HSA Resource Center
With healthcare costs consistently on the rise, it has become difficult for many Americans to afford major medical health insurance. Fortunenly, over the past 7 years a new type of major medical health insurance plan, known as an HSA High-deductible health plan, has emerged ono the market to help millions of people obtain health coverage.
A health savings account (HSA), is a medical savings account available to taxpayers in the United States who are enrolled in a High-Deductible Health Plan. The funds contributed to the account are not subject to federal income tax at the time of deposit. Unlike a flexible spending account (FSA), funds roll over and accumulate year to year if not spent. HSA funds may currently be used to pay for qualified medical expenses at any time without federal tax liability or penalty. Withdrawals for non-medical expenses are treated very similarly to those in an IRA in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier.
- High deductible HSA qualified health plans typically feature lower, more affordable, monthly premiums that can save you thousands of dollars a year.
- Contributions to your HSA are 100% tax deductibe.
- Interest on all of your account investment gains are also 100% tax free. The type of investments are your choice and range from no risk, lower interest bank rates to a wide range of stocks, bonds, & mutual funds. The level of risk is up to you.
- You can make 100% tax-free withdrawals from your HSA for any qualified medical expense. (Prescriptions, Dental Care, Vision, etc...)
- The Internal Revenue Service (IRS) rule says that at age 65 the money from your Health Savings Account can be withdrawn penalty-free for any reason, not just for qualified medical expenses. At that time you'll pay regular income tax if the money is used for non medical expenses (just like an IRA).
- Owning a HSA empowers the health care consumer. There is no ‘use it or lose it’ feature. The HSA owner spends the money (or doesn’t) on the qualified medical expenses they want to spend money on. The consumer selects the HSA trustee and HSA investment vehicle they want.
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