HSA Basics: Health Savings Accounts
Health Savings Accounts
A Health Savings Account (HSA) is an account that you can put money into to save for future medical expenses. There are certain advantages to putting money into these accounts, including favorable hsa tax treatment. HSAs were signed into law by President Bush on December 8, 2003.
Who Can Have an HSA
Any adult can contribute to an HSA if they:
- Have coverage under an HSA-qualified “high deductible health plan” (HDHP)
- Have no other first-dollar medical coverage (other types of insurance like specific injury insurance or accident, disability, dental care, vision care, or longterm care insurance are permitted).
- Are not enrolled in Medicare.
- Cannot be claimed as a dependent on someone else’s tax return.
Contributions to your HSA can be made by you, your employer, or both. However, your total hsa contribution limits are limited annually. If you make a contribution, you can deduct the contributions (even if you do not itemize deductions) when completing your federal income tax return.
Contributions to the account must stop once you are enrolled in Medicare. However, you can keep the money in your account and use it pay for medical expenses tax-free.
Next: High Deductible Health Plans (HDHPs)
HSA Basics - Other Sections
What Happens to My HSA When I Die