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Health Savings Accounts: What is an HSA?
A Health Savings Account (“HSA”) is a combination of a tax favored savings account and a qualified high deductible health insurance policy. The savings account can be used to pay for routine medical, dental, prescription drugs, eye-wear and other IRS qualified medical expenses. Major medical expenses are paid by the insurance policy.
What are the benefits of a Health Savings Account (HSA)?
- The interest or other earnings on the assets in your HSA are tax-free.
- You can invest your HSA as you would any other investment account.
- You pay much lower insurance premiums and can put the difference in your HSA.
- You can claim a tax deduction for contributions you make even if you do not itemize your deductions on Form 1040.
- The contributions remain in your HSA from year to year until you use them.
- You can use your HSA funds for medical expenses at any time without paying taxes on the money. See the list of allowable medical expenses.
- Your HSA funds are available with checks or debit cards.
- HSA funds taken out after age 65 for purposes other than medical expenses are taxed as regular income.
- When you use your HSA funds to pay for doctors in the provider network, you will pay a discounted fee.
- Discount programs are available for prescription drugs.
For additional information on Health Savings Accounts (HSAs), fill out the form below or contact us.
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