A Health Savings Account (HSA) is a portable savings account that allows you to set aside money for health care tax-free.
You must have a high deductible health insurance plan to be able to take advantage of HSAs. The minimum deductible to qualify is $1100 for individuals and $2200 for families. High deductible health plans usually cost less than traditional health care insurance, so the money that you save on insurance can therefore be put into your Health Savings Account.
Money in an HSA rolls over from year to year (there is no “use it or lose it”). Your HSA is owned by you, not your employer, and you control the money in your HSA. You decide how to spend the money and what types of investments to make with the money in the account in order to make it grow. Many people compare an HSA to a “medical IRA”.
Contributions to HSAs by individuals are tax deductible, even if the taxpayer does not itemize. Contributions by an employer are not included in the individual's taxable income. Individuals, their employers, or both can contribute tax-deductible funds each year up to the amount of the policy's annual deductible, subject to a cap of $2,900 for individuals and $5,800 for families. In addition, individuals over age 55 can make extra contributions to their accounts of up to $900 and still enjoy the same tax advantages.
HSA funds can be used to cover the health insurance deductible and any co-payments for medical services, prescriptions, or products. In addition, HSA funds can be used to purchase over-the-counter drugs and long-term care insurance, and to pay health insurance premiums during any period of unemployment. The interest and investment earnings generated by the account are not taxable while in the HSA. Amounts distributed are not taxable as long as they are used to pay for qualified medical expenses.
- Affordable - High deductible health plans usually cost less than traditional health care insurance, so the money that you save on insurance can be put into your HSA
- Triple Tax Advantages - Pre-tax contributions to your HSA, tax-exempt interest, and tax-free withdrawals from your HSA for qualified medical expenses
- Unprecedented Control - You are now in control of how your healthcare dollars are used. Save or spend, it's your choice
- Portability - Your HSA is an account that you own and remains in place regardless of where you work or what insurance company you are insured by
- Flexibility - Your HSA contributions can be used to pay for a wide range of eligible medical expenses not typically covered by low deductible health insurance or other healthcare accounts
- Planning for the Future - HSA contributions can be directed toward an HSA Money Market or Certificate to maximize the future value of your HSA
HSA: Helping Control Healthcare Costs Brochure
Call your Credit Union representative at 800.477.6465, ext. 8560, 561.624.8560, or email us at generalinfo@pgacu.org to open your HSA or for more information.
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