What is an HSA?
A health savings account (HSA) is a savings vehicle that works in conjunction with a high-deductible health plan (HDHP) insurance policy. An HSA allows you to contribute and withdraw money tax-free at the federal level (state taxes vary) for qualified medical expenses, or grow the account to use for qualified medical expenses in the future.
An HSA is a ‘Health Savings Account’ which is a tax sheltered account used to pay medical expenses now and in the future. In order to open this account you must have an HSA compatible health insurance plan. These plans are regulated by the state and federal government and must have minimum and maximum deductible amounts.
Health Savings Accounts (HSAs) were created by Public Law 108-173, the “Medicare Prescription Drug, Improvement and Modernization Act of 2003,” signed into law by President Bush on December 8, 2003. Health Savings Accounts change the way millions meet their health care needs because they are designed to help individuals save for qualified medical and retiree health expenses on a tax-advantaged basis. Any adult who is covered by a high-deductible health plan (and has no other first-dollar coverage) may establish an HSA. Tax-advantaged contributions can be made in three ways: • The individual or family can make tax deductible contributions to the HSA even if they do not itemize deductions; • The individuals employer can make contributions that are not taxed to either the employer or the employee; and, • Employers sponsoring cafeteria plans can allow employees to contribute untaxed salary through salary reduction. To encourage saving for health expenses after retirement, individuals age 5
A Health Savings Account (HSA) is a tax-advantaged spending and savings account that can be used to pay qualified medical expenses. (It is sometimes anecdotally referred to as a medical 401k.) It takes two components to create an HSA-based health coverage plan: • An HSA-eligible health plan • Health Savings Account (HSA) The HSA-eligible health plan is the insurance component. It provides medical coverage for you and your family in case of emergency, major illness, or high annual health care costs. It has a deductible that is higher than in a traditional insurance plan, but HSA-eligible plans feature significantly lower premiums. The HSA is funded by pre-tax contributions from you, your employer or both. In 2008, the maximum set by the IRS for an individual is $2,900 and the maximum contribution for family coverage is $5,800. In 2009 the maximum set by the IRS for an individual is $3,000 and the maximum contribution for family coverage is $5,950.You can save this much even if your heal
Hey, that’s just the question we were hoping for! In fact, “What’s an HSA?” is our favorite question—and this whole site is devoted to answering it in a way that is easy to read and understand. At least that’s what we’re shooting for. But first—we’ll cover the basics. HSA stands for “Health Savings Account,” and it’s an easy (and smart!) tool for consumers like you to use to save money for the healthcare expenses of you and your family. If you’ve got 3 minutes and 34 seconds to spare and want a quick primer on Health Savings Accounts, check out the video below and you will be on your way. When you are done please read on and we will de-mystify this whole HSA thing for you. You’re probably (A) still scratching your head, and/or (B) thinking, “So an HSA is like insurance.” Close, but not exactly. HSAs aren’t technically insurance—an HSA is a tool that you use along with an insurance plan. Like an iPod is to your music collection. Or a pair of $200 sneakers to your already-impressive “ski
