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WHAT IS A HEALTH SAVINGS ACCOUNT?
WHO IS ELIGIBLE?
HOW MUCH CAN I CONTRIBUTE?
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1. TAX SAVINGS Federally Qualified HSA contributions can be deducted from your gross income on your federal tax return, even if you do not itemize deductions. Many states also allow the deduction from state income taxes.
2. TAX DEFERRED INTEREST & EARNINGS Funds left to accumulate in your HSA can grow with tax deferred interest and earnings.
3. REDUCED INSURANCE PREMIUMS Your insurance premiums are usually lowered by 20%-40% when you change from a low deductible to a high-deductible plan. You can use these savings to fund your HSA.
4. PORTABILITY Even if you change jobs, your HSA funds go with you. You own your account.
5. LONG-TERM SAVINGS You can choose to let the funds in your account grow tax-deferred. After age 65, you may make withdrawals from your HSA for any reason without a penalty.
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HSA's are an excellent way of paying for health care and saving money. They provide considerable tax savings while reducing healthcare costs. Patients are free to choose their own physicians, which gives them more flexibility. Health Savings Accounts can also be used to supplement income at retirement or in case of disability. HSA's provide many of the same great benefits as the MSA (Medical Savings Account), but without many of the restrictions that limited their availability and use.  |
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Copyright (c) 2005 - MyHealthSavingsAcct - All rights reserved |
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A Health Savings Account (HSA) is a tax-sheltered savings account similar to an IRA, but earmarked for medical expenses. Deposits are 100% tax-deductible and accumulate tax free to the account holder. They can be easily withdrawn by check or debit card to pay routine medical bills with tax-free dollars. 
More Information
You are eligible if your are covered under a High Deductible Health Plan (HDHP) and you have no other Health Insurance coverage, you are not eligible for Medicare coverage and you may not be claimed as a dependent on someone else's return.
Individuals, employees or employers can contribute to an HSA.
You may contribute up to $2,600 if you are single, or up to $5,150 with a family per year. There is an additional catch up contribution of $500 if you are age 55 or older in 2004.
Your High Deductible Health Insurance maximum out of pocket expenses cannot exceed $ 5,000 for an individual or $ 10,000 for a family.