A health savings account (HSA) combines high deductible health insurance with a tax-favored savings account. Money in the savings account can help pay the deductible. Once the deductible is met, the insurance starts paying. Money left in the savings account earns interest and can roll over annually.
HSA Benefits
High Deductible Health Plan:
- Costs less than more “traditional” copay plans.
- Provides quality health insurance.
- One calendar-year deductible per family.
HSA Savings:
- Used to meet your deductible.
- Tax deductible off of gross income.
- Grow tax-deferred.
- NEVER taxed when used for qualified medical expenses.
- Rolls over year after year – no “use it or lose it”.
- Portable, goes with you wherever you go.
HSA Savings can also be used for:
- Health insurance premiums when you’re between jobs.
- Qualified long-term care premiums.
- Medicare premiums and out-of-pocket expenses.
- Living expenses after age 65 (pay ordinary income taxes).
| 2020 Limits | Minimum Deductible | Maximum Out-of-Pocket | Contribution Limit | 55+ Contribution Catch Up |
|---|---|---|---|---|
| Single | $1,350 | $6,750 | $3,550 | $1,000 |
| Family | $2,700 | $13,500 | $7,100 | $1,000 |
Health Savings Accounts (HSA) are subject to limitations and/or penalties imposed by the Internal Revenue Service. Please see your HSA Agreement or tax advisor for additional information.