Health Savings Accounts - Q & A

What is an HSA?

A Health Savings Accounts (HSA) is a savings account created for the purpose of paying medical expenses.  An HSA works in conjunction with a high deductible medical insurance.  The HSA money can be used to help pay the medical insurance deductible and qualified medical expenses not covered by the medical insurance. 

Who can have an HSA?

The individual must be:
1)  Covered by high deductible medical insurance;
2)  Not covered under other health insurance; and
3)  Not entitled to Medicare.

Exceptions.  Other health insurance does not include coverage for the following:  accidents, dental care, disability, long-term care, and vision care.

What are the tax benefits?

There are three major tax advantages to your HSA.
1)  Cash contributions during a tax year to an HSA are deductible from your federal gross income.
2)  Interest earnings accumulate tax-deferred.
3)  Withdrawals from an HSA for "qualified medical expenses" are free from federal income tax.

What are the tax-deductible contribution limits?

Monthly contribution limits are based on:
1)  The medical insurance deductible amount;
2)  Whether you have single or family coverage under the high deductible medical insurance;and
3)  Medicare eligibility.  You may no longer contribute once you become entitled to Medicare.

The following are the anual maximum tax-deductible contributions for 2007:

Individual - $2,850
Family - $5,650

To obtain a quote on an HSA or to apply for an HSA click here for an instant quote.  Just look for the piggy bank next to all HSA eligible plans.

Disclaimer:  InsuranceForToday.com and InsuraceforToday, Inc.  do not provide tax advice, nor do any of its representatives.  Please consult your tax advisor before considering any tax-advantaged plans.