Learn About & Select A Health Plan
Funds in the account can be used to pay for qualified health care expenses including those applied to your health plan deductible. HSA funds may also be used to pay for other things such as copayments, coinsurance or other qualified medical expenses not covered by the health plan.
Health Savings Accounts work in concert with HDHPs and have a number of unique features including the following:
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You own the account. It is a personal savings account that earns tax-free interest.
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The account is funded by you or your employer. You may place pre-tax money into your account to meet your deductible. Your employer may also choose to fund a portion of the dollars.
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Contributions to the fund may now exceed the plan deductible. The maximum annual amount you are allowed to contribute in 2007 is $2,850 for self-only coverage and $5,650 for family coverage (subject to maximum amounts set by the IRS). The maximum contribution amounts for 2008 are projected to be $2,900 for self-only coverage and $5,800 for family coverage.
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There are tax benefits. When you deposit money into the account through payroll deduction, it is on a pre-tax basis providing you with greater earning and spending power. Employer contributions to the account are non-taxable for you.
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You can pay for a variety of medical expenses. You can use HSA funds to pay for qualified medical expenses including those applied to the health plan deductible as well as for over-the-counter drugs, eyeglasses, prescription drugs and other medical supplies.
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You can carryover your funds. Unused dollars can be saved and carried over year after year. In doing so, these dollars are invested and earn tax-deferred interest.
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You can take it with you. Because this is your own personal account, you can take the dollars you’ve earned with you when you change employers.
