What is a Health Savings Account (HSA)?

An HSA is a tax-advantaged personal savings --and potentially investment -- account that can be used on qualified medical expenses any time in your life.

 
 

How it Works

 

Employer-Sponsored Plans: At the beginning of the enrollment period you choose how much money you want taken out of your paycheck and deposited into your account. At any time during the year, you can change your election and/or make additional deposits into your account.

Individual Plans: While you are covered by a HDHP, add funds to your HSA just like you would to any savings account.

Both Plans:  You spend the money on qualified medical expenses at any time in your life (unlike other tax-advantage plans that must be spent in the year the funds are deposited into the account).  If you elect to do so, you can also invest your funds.

Examples of Qualified Expenses

 

As long as you have a high-deductible health plan (HDHP), you can sign up for an HSA and spend the funds on:

  • copays
  • deductibles
  • dental costs
  • vision costs
  • certain medical supplies
  • for a full list, contact us today!
 

Tax Savings

The participant enjoys three tax-free benefits:

  1. Contributions are tax-free
  2. Eligible purchases are tax-free
  3. Any interest earned is tax-free

Employers do not pay FICA (Social Security + Medicare) taxes on the amounts contributed, which means 7.65% savings on the total contributions made by their employees each year.