If you have a health insurance plan with a high deductible, you may want to set up a Healthcare Savings Account (HSA) to complement it. Not sure if it’s a fit for you? Here’s an overview to help you decide.
1.) What is an HSA?
It’s a bank account designed specifically to be used for qualified medical expenses for the owner of the account, and his/her dependents. You and your employer can both make contributions.
2.) How can an HSA benefit me?
- HSAs offer several tax-related benefits:
- Contributions are tax deductible.
- Contributions are also pre-taxed; your contribution comes out of your paycheck before your taxes, so your healthcare money goes farther.
- The money in your HSA is never taxed as long as it’s used for qualified medical expenses.
- HSA contributions keep building. They roll over every year, and you can use the funds you’ve saved whenever you need to, for as long as you live.
- Upon your death, your HSA funds are provided to your selected beneficiary.
3.) How do I use the money in an HSA?
The account works like a standard checking account, so you can use your Horizon Bank HSA funds using a debit card, or checks. You can also check balances online and at ATMs.
4.) What kinds of expenses can I use an HSA for?
- Medical expenses like doctor visits, prescriptions, transportation to get medical care, and dental care
- Long-term care insurance
- Healthcare coverage when unemployed
- Certain continuation-of-benefit healthcare coverage
- Certain health insurance after age 65
5.) How much can I contribute?
In 2020 — Self-only: $3,500 Family $7,100
In 2021 — Self-only: $3,600 Family $7,200
In 2022 — Self-only: $3,650 Family $7,300
Want to learn more? Contact us today for additional details about eligibility, contribution limits, and more!