Individual Health Savings Accounts
Health Savings Accounts – Tax-Free Savings for Health Care Expenses
As health care costs continue to increase, many people are looking for ways to plan ahead for future health care costs. Recent federal regulations have created a tax-free health savings account (HSA) to help you set aside money for your future health care expenses.
To take advantage of the tax savings offered by an HSA, you must have a high-deductible health plan that meets the federal guidelines. Most typical individual health plans offered today do not qualify. We will work with you to find an individual health insurance plan to specifically meet HSA regulations.
Advantages of an HSA
- Save Money and Reduce your Taxable Income – Save for your health care expenses. No penalties or taxes apply to withdrawals made to pay for eligible health care expenses. Deduct your HSA contributions from your gross income on your tax return.
- Put Your Money To Work – Just like an individual retirement account (IRA), the money you contribute earns interest. You also have investment options to increase your potential earnings and grow your account. And, best of all, your earnings are tax-free.
- Supplement Your Health Plan – Expenses not covered by your health plan can qualify as eligible expenses for your HSA. * Examples:
- Covered expenses applied toward your health plan’s deductible and your coinsurance.
- Non-covered expenses such as contact lenses, dental expenses, long-term care insurance premiums, over-the-counter drugs, etc. (Health insurance premiums are generally not an eligible expense.)
- Additional Retirement Income – When you turn 65 you are not allowed to make additional contributions, but your HSA funds can still be used to pay for expenses not covered by Medicare, including insurance premiums (except for Medicare supplement plans). You can also withdraw funds for non-qualified expenses without penalty. (Such withdrawals are subject to income tax.)
- HSAs are Transferable to a Surviving Spouse – In the event of your death; your surviving spouse can begin using and contributing funds to your HSA. All you need to do is designate your spouse as the beneficiary.
To find out more about the advantages of an individual Health Savings Account (HSA), contact us.
* If you or any of your dependents are covered under another non-qualified health plan, your out-of-pocket expenses may not be eligible for reimbursement from your HSA.