An HSA is an account used exclusively for medical expenses now and in the future. An HSA plan is a term often used to describe a high-deductible health plan. This type of health insurance covers you and your family in case of catastrophic events. The account allows you to save for medical expenses. Both you and your employer are allowed to make contributions to the account up to the annual maximum allowed by the IRS.
- Individual plan contributions cannot exceed $3,350 per year
- Family plan contributions cannot exceed $6,650 per year
- Catch-up contributions for those 55+ cannot exceed $1,000
The big advantage of an HSA is that you own and control your health spending account. No matter where you go or where you work.
It works just like any bank account. You will receive a debit card that will deduct funds from your account when you pay for medical expenses such as a doctor’s visit, a prescription, etc. A list of these eligible uses will accompany your card.
An HSA helps you to:
These expenses are pre-taxed leaving you with more spendable income
The convenient debit card helps you to easily keep track of your health expenditures
Plan for the future
After age 65, you can use your HSA funds as you wish, not just on health care
Once you build your account, even just a little, you know you have an emergency fund for health issues that may occur
Participation in an HSA is money and health smart. Talk to your benefits manager to see when you can enroll if you are not currently participating. Some companies even offer wellness activities that result in monetary contributions to your account. If you have questions about how your specific HSA works, speak with the insurance administrator at your company.