A health savings account (HSA) is a tax-advantaged account created for those under high-deductible plans (HDHPs) to help save for qualified medical expenses. Contributions can be made into the account by your employer or yourself up to a specific limit each year. Over time these investments can be used to help pay for medical expenses such as medical, dental and vision care or prescription drugs. We can help you decide if an HSA is suitable for your needs.
How Does an HSA Work?
People with HDHPs can open HSAs, and the two are most often paired together. To qualify for an HSA, you must meet specific eligibility standards by the Internal Revenue Service (IRS). To meet eligibility standards, you must:
- Have a qualified HDHP
- Have no other health coverage
- Not be enrolled in Medicare
- Not be claimed as a dependent on someone’s tax return
Annual contribution limits will vary depending on if you as the individual are contributing or if you and an employer are contributing to the HSA. Any other person, such as a family member, can contribute to your HSA as long as eligibility requirements are met.
How to Start an HSA
Having an HSA is beneficial and a smart move because contributions of the account are tax deductible. If you have an HDHP and are considering an HSA, contact Terril, Lewis & Wilke Insurance Inc today, and we’ll help you get started.