Health Savings Accounts
A Health Savings Account (HSA) plans can lower your premium, reduce your income taxes, and allow you to save money for future medical expenses tax-free. For these reasons, HSA plans have become the most popular plans we offer.
Here's why they have become so popular:
- An HSA offers Lower Premiums - Because Health Savings Accounts are paired with a high deductible health insurance plan, the premium savings for an HSA can be up to 50% or more compared to a typical low deductible health insurance plan.
- Tax-Deductible Contributions - Contributions to an HSA are tax-deductible. Annual contribution maximum limits in 2016 were $3,350 for individuals and $6,750 for families. For 2017, individual contribution limit increased to $3,450 while family contributions remains the same.
IMPORTANT: You must have your HSA-qualified health insurance in place before December 1 in order to qualify for a tax break during the following April's tax season.
- Pre-tax medical expenses - Withdrawals are tax-free and penalty-free when made for HSA qualified expenses, including your deductible, birth control pills, contact lenses and eyeglasses, chiropractors, dental treatment, fertility treatment, vasectomies, and even travel expenses incurred while seeking medical care.
- Tax-deferred growth - Unused funds grow in your account tax-deferred, and can be withdrawn penalty-free at age 65. There are a variety of investment options, including savings accounts, money market accounts, or a wide selection of mutual funds.
For more information on how HSA plans work, see our brief "How To" Guide to HSAs.