Health Savings Accounts (HSA) are great tools for those with a qualified High-Deductible Health Plan to manage eligible medical expenses, tax free. Most HSAs conveniently issue a debit card, allowing you to pay for qualified prescription medications and other expenses right away. It’s that simple.
Contributions to your HSA can be made through a pretax payroll deduction or through deposits into your account, which can be claimed as tax deductions when you do your income taxes.
Unlike a flexible spending account (FSA), the balance of your HSA is continually carried over year after year. Unused money is not forfeited at the end of the year and will continue to grow tax-deferred.
When you turn age 65, you have the opportunity to withdraw your HSA funds for non-medical expenses without penalty. However, if the money was pre-tax, you will have to pay taxes on the withdrawn amounts for non-medical expenses. HSA owners over the age of 55 can make additional limited contributions (up to $1,000) to their accounts, over the annual limit (for 2019, the annual limit for single is $3,550 and for family it is $7,100).
Are you looking to set up an HSA for you and your family? Contact your ARC representative today to learn more about these accounts and find out what options are available to you!