What is a Health Saving Account?
A Health Savings Account (HSA) is a savings account that provides you with a tax-free way to save and budget for healthcare expenses. As long you are enrolled in an IRS-qualified High Deductible Health Plan (HDHP), you can make tax-free contributions into the HSA. As long as you use the funds for qualified healthcare expenses, you do not pay any taxes on the withdrawals from an HSA. The HSA is also similar to an IRA or 401K in the fact that you have the ability to invest the funds. Most HSAs pay interest and offer investment options so you can watch your money work for you.
Why would I want an HSA?
An HSA is a great way to set aside tax-free1 money to pay for your individual, or your family’s healthcare expenses. Because you have a high deductible health plan, you pay at least $1,100 (minimum 2007 HDHP deductible) out of your pocket before your health plan begins to pay for expenses. You may deposit after tax monies directly into the HSA and take the deduction on your tax return. Additional features and advantages of the HSA include:
- Reduces your taxable income. You pay no federal or state tax (rules vary from state to state) on the money you contribute into your HSA.
- You control the money. You decide how to invest the funds.
- Your money grows tax-free. Money you put into an HSA can earn interest and capital gains without paying federal and state income tax (rules vary from state to state).
- You can save the money for future needs. Even if you don’t utilize any healthcare services now, your HSA funds will be there if you need them in the future – even after retirement.
- It’s easy to use the funds. Our banking partners give you a debit card that lets you take money out of your HSA for medical expenses without the hassle of claims forms.
How do I get an HSA?
HumanaOne has partnered with the banks listed below for providing HSAs to its customers. We feel that they provide an excellent HSA solution. The quick comparison of fees, interest rates and investment options will assist you in selecting the best custodian for your account. Just click on the logo to sign-up for an HSA and/or learn more about the custodian.
1Alabama, California, New Jersey, and Wisconsin do not allow tax deductions for HSA contributions. Contact your local tax advisor for details or visit www.irs.gov.