A Health Savings Account (HSA) is a tax-favored account used in conjunction with a qualifying health plan as defined by the IRS. These HSA-Compatible plans often have lower premiums, offer preventive care benefits and provide coverage for other healthcare services once your deductible is met. HSA dollars can be used to pay for qualified medical expenses applied to the deductible and for other HSA allowable expenses which may not be covered by the health plan.
HSA COMPATIBLE HEALTH PLANS
HSA plans often cover preventive care at 100% without applying toward your deductible. The premiums may be substantially lower than other healthcare plans. They can provide you with increased control over the services you receive and the dollars spent, which can help control premium and healthcare costs. These are defined by the IRS as qualifying High Deductible Health Plans (HDHP).
HEALTH SAVINGS ACCOUNT
HSA contributions are tax-free or tax-deductible. Interest, investment income, and withdrawals are tax-free when used to pay for qualified medical expenses. HSA funds belong to you and your balance carries over from year to year. Contributions can come from employers, account holders or third-parties. After the age of 65, you can use the funds for any non-qualifying expense without penalities, paying only the income tax due on the withdrawal amount. Funds collected in your HSA account in excess of your deductible can be rolled over to a like fund for even greater earning potential.
Individuals and/or their spouses, over the age of 55 and not enrolled in Medicare can make catch-up contributions up to $1,000 Annually.
Consult with you tax advisor for more details.
CAN I TRANSFER FUNDS FROM AN IRA TO MY HSA?
Yes, regulations allow a one-time rollover from an IRA to an HSA, up to the annual HSA contribution maximum. Prior to transferring funds, please consult your tax advisor to discuss the benefits and tax reporting requirements.