The purpose of a Health Savings Account (HSA) is to help eligible individuals with a High Deductible health insurance plan save for qualified medical expenses on a tax advantaged basis.
- To be eligible you can not be enrolled in Medicare and not claimed as a dependent on another individual’s federal income tax return
- Annual contribution limits determined by federal government and deadline for contributing annually is by tax filing date of the next year
- Contributions to the account can be made by you, your employer, or both
- Funds remain in the account from year to year. No “use it or lose it” rules.
- Tax savings for contributions to account, tax free earnings, and tax free distributions for qualified medical expenses
More information about HSA’s can be found at http://www.treas.gov/offices/public-affairs/hsa.