Frequently Asked Questions
With a HSA benefit plan you can enjoy quality, affordable health care coverage and the chance to take control of your future health care spending. Health Savings Accounts are special tax-exempt savings accounts dedicated to your health care expenses. As you contribute to the account, your money grows tax deferred. And as long as you use the account to pay for qualified medical expenses, your contributions are deducted from your gross income at tax time, saving you money.
How it Works
First, you purchase an HSA-qualifying medical insurance plan. That allows to you open the account itself at a local bank. The IRS annually reevaluates contributution limits for individuals and families on an HSA plan. For example, the limits for the 2010 tax year are $3,050 per individual or $6,150 per family. (Contribution limits are prorated for the number of months the plan is in force. Additional contributions may be allowed if you are over 55 years old. Please consult your tax advisor for specific tax information.)
For instance, you can use your HSA to:
- Pay your health plan deductible, coinsurance and other qualifying health care expenses.
- Invest in mutual funds or other options – with any interest or other earnings accumulating tax-free
- Or, let your account build up through savings account interest. Any unused funds in your Health Savings Account are yours to keep and will carry over from year-to-year.