Health Savings Account
Why use a Health Savings Account?
Health Savings Accounts (HSAs) provide eligible individuals with a tax-deductible means to save and pay for qualified out-of-pocket medical expenses. In particular, they are often used with High Deductible Health Plans (HDHP) that may not cover the first several thousand dollars of health care expenses.
Funds within the HSA grow tax-free until withdrawn and are not taxed as long as they are used for qualified health care expenses. Distributions that are not used for qualified expenses are subject to regular income tax and a 20% penalty.
If you have a high deductible health plan, consider opening an HSA to provide more flexibility and control over health care costs.
You Must Be Eligible to Open an HSA
If you have a high deductible health insurance plan, speak with your employer or insurance provider to see if your plan qualifies.