contribution limits, if you have reached age 55 before the close of a taxable year, you may also contribute an additional amount known as a "catch-up" contribution.