HSA’s and Banks

A Health Savings Account (HSA) in conjunction with a high-deductible health plan is a relatively new way to lower your health care costs. It’s a tax-advantaged account that can be used to pay for day-to-day eligible medical expenses. An HSA is also an excellent way to save for future health expenditures with the added benefit that the money in your account continues to grow tax-free, year after year. A Health Savings Account is essentially an investment that gives you the flexibility to manage your health care expenditures for you and your family, while saving money on a tax-free basis.

Health Savings Accounts, HSAs, are designed to help individuals save for future qualified medical and retiree health expenses on a tax-advantaged basis. To participate in an HSA, you must be enrolled in a high-deductible health plan (HDHP). An HDHP is a comprehensive health plan with an annual deductible of at least $1,100 for an individual and $2,200 for a family. Several new rules apply to Health Savings Accounts for 2007. For details on these changes, see IRS Publication 969 at www.irs.gov.

The HSA account at your bank can offer triple tax savings. Tax deductible when you contribute to your account (tax-deferred if contributions are made by your employer). Tax-free earnings through investment. Tax-free withdrawals for qualified medical expenses.

Unlike a Flexible Spending Account (FSA) with an employer, you own the money in your HSA account regardless of changes in your employment or marital status. You can save the money in your account and let it accumulate from year to year, allowing your HSA to become part of your investment strategy. Earn more on balances $5,000 and over by investing in an HSA certificate of deposit. You have instant access to funds needed to cover qualified medical expenses when you make purchases via check or even a debit card.

This entry was posted on Sunday, October 12th, 2008 at 11:58 am and is filed under Banking and CD Guide. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.