Health Savings Account
Health Savings Accounts (HSAs) are a savings method available to qualified members to take control of their health care decisions. It allows you to have flexibility and control over your health care costs. When combined with a high deductible health plan, a HSA is an alternative to traditional health insurance. A HSA is a tax-advantaged savings product that offers a different way for members to pay for their health care. HSAs enable you to pay for current health expenses and save for future qualified medical and retiree health expenses on a tax-free basis.
You must be covered by a high deductible health plan (HDHP) to take advantage of HSAs. An HDHP generally costs less than traditional health care coverage and the money saved on insurance can be put into the HSA. As a HSA owner, you own and control the money in the HSA. Decisions on how you spend the money are made by you.
Benefits for a HSA:
- Protection: Members have an opportunity to save money to pay high or unexpected medical bills.
- Affordability: High health insurance policy deductibles mean lower premiums.
- Savings: Members have the ability to deduct their contributions and the tax deferral of account earnings enables them to build their account.
- Flexibility: Members can contribute at any time during the year, and the HSA balance rolls over from year to year.
- Portability: The member owns the account, so it goes where they go, regardless of any job changes.
You will be able to deduct your contributions to your HSA, and the account earnings will accumulate on a tax-deferred basis. Best of all, distributions from your HSA are tax-free if they are used for qualified medical expenses. Examples of qualified medical expenses. At age 65, distributions are tax-free whether they are used for medical expenses or not!